ICMAB for raising income tax waiver limit to Tk 0.3m
05 May 2016, Nirapad News: The ICMAB placed on Wednesday a number of proposals including raising income tax exemption threshold to Tk 3,00,000 (0.3 million) and imposing higher rate of taxes on non-listed foreign banks in the upcoming budget for fiscal year (FY) 2016-2017.
They also proposed to bring several amendments to the Income Tax Ordinance (ITO), 1984.
The Institute of Cost and Management Accountants of Bangladesh (ICMAB) came up with the proposals at a pre-budget meeting with the National Board of Revenue (NBR) at the NBR conference room.
The ICMAB proposed tax exemption limit for individual taxpayers at Tk 3,00,000 from existing Tk 2,50,000 considering the significant rise in the national pay-scale.
The institute recommended imposing 45 per cent income tax on non-listed foreign banks instead of existing 42.50 per cent which will encourage them to get incorporated in Bangladesh and listed on the country’s stock exchanges.
Mentioning that the e-TIN is mandatory for registration of land, building or apartment worth Tk 1,00,000, ICMAB Director Lt. Col (retired) Md Humayun Kabir said the limit should be increased to Tk 5,00,000 because it is quite hard to buy one decimal of land with Tk 1,00,000 even in rural Bangladesh.
Creating an E-TIN certificate only for registration purpose of a tiny piece of land will be a burden for the marginal section of the society as they might not have taxable income in their entire life, he added.
The ICMAB also proposed to add the designations ‘chief executive officer’ and ‘chief financial officer’ under ‘principal officer’ category defined in Section 2(48) of Income Tax Ordinance (ITO), 1984 as these designations are quite common in most of the companies.
The cost and management accountants proposed to impose Tax Deducted at Source (TDS) of 3.0 per cent on internet service and courier service by inserting these two items in ‘transport provider’ in section 52AA of income tax law.
The ICMAB suggested keeping VAT rate within 5.0 per cent to 10 per cent to release the taxpayers from tax burden while 15 per cent rate is proposed in the new VAT law.
Meanwhile, the Institute of Chartered Accountants of Bangladesh (ICAB) proposed to include survey firms, beauty parlours, organisations that arrange programs with foreign entertainers, chartered plane and helicopter renting organisations, satellite cable operators and distributors, picnic and shooting spots, and internet service providers in section 52AA of income tax law by introducing new SI No to impose TDS.
The ICAB recommended to the NBR to give additional six months to the taxpayers for preparation before finalising VAT policies as there are some basic differences between existing VAT law and the upcoming one. NBR member (tax policy) Parvez Iqbal presided over the pre-budget meeting.