The government is likely to introduce land taxation on per katha basis, replacing the current system of taxation on the sales rate to prevent undervaluation of prices during registration as a means to evade taxes.
It is estimated that the National Board of Revenue has been losing a huge amount of revenue due land undervaluation by the realtors.
Earlier in a meeting, NBR Chairman Md Ghulam Hussain blasted the realtors for undervaluing land prices during registration.
He said: “If a person buys one katha land in Banani or Gulshan, he/she has to pay Tk10 crore. However, during registration, the price is shown as Tk52 lakh, so the NBR gets only Tk5.2 lakh as tax when it is supposed to get Tk1crore.”
NBR officials said the changes in the system would help ensuring revenue collection as the gap between the government set price and actual price of transaction would be reduced with the new provision.
The NBR also found that land property in the country is sold at prices higher than what the government has set, but the buyers show a smaller number than the actual price during the transfer of ownership as the government price is very low.
With the current law, sellers have to pay 2% gain tax or advance income tax while transferring land property in city corporation area, cantonment board and municipality areas, while the rate is 1% for the land outside the jurisdiction of the city corporations and municipalities.
2% tax rebate for RMG sector
In the budget for FY 2014-15, the ready-made garment sector is to enjoy 2% tax rebate on cash incentives provided for the betterment of the apparel industry.
Currently, the RMG sector enjoys 3% cash incentives for exploring new markets, and the entrepreneurs have to pay 5% tax on incentives.
The sector also enjoys 5% cash incentives on import of cotton and 2.5% on export value of RMG products.
Abdus Salam Murshedy, former president of BGMEA, told the Dhaka Tribune: “The tax reduction will help the sector to boost export and explore more markets for the apparel products.”
It would also help the sector to increase competitiveness in the global market, he added.
Minimum tax for taxpayers outside the capital to be doubled
The minimum tax for the individual taxpayers in the city corporation and municipality areas outside Dhaka city is likely to be doubled for FY 2014-15.
Finance Minister AMA Muhith is likely to propose Tk6,000 as tax for the individuals living in the city corporation areas from the existing Tk3,000, while Tk4,000 is likely to be finalised for people living in the district towns from the existing Tk2,000, and Tk2,000 for people living in the villages from the existing Tk1,000.