The government has decided to change the tax-free threshold of income, tax rates and tax slabs for taxpayers other than companies and local authorities, especially individual taxpayers.
Finance Minister AHM Mustafa Kamal on Thursday proposed the changes as a gift of the 'Mujib Borsho' while placing the proposed budget for 2020-21 fiscal.
He proposed to increase the tax-free income threshold of male taxpayers from Tk 250,000 to Tk 300,000 and the tax-free income threshold of female taxpayers and taxpayers above 65 years of age from Tk 300,000 to Tk 350,000 respectively.
"The unchanged status of the tax-exempted income threshold on the one hand, and the loss of real income due to inflation on the other have created a feeling of discomfort among the genuine and valued taxpayers with regard to payment of taxes. Also, our valued taxpayers have been financially affected due to the global outbreak of the COVID-19 pandemic," he said.
He hoped that this reduction of tax burden will add some comfort to the lives of the individual taxpayers, and will also make them feel encouraged to pay taxes regularly.
He also proposed to reduce the minimum tax rate for individuals from 10 percent to 5 percent, and the maximum tax rate for individuals from 30 percent to 25 percent.
The Finance Minister said that the government has given highest priority to the digital transformation of the Income Tax Department.
He hoped that everyone will be able to materialise this digital transformation in the quickest possible time, and as a result, taxpayers will be able to pay taxes as well as file income tax returns online with utmost ease and comfort.
"To popularise the option of online payment of taxes and online submission of tax return among the taxpayers, I propose a tax rebate of Tk 2,000 to all the taxpayers who will file their income tax returns online for the first time."
The Minister said that the efficient administering of state affairs by the government during the last 12 years has resulted in achieving significant progress in different socio-economic indicators, as well as enhancing the per capita income.
"This has rendered many citizens of the country eligible of paying taxes. Due to lax in the existing provisions of the law, around 50 percent of the TIN (Taxpayer Identification Number) holders can now easily afford not to submit tax returns. Taking undue advantage of the situation, many eligible taxpayers are now avoiding submission of tax return and evading payment of taxes."
He proposed to amend the Income Tax Ordinance to make submission of tax return mandatory for all TIN holders.
"When it comes into force, this provision will potentially seal the scope of tax evasion, and significantly increase the number of return filers," he said.
He also mentioned that simplification of the tax return form is also necessary to smoothen the process of tax payment and tax return filing for taxpayers.
In addition to the existing return forms, he, therefore, proposed to introduce a new one-page-return-form to facilitate return submission by the marginal taxpayers.
"I hope the taxpayers will feel proud to be partners in the development of the country by paying taxes and easily submitting tax return using the proposed simplified return form," he said.