The government is likely to increase the thresholds of tax-free income for individual taxpayers, women, aged people, physically challenged and wounded freedom fighters in the upcoming fiscal year, official sources said.
Individual tax-free income threshold may be raised to Tk2.5 lakh from existing Tk2.2 lakh.
For women and aged people (65 years and above), the limit will be increased to Tk3 lakh from Tk2.7 lakh. For the physically-challenged, it will be Tk3.75 lakh instead of Tk3.5 lakh. For wounded freedom fighters, the threshold proposed will be Tk4.25 lakh instead of Tk4 lakh.
The upcoming budget may extend tax holiday benefits for some industries and propose 5-year tax exemption for handicraft exporters.
Tax holiday for IT-enabled services like software making and e-commerce will be extended.
Investors will get 10-year tax holiday and developers 12-year as incentive if they invest in the economic zones. They might also get some customs and VAT-related policy benefits.
Corporate tax for non-listed companies may remain unchanged at 35%. But tax may be imposed on public servants’ allowances as they may get a 100% salary hike this year.
Finance Minister AMA Muhith has finalised these fiscal measures following directives from Prime Minister Shiekh Hasina, a Finance Division official said.
Sources said corporate tax for listed companies may come down to 25% from 27.5%. Banks, insurers and non-banking financial institutions will have to pay 40% instead of 42.5%.
The finance minister will also tell about introducing a new VAT law and announce bringing most of the earning people under the tax net. There may be also proposals for hiking minimum tax for individual taxpayers in the city corporations and municipalities.
Tax to increase to Tk4,000 from Tk3,000 in the city corporation areas; for municipalities, it would be Tk3,000 rather than Tk2,000.
In other areas across the country the tax would be raised to Tk2,000 from the existing Tk1,000.