Aiming to reduce the burden on people with disabilities, Finance Minister AMA Muhith has proposed to set a tax-free income ceiling for such individual taxpayers at Tk4 lakh instead of the current Tk3.75 lakh.
In addition, parents or legal guardians of people with disabilities would enjoy tax exemptions of Tk25,000 higher than the regular tax exemption threshold.
All the other tax criteria for individual taxpayers – general taxpayers, women and the elderly, and freedom fighters injured that were wounded in war– are to remain unchanged.
“In Bangladesh, the tax exemption threshold is more than 200% of the per capita GDP. In most developing countries, the ratio is about 100%. Besides, our inflation rate is low at this moment, with point to point inflation measuring at around 5% only. Therefore, I propose that the tax exemption threshold will remain unchanged for the next fiscal year... ,” said Finance Minister AMA Muhith while announcing the budget for fiscal year 2017-18.
Currently, the tax free exemption limit is at Tk2.5lakh for individual taxpayers, Tk3lakh for women and the elderly (those over 65 years), and Tk4.25 lakh for gazetted wounded freedom fighters.
The income tax slabs for the upcoming fiscal year will also remain unchanged at 10% for income above Tk4 lakh, 15% for the next Tk5 lakh, 20% for the next Tk6 lakh, 25% for the next Tk30 lakh and 30% for anything above Tk47.5lakh.
Minimum tax rate remains unchanged
The government has also kept the amount of the minimum payable tax rate unchanged for the upcoming fiscal year 2017-18.
At present, Tk5,000 is the minimum income tax for those living in Dhaka North City Corporation, Dhaka South City Corporation, and Chittagong City Corporation.
Taxpayers from other city corporation areas are to pay Tk4,000 while the rate is Tk3,000 for those residing outside city corporation areas.