Bangladesh Planning Minister MA Mannan has indicated that the tax-free income limit may increase slightly in the upcoming budget. However, he did not say anything specific about how much it increases.
Low- and middle-income taxpayers are suffering due to the massive increase in the cost of living.
In such a situation, various business organizations and economists have suggested increasing the tax-free life limit in the upcoming budget. Currently in Bangladesh no tax is payable on income up to three lakh taka. Many are demanding that it be done up to five lakh rupees.
On Thursday, Planning Minister MA Mannan admitted in a BBC program that the tax-free life span needs to be increased in the current situation. But he did not say anything about how much it should be.
“A gap has been created due to inflation. Even if the amount is increased to three lakh rupees for compensation, people will get a space. His income will save a little. As far as I know, the government is thinking about it.”
The issue of increasing the tax-free life expectancy will be seen in the upcoming budget?
To such a question, the Planning Minister said, “I can hope, you can hope, that it will be taken to a reasonable level.”
How about neighboring countries?
Tax-free life spans vary between neighboring countries. It is Rs 3 lakh in India, Rs 6 lakh in Pakistan, Rs 12 lakh in Sri Lanka and Rs 4 lakh in Nepal.
Among these, various changes are made in the tax rates from time to time taking into account the cost of living and inflation in India.
In Bangladesh, the tax-free income limit has changed only once after 2015. In 2020, it was increased from 2.5 lakh to 3 lakh taka. It has not been increased since last three years.
Are jobbers easy targets?
According to Bangladesh Revenue Department NBR, there are about 87 lakh Tax Identification Number or TIN number in Bangladesh. In the last financial year, the return has been deposited around 32 lakhs.
But NBR does not have any precise calculation of the number of employees or the amount of tax collected from them annually.
However, it is true that if the tax collection from individual taxpayers decreases, it will affect the tax revenue. As a result, the government is keen to increase the scope of income tax.
But are the jobbers becoming an easy target?
Dhaka University economics professor Saima Haque Vidisha thinks so. saying
“Low or middle income taxpayers they generally don’t evade. In the case of Board of Revenue it can be said that the employees are a safe place from where some tax will come,” said Professor Vidisha.
He said, many businessmen or organizations have huge income. But whether the tax they are paying is commensurate with that, it has to be seen. It should be seen who is staying out of income tax.
On Thursday night, the Planning Minister also admitted on the BBC program that taxes can be easily collected from the employees.
“Employees are visible, listed, listed. So say attack or raise your hands – it’s easy,” said the Planning Minister.
Why the government failed to bring the big businessmen under the tax? To such a question, the Planning Minister claimed that the government has not failed, but there are some problems.
“Those you talked about, they are not listed. They are hidden from sight. They have the capacity to spread their income in various ways and use loopholes in the law to reduce taxes and pain.”
He said, there are some aspects of law that can be taken advantage of if used strategically. He mentioned that the law needs to be reformed to stop this issue.
Anger over taxes
Inflation is on the rise in Bangladesh. The private research organization Center for Policy Dialogue (CPD) said in a survey last year that a four-member family in Dhaka spends more than 22,000 taka on food alone, including fish and meat.
In such a situation, the organization said to reduce the tax rate on the employees and bring relief to their lives.
As the tax-free life limit is only Tk 3 lakh, a person will come under the tax only if he earns more than Tk 25 thousand per month.
But as the cost of living in Bangladesh has increased, Tk 25,000 is not enough to cover the expenses of a family. So the question arises who will earn more than 25 thousand rupees, how will they pay income tax?
In this case, low and middle income people are suffering more. Shafaetul Islam, a private employee of Dhaka, is one of them.
After deducting various office fees, at the end of the month, the salary is about 65 thousand taka. Mr. According to Islam, all of this is spent at the end of the month.
His house rent including gas, electricity, water, internet and dish bills is Tk 25,000, food is Tk 22,000, two children’s education is Tk 8,000.
With the remaining 10,000 taka, he has to pay for travel, medical expenses and other household expenses. Sometimes it is possible, sometimes you fall into a financial crisis.
But in the meantime, at the end of the year, he has to pay taxes of about 43 thousand taka. Although he got some rebate, he is angry about the amount of this tax. of Islam
“Due to the state of my monthly expenses, I have nothing left at the end of the month. When I have to pay the extra money at the end of the year, it becomes a burden for me.”
Shafaytul Islam says that the salary has not increased at the rate at which the expenditure is increasing now.
“The tax-free age limit of three lakhs or the steps after that, if the tax rate is lower, my tax might be a little less. Which would have been a little less burden for me, maybe I could have run the family a little more easily.”
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