The corporate tax rates on listed and non-listed and one-person companies will be reduced from the next fiscal year 2022-23.
According to the proposed budget, corporate tax rate has been reduced to 20 percent from 22.5 percent for listed companies, 27.5 percent from 30 percent for non-listed companies and 22.5 percent from 25 percent for one-person companies (OPCs).
Finance Minister AHM Mustafa Kamal made the remarks while placing the budget at the parliament in the capital on Thursday.
“In order to facilitating massive expansion of trade and commerce, the corporate tax rate has been reduced from 32.5 percent to 30 percent through Finance Act 2021,” the Minister said, adding, “In FY 2022-2023, I would like to propose a further reduction of the existing corporate tax rates. In this case, all receipts and income must be transacted through bank transfer and all expense and investment over Tk 12 lakh must be made through bank transfer.”
He proposed to reduce the tax rate for non-listed companies from 30 percent to 27.5 percent. It was also proposed to reduce the tax rate for OPCs from 25 percent to 22.5 percent to facilitate formalization of the economy and to encourage formation of One Person Companies.
For the sake of development of the stock market and attracting investments, the finance minister proposed a tax rate of 20 percent in place of existing 22.5 percent for listed companies that issue shares worth over 10 percent of its paid-up capital through Initial Public Offering (IPO).
Kamal, however, proposed the tax rate to be 22.5 percent for a listed company that issues share worth 10 percent or less than 10 percent of its paid-up capital through IPO.
But in this case, the tax rate would be 25 percent instead of 22.5 percent if the company fails to comply with the conditions mentioned earlier, he added.
Rationalizing the corporate tax rates cut, Kamal said that the desired target for private investment to GDP ratio can be achieved by reducing corporate tax rate.
With a view to facilitating rapid expansion of trade and commerce, he said the corporate tax rate was earlier reduced from 32.5 percent to 30 percent through Finance Act 2021.
