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The tax burden on the people is going to increase further in the upcoming fiscal year 2024-25 budget. The government will make a big effort to collect tax in the next budget as it could not collect the expected tax in the current financial year. In that case, more people may be brought under the tax net, according to the National Board of Revenue (NBR).
Finance Minister Abul Hassan Mahmood Ali will present the budget for the fiscal year 2024-25 in the National Parliament on June 6. Now the budget preparation work is going on in full swing. In this budget, the NBR is planning to collect additional revenue of at least Tk 36,000 crore from income tax alone.
Several senior officials of the NBR told The Daily Messenger that the government’s revenue collection from the customs sector has shrunk due to the drop in imports caused by the dollar crisis. In this situation, the NBR is planning to increase revenue from the income tax sector, which will be reflected in the budget of the next financial year.
The revenue target in the current fiscal year’s main budget was Tk 4,30,000 crore. It was later reduced to Tk 4,10,000 crore. The revenue collection target may be increased to Tk 4,76,500 crore in the upcoming budget. Out of this, NBR wants to collect an additional Tk 36,000 crore from income tax.
According to NBR sources, 5 per cent more tax may be imposed on the rich in the upcoming budget. That is, the rich people who have been paying the maximum tax rate of 25 per cent may be taxed at the rate of 30 per cent in the new financial year. That level of taxation was in the pre-Covid situation. The tax department wants to reinstate this rate again. If this is done, the tax department will be able to collect at least Tk 10,000 crore more.
Besides, it has been planned to identify 11 sectors, including tax at source, and collect an additional tax of Tk 26,000 crore from them. Out of these 11 sectors, the government is thinking of collecting Tk 22,690 crore from tax at source alone. The NBR is thinking about reducing tax exemption by Tk 1,000 crore and reducing tax evasion by Tk 500 crore and collecting Tk 200 crore more from new taxpayers at the growth centre level.
Apart from this, a roadmap is being prepared to collect Tk 250 crore by adding technology within NBR, Tk 250 crore by adding technology jointly with organisations outside NBR, Tk 200 crore by verifying income tax returns, Tk 200 crore from online filing of corporate returns, Tk 500 crore by increasing field level surveillance, more than Tk 100 crore by increasing the monitoring of taxpayer files in the office, and Tk 300 crore by increasing the scope of taxpayer services.
In this regard, former member of NBR’s income tax policy Syed Aminul Karim told The Daily Messenger, “Taking 5 per cent more tax from the rich would be good for the revenue. However, a little more thought needs to be given to roll out tax breaks. Because, as a result, there may be a negative impact on production, investment and employment. And the initiative to increase vigilance to reduce evasion in collecting more revenue from tax at source is also good.”
Meanwhile, the tax-free income limit of individuals is not being increased in the budget for the fiscal year 2024-25 despite the rise in inflation. However, the provision of income tax return assessment is being abolished to reduce taxpayers’ harassment. That is why the NBR is going to bring major changes in income tax law in the budget.
At present, a major portion of income tax is collected from corporate tax. NBR seeks to raise revenue from individual taxpayers. It feels that if the tax-free income limit is increased, a large number of people will be excluded from income tax. Inflation has increased, along with the proportional increase in people’s income. Therefore, the NBR does not think it is logical to increase the tax limit.
In this regard, Dr Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), told The Daily Messenger, “People’s wages are not increasing in parallel with high inflation. As a result, the standard of living of many may fall below the poverty line. This is a big problem.”
“On the other hand, due to the slowdown in the growth trend, the tax concessions that were available in many cases may be withdrawn in the next budget. Also, in many cases, the incentives that many were getting will have to be lifted due to the IMF conditions, which will cause more suffering for the people,” he added.
Messenger/Fameema
