The government now only taxes the basic pay of government employees but not their allowances.
Finance Minister AMA Muhith presenting his budget proposals for FY 2015-16 in Parliament on Thursday described it as “discriminatory”.
“As a first step to remove such discrimination, I propose similar tax treatment on basic salary, bonus and festival allowances for both government and non-government salaried employees,” said the finance minister.
“It is worth mentioning here that salary of government employees will increase soon”, he added.
A proposal to hike salaries for public servants is currently awaiting the Cabinet’s nod.
It recommended Tk 75,000 as the highest basic pay and Tk 8,250 as the lowest.
Salaries of around 1.3 million government employees will increase between 87 and 101 percent once the proposal is cleared.
