FE Report

The government has proposed to keep individual tax exemption ceiling, corporate tax rates for banks and financial institutions unchanged for the fiscal 2009-10 to achieve the ambitious target of Tk 610 billion revenue for the upcoming financial year.

Finance minister has proposed to set a revenue collection target at Tk 610 billion. Of the target, income tax collection target set to Tk 165 billion, while Tk 104 billion as customs duty and 227 billion for Value Added Tax (VAT).

He has proposed to lower the age bar from 70 years to 65 years to help reduce the personal income tax burden on senior citizens of the country.

Tax exemption ceiling for individual taxpayers will remain same at Tk 165,000 while tax threshold for women will be unchanged to Tk 18,000.

However, the government has proposed to reduce the corporate tax rate for mobile phone operators to 35 per cent, from the existing 45 per cent, imposing a condition to be listed in the stock exchange as a publicly traded company.

The cell phone operating companies will have to transfer 10 per cent share of their paid up capital, but pre-initial public offering placement cannot exceed over 5 per cent, Finance Minister AMA Muhith said in his budget speech Thursday.

Finance minister also proposed to adopt certain measures to broaden the tax base and tax net and bring discipline in the management of the Taxpayer Identification Number (TIN).

He also proposed to reduce land registration tax to 2.0 per cent from 5.0 per cent.

For other areas where the price of non-agricultural land exceeds Tk. 0.1 million, the tax rate will be slashed to 1.0 per cent from the existing 5.0 per cent.

He also proposed to offer tax exemption to the income generated from pensioners savings certificates.

Finance minister has proposed to introduce online facilities for tax return submission.

He also proposed to increase the existing manpower and strengthen the infrastructure of income tax department.

"I propose to increase manpower and expand organisational structure by increasing Member positions, territorial zones and appeal zones of income tax department and establishing the Tax Information, Management and Research Centre," the finance minister said.

Finance minister has proposed to impose taxes on vehicle at a specific rate on the basis of their engine capacity (CC).

"Generally, the affluent section of the society owns vehicles for their personal use. Despite using vehicles, many do not pay taxes," he said.

He also proposed to consider the deduction of taxes at source against certain exports as their final liability to cushion off the effect of global economic recession.

Other tax related proposals include the formation of a National Tax Tribunal to dispose of cases related to income tax, VAT and customs, widening the tax base in upazila level by introducing a country-wide survey.

"I propose to conduct surveys in Uttara, Nikunja, Bonosri, Basundhara-Baridhara Project Area, Savar, Dohar, Nawabganj, Keraniganj of Dhaka district, Louhojong of Munshiganj district, Patia, Sitakunda, Satkania, Hathajari, Mirershawrai of Chittagong district and Bianibazar of Sylhet district," the finance minister said.

He also proposed to continue this survey in other important business centres and places of the country in phases.