The government is likely to make some changes to the proposed finance bill 2014, including increasing the tax-free income limit for individual taxpayers, and allowing the continuation of the opportunity to whiten undisclosed money.
The changes would be made before the bill’s passage in the parliament on June 28, a day before the usual schedule, sources said.
Amendments would also be made in other provisions including introducing a hike in tax exemption from dividend income, excluding cost and management accountants from conducting audits, and exempting tax for family saving certificates of up to Tk5 lakh, the sources added.
Prime Minister Sheikh Hasina will place her demands regarding the changes to Finance Minister AMA Muhith before the bill is amended and passed in the parliament between 4pm and 8pm on June 28. The budget for the FY2014-15 will be passed in the parliament on the following day.
Despite huge criticism from different sectors, the government is set to allow legalisation of undisclosed money in different productive and income generating sectors, as well as for the purchase of land and residential apartments for the fiscal year 2014-15, through paying 10% penalty in addition to the regular 25% tax, officials of the Finance Ministry have said.
Although previous occasions Muhith had categorically ruled out the possibility of keeping the money whitening facility in the next fiscal year, he was forced to bow down to pressure from influential black money holders, the officials added.
However, investments on treasury bonds will not be allowed.
The tax on interest from investment on family saving certificates, commonly known as Poribar Sanchayapatra, will be exempted up to Tk5 lakh; along with previous proposals of exempting tax on interest from investment on pensioner saving certificate and wage earners bond up to Tk5 lakh.
Under the current income tax provisions, taxpayers have to pay 5% tax at source on their saving instruments.
The tax exemption limit on dividend income from share market will be set at up to Tk20,000 from the proposed Tk15,000, an NBR senior official has said.
Currently, investors can get tax exemption on dividend income of up to Tk10,000; and if the amount exceeds, they have to pay 10% tax on the higher incomes.
Meanwhile, cost and management accountants (CMAs) will not be allowed to conduct audit and certify financial reports, which the finance minister had proposed in the bill on June 5.
Currently, only chartered accountants are be allowed to conduct audit.
The government has primarily finalised the tax-free ceiling for individual taxpayers at Tk2.30 lakh; a Tk10,000 rise compared to Tk2.20 lakh proposed by Muhith on June 5 in his budget speech.
The business chambers had been urging the government to increase the tax-free ceiling considering the inflation rate and living cost of marginal taxpayers.
The instructions were reportedly handed out by Muhith at a meeting with NBR officials on Sunday, before the minister left for Jeddah.
Regarding the payment of house rent through banking channels, NBR officials said the prime minister would appreciate the government’s plan and request the finance minister to incorporate the issue with the finance bill.
They said following the premier’s consent, Muhith would further describe the methods of payment of house rent through banking channel and the reasons behind the government’s move to bring changes in income tax rules for realising tax on house rent for preventing tax evasion.
Officials said the government is likely to make a provision for 50% fines in the income tax ordinance if house owners were found guilty of not receiving the house payment of over Tk25,000 through cheque.
Several lawmakers, particularly from the northern region, have reportedly sided with bidi manufacturers to pressure the finance minister to reduce tax on bidi.
In the last five years, no reform or change was made in the tax structure of handmade bidi considering the interests of local bidi manufacturers.
The current prices of 25 sticks non-filter and 20 sticks filter bidis are Tk5.354 and Tk6.052 respectively.
With a view to discourage smoking, the finance minister proposed fixing the price of 25 sticks non-filter bidis at Tk6.14 and 20 sticks filter bidis at Tk6.94.
