The government is considering abolishing the existing surcharge system in the upcoming budget and re-introducing wealth tax.
National Board of Revenue (NBR) chairman Md Abdur Rahman Khan said that this will not only eliminate the existing inconsistencies in the tax system but will also increase revenue collection.
He said this during the pre-budget discussion held at the NBR building on Sunday.
The NBR chairman said that currently, according to the Income Tax Act-2023 and the Finance Ordinance-2025, there are three types of surcharges in force - surcharge on wealth, environmental surcharge and special surcharge. However, in reality, many inconsistencies have been created in this system.
Giving an example, he said that someone can own a property worth Tk300 crore in Gulshan through ancestral lineage.
But if his net assets are below Tk4 crore, he does not have to pay the surcharge. As a result, inequality is being created in the tax system.
To eliminate such inconsistencies, the issue of repealing the surcharge and reintroducing the previous wealth tax is being considered.
He said that the basic principle of the tax system is that those with higher income and wealth should contribute more to society. But in reality, many wealthy individuals are being left out of the tax system.
The NBR chairman also said that there have been various objections to the surcharge for a long time. Especially in the case of capital market investors, sometimes the value of assets is high on paper but in reality, it decreases.
For example, if someone invests Tk10 crore and later it decreases to Tk10 lakh, he has to pay the surcharge as per the previous calculation. As a result, taxpayers are under unreasonable pressure in many cases.
According to the current rules, if a person's net assets are more than Tk4 crore, he has to pay a surcharge on his income tax at a fixed rate. The surcharge rate increases step by step according to the amount of net assets.
If the net assets are more than Tk4 crore but within Tk10 crore, a 10% surcharge is imposed on the income tax. If the value is between Tk10 crore and Tk20 crore, a surcharge of 20% is payable, if it is between Tk20 crore and Tk50 crore, a surcharge of 30% is payable and if it is more than Tk50 crore, a surcharge is applicable even if there is more than one motor vehicle or if there is a residential property with an area of more than 8,000 square feet.
An environmental surcharge is imposed in the case of more than one motor vehicle. This surcharge is payable for every vehicle except the least taxable vehicle. Its rate has been determined based on the engine capacity of the vehicle.
According to the current rules, an environmental surcharge of Tk25,000 is payable for vehicles up to 1500 cc, Tk50,000 up to 2000 cc and Tk75,000 for vehicles from 2000 to 2500 cc.
For vehicles from 2500 to 3000 cc, this rate is Tk1.50 lakh. For vehicles from 3000 to 3500 cc, a surcharge of Tk2 lakh is payable and for vehicles with a capacity of more than 3500 cc, a surcharge of Tk3.50 lakh is fixed.
However, the NBR chairman also said that environmental surcharge will not be imposed on electric vehicles from FY27.
In the case of tobacco product manufacturing companies, a special surcharge of 2.5% is imposed on the income earned from that business. In addition, if an educational institution does not have legal provisions for the accessibility of people with disabilities, a surcharge is also imposed on the income of that institution at the same rate.
