In the wake of intense criticism and public outcry, the government has decided to withdraw the minimum tax provision of Tk 2,000 as proposed in the national budget for 2023-24 fiscal.
Finance Minister AHM Mustafa Kamal endorsed the concerns raised by various sections of society, emphasizing the government’s commitment to consider the opinions of the common people.
During a post-budget press conference on June 1, National Board of Revenue (NBR) Chairman Abu Hena responded to a journalist’s question about the provision of minimum tax.
He said that earlier statement of paying minimum tax is a matter of pride in contributing to national development sparked strong protests from people across different classes and professions, including economists. Taking these concerns into account, the government has decided to withdraw the proposed provision.
The proposed budget for the fiscal year 2023-24 is scheduled to be approved by the National Parliament on June 26. However, prior to its approval, taxes on several items will be withdrawn, and new proposals may be added. The current fiscal year, 2022-23, is set to end on June 30, and the new budget will come into effect from July 1.
The proposed budget initially included a minimum tax requirement of Tk 2,000 for 44 different government services, even for individuals with no taxable income. However, considering the widespread criticism from various quarters, the government has decided to retract this decision.
Among the notable services requiring proof of tax return submission were taking loans exceeding Tk 5 lakh from banks or financial institutions, becoming a director or shareholder of a company, obtaining import-export registration certificates, acquiring trade licenses from city corporations or municipalities, and registering land or flats valued over Tk 10 lakh.
Additionally, the minimum tax provision was to be applicable when applying for credit cards, gas-electricity connections, or enrolling children in English medium schools, among others.
Mustafa Kamal had initially justified the provision as a responsibility of citizens to participate in public service by paying minimum taxes against the benefits received from the government.
However, economists, businessmen, and professionals from various sectors criticized the decision, deeming it illogical under the current circumstances. They argued that the concept of minimum tax did not align with the tax policy, which allows for a tax-free threshold. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the Center for Policy Dialogue (CPD), the Policy Research Institute (PRI), and other professional and social organizations joined the move in supporting the withdrawal of such taxes.
Considering the prevailing context and concerns regarding rising prices and the impact on low-income individuals, the government's highest authorities have decided to remove the provision for minimum taxes. This decision reflects the government's responsiveness to public opinions and its commitment to ensuring a fair and balanced tax policy.
