The government is likely to increase the tax-free income limit for individuals from the existing amount of Tk 300,000.
Businessmen, economists and research organisations suggested the government increase the tax-free income limit to give some respite in times of high inflation.
National Board of Revenue (NBR) sources said that more attention will be given to increasing revenue and tax coverage in the next fiscal budget.
Increasing the tax-free income limit will reduce the revenue slightly, but the revenue board is considering taking steps to meet the shortfall from other sectors, they added.
However, the tax-free income ceiling for individual taxpayers, which was Tk 1,65,000 in FY 2009-2010, has been increased from time to time to bring it to the tune of Tk 3,00,000 in FY 2020-2021. This ceiling is kept unchanged in the following FY 2022-23.
The stakeholders made a demand to increase the tax-free income limit as inflation increased due to price hikes of commodities and a decrease in people’s income due to the Covid situation.
The Centre for Policy Dialogue (CPD) said that apart from fish and meat, a family of four in the capital spends Tk 22,664 per month on food.
The tax burden on income of Tk 25,000 is very heavy for them. In that case, the tax-free income limit should be increased to Tk 3,50,000 in the next budget.
Apart from this, several organizations, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) have demanded that the tax-free life limit of individual taxpayers be increased to Tk 4 lakh in the next budget.
In the current fiscal year, the tax-free income limit is Tk 3,00,000. There is five percent tax on income above Tk 3 lakh to Tk 10 lakh.
Income from more than Tk 10 lakh to Tk 30 lakh is 10 percent, income up to Tk 40 lakh is 15 percent, income of Tk 50 lakh is 20 percent and income more than Tk 50 lakh 25 percent.
In the current fiscal year, the tax-free income limit is three lakh taka.
Tax free income limit for women and senior citizens is Tk 3 lakh. In case of disabled and war wounded freedom fighters, this income limit is Tk 4.5 lakh and Tk 4.75 lakh respectively.
CPD's Research Director Khandaker Golam Moazzem said, “Since Covid-19, this tax-free income limit has been proposed to be extended. It is certainly good if the tax free income limit is extended. There is a need for it.”
He said, “The government needs revenue. In that case, it will be positive if it can be increased gradually rather than bringing a large amount at once. If this is done, the disposable income in the hands of people will increase a little.”
However, the government is going to set about 7.50 percent gross domestic product (GDP) growth target for the upcoming fiscal year 2023-24 (FY24), a Finance Ministry official said.
Finance Minister AHM Mustafa Kamal is set to place in parliament the national budget amounting to about Tk 7,61,991 crore for fiscal year (2023-24) on June 1.
On the other hand, the government is to set a target to collect Tk 5,00,000 crore as revenue in the upcoming budget for 2023-24 fiscal year. Of the revenue collection target, the National Board of Revenue (NBR) will collect Tk 4,33,000 crore, up 16.20 percent or about Tk 63,000 crore over the previous fiscal amounting to Tk 3,70,000 crore and another Tk 67,000 crore will be collected from other sources, they mentioned.
The budget deficit is Tk 2,61,991 crore. The government has set a Tk 263,000 crore Annual Development Programme (ADP) for the next fiscal year (FY24) making the highest allocation of Tk 75,945 crore (28.88pc of allocation) in the transport and communication sector.
