In the proposed budget for the financial year 2019-20, unveiled on Thursday in the Jatiya Sangsad, the tax-free income threshold along with tax rates for individuals remain unchanged like the ongoing fiscal. Besides, the corporate tax rates will also be alike in the upcoming fiscal year as it remains in the current fiscal.
According to the proposed budget, the tax-free income threshold for individuals is Tk 250,000 while the limit is Tk 300,000 for the women and senior citizens having age 65 years and above. However, the tax-free income limit for persons with disability for the FY20 is Tk 400000 while it is Tk 425,000 for Gazetted war-wounded freedom fighters.
The tax rates will also be same in the next fiscal, which are in place in the current fiscal, the budget data shows. According to budget data, the people having an income Tk 250000 will have not to pay any tax. However, the people have an income Tk 400000 next of the tax-free slab, will have to pay 10 percent tax, 15 percent on the next income of Tk 500000, 20 percent on the next Tk 600000, and 25 percent on the next income of Tk 30,00000.
Besides, the people having income more will have to pay tax with a rate of 30 percent. Economists says this move will not give any release of the low-income people, as the government did not increase the tax-free income slab for the next financial year. However, NBR officials says due to having a big revenue collection target, they could not increase the tax-free income threshold.
They also believe that the new budget will not put any extra pressure on taxpayers as the government kept the tax rates same for the next year. The corporate tax rates in the fiscal 2019-20 will also be alike which are in place in the current fiscal 2018-19. The highest corporate tax in the budget has been set for Cigarette and tobacco product manufacturing Company, and non-publicly traded mobile operator company that is 45 percent.
However, publicly traded mobile operator companies will have to pay 40 percent tax on their income. The publicly traded companies will have to pay 25 percent tax on their income while the rate is 35 percent for the non-publicly traded companies. However, the tax rate for the publicly traded bank, insurance, and financial institution and bank, insurance, and financial institutions approved by the government in 2013 is 37.5 percent while the rate is 40 percent on such non-publicly business entities. Besides, the tax rate on the dividend is set 20 percent for the upcoming fiscal, same in the current fiscal.