Muhith keeps general tax-free income threshold unchanged

Finance Minister AMA Muhith has proposed no changes to the income tax in the budget for FY2018.

News Deskbdnews24.com
Published : 1 June 2017, 09:47 AM
Updated : 1 June 2017, 09:47 AM

The income tax exemption threshold for individuals will stay at Tk 250,000, while the ceiling for women and senior citizens will remain unchanged at Tk 300,000.

“There should be a philosophy to determine the tax exemption threshold,” said Muhith in his budget address to parliament on Thursday. “Per capita income and the rate of inflation may be two important determinants in this case.”

As the current tax exemption threshold is more than 200 percent of per capita GDP and the inflation rate is low, there is no need to change the general threshold at this time, Muhith said.

He did, however, propose an increase in the threshold for persons with disabilities from Tk 375,000 to Tk 400,000. The tax exemption threshold for parents and legal guardians of people with disabilities will also be raised by Tk 25,000.

The minimum rate of tax for residents for taxpayers earning above the exemption threshold will also remain unchanged.

Dhaka and Chittagong city corporation residents will pay a minimum of Tk 5,000, residents of other city corporations will pay a minimum of Tk 4,000 and those residing elsewhere will pay a minimum of Tk 3,000 per year.

Muhith also praised the government’s success in ‘changing the culture’ of seeking extensions for filing taxes in Bangladesh.

Muhith called the observation of Nov 30 as National Tax Day a ‘milestone in tax compliance culture’.

The number filing returns and registering for taxes has ‘exceeded expectations’, he said.

“We are on right track in realising the target of collecting at least 50 percent of our total tax revenue from direct taxation by the next decade."