The government is thinking over imposing a higher tax on income from fish farming in the upcoming budget to prevent tax evasion, said an official of the National Board of Revenue.
At present, there is tax-free income up to Tk 1 million through fish farming while the NBR imposes the tax at the rate of 5 percent on the next Tk 1 million and at 10 percent on the amounts above.
NBR is planning to make fish farming less attractive for tax evaders who takes the opportunity to legalise their illegal income through false statements of income from fish farming, said officials.
The government is considering imposition of tax at a rate of 15 percent from FY 2021-22 if the income exceeds Tk 3 million to stop the abusive use of the facility, officials added.
In the new budget proposal, the tax rate is being increased in the third slab, the first two slabs and tax rates may remain unchanged in the upcoming fiscal year.
A section of influential quarters had been evading taxes since 2015, taking the advantage of the reduced rate. Many politicians, lawmakers and others started owning fish farms to exploit the opportunity, NBR said.
Sensing huge tax evasion by showing income from fish farming in the tax returns, the Anti-Corruption Commission (ACC) had earlier requested the taxmen to look into the sector.
The NBR were unlikely to change the tax exemption ceiling or a minimum tax rate of 5 percent, considering the interest of the small fish farmers as the government wants to encourage them, a senior NBR official said.
Last year's budget also imposed some taxes. The coming budget has decided to be stricter in this regard to prevent misuse of tax benefits in fish farming, official also informed.
However, the NBR may introduce a new slab of Tk 1 million after the first Tk 2 million and propose a 10 percent tax on it.
Meanwhile, in the Finance Bill-2021, the government may also offer the tax holiday facility for 10 years on income from new investment in agro-processing, fruit processing, milk and dairy production, and agriculture machinery production.
The tax benefit might be offered on income for the first 10 years of commercial production if the investment made between July 1, 2021, and June 30, 2030.
