After much consideration, the government is planning to bring changes to the proposed budget in order to cater to the needs of middle class citizens, as well as businesses. Prime Minister Sheikh Hasina is likely to explain the changes in the parliament on June 30 when the new budget will be passed.
In the last few years, the PM has brought changes to the proposed budget after deliberation in order to ensure welfare of all individuals and organizations. The increase in tax to be implemented across many sectors drew criticisms from people. After the announcement of the proposed budget, economists have said that the additional taxes are likely to directly hurt the middle class, especially the pensioners, and low-income depositors.
Furthermore, the government decided against making TIN mandatory for the use of electricity as majority of the electricity subscribers is poor. Businesses can also breathe a sigh of relief as the 5 percent Advance Tax (AT) imposed on the import of capital machinery is set to be withdrawn. This will likely take the pressure off companies and consumers.
While the importance of tax revenue
cannot be undermined, the government
must not hurt our growing
economy with the imposition of taxes
The 7 percent Value-added Tax in the proposed budget, imposed on the social media based e-commerce business, might be reduced as well. The 15 percent tax imposed, if retained earnings and reserve of any publicly traded company crosses 50 percent of its paid-up capital, will also be withdrawn.
The widening of the tax bracket will hopefully be enough to cover for the decrease in tax revenue due to the changes made to the proposed budget. Majority of our population who are poor must be taken into consideration when imposing any new form of tax or increasing existing tax.
While the importance of tax revenue cannot be undermined, the government must not hurt our growing economy with the imposition of taxes. The government’s willingness to make the necessary changes to the budget for the sake of the people of Bangladesh is truly commendable.
