Bangladesh Association of Banks (BAB) urged the National Board of Revenue (NBR) to raise their house rent and limit on medical expenses, as well as restructuring the individual tax slabs due to unfavourable market situation, inflation and increasing revenue expenditure.
In a pre-budget discussion with the revenue authority regarding the upcoming FY24 budget on Sunday, they also recommended reducing corporate tax.
As an allowable expenditure, they requested to add 1% as a loan loss provision and also urged adding corporate social responsibility (CSR) money to their business activities.
They handed over their 12-point proposal regarding the corporate and personal income tax segment and four other proposals on the VAT segment, which was signed by BAB chairman and Exim Bank chairman Md Nazrul Islam Majumder.
Regarding house rent, they said: “We propose that the exemption of house rent allowance should be increased to 50% of basic salary or Tk40,000 per month, whichever is lower.”
The proposal also read that medical expenses or medical allowance not exceeding Tk10 lakh received or receivable by an employee being a person with disability shall not be included in his total income.
Medical expenses reimbursed by an employer to an employee who is a shareholder director, for surgery relating to heart, kidney, eye, liver and cancer of the employee, shall not be included in total income of such employee, the proposal added.
Speaking at the meeting on Sunday, BAB member Nizam Chowdhury said that in view of the high inflation the existing ceiling of individual tax-free income of Tk3 lakh needed to be increased to improve disposable income.
He proposed zero tax on an individual's income of Tk5 lakh, 10% on Tk6 lakh, 15% on Tk8 lakh, 20% on Tk10 lakh and 25% on Tk35 lakh and above.
The banks' association proposed a raise in the tax-free income ceiling to Tk5.5 lakh for women and senior citizens.
The exemption limit should be Tk6 lakh for freedom fighters and disabled persons," said the written proposal signed by BAB Chairman Md. Nazrul Islam Mazumder.
On CSR projects, Nizam Chowdhury said banks spend money worth Tk2,000 crore or more under CSR programs which should be considered as allowable expenses.
The banks' association has proposed to revoke excise duty on loan accounts as it thinks the duty is illogical and unethical.
