Staff Reporter :
The government proposed to set the corporate tax rate for listed companies at 22.5 per cent in the upcoming FY2024-25 and FY2025-26, up from the existing 20 per cent, with the aim to reduce the tax barrier between listed and non-listed companies to 5 per cent from 7.5 per cent.
Finance Minister Abul Hassan Mahmood Ali proposed the corporate while placing the Tk 7,97,000 crore proposed budget for FY25 in parliament on Thursday afternoon.
“Currently many sector-wise company tax rates are effective. I propose to conditionally make the tax rate from 27.5 per cent to 25 per cent for companies that are not publicly traded as defined in the Income Tax Act, 2023,” he said.
“In this case, all types of income and receipts and all types of expenses and investments above 5 lakh Taka in each single transaction and above 36 lakh Taka in total annually must be done through bank transfer.”
“In order to further formalize the economy and encourage the establishment of one-person companies, I propose to make the one person company tax rate from 22.5 per cent to 20 per cent, subject to compliance with the same conditions as non-listed companies,” he said.
“It is proposed to conditionally make the tax rate from 22.5 per cent to 20 per cent for listed companies if shares exceeding a certain amount of paid-up capital are transferred through IPO (Initial Public Offering).”
“Currently, as part of the effort to achieve the country’s tax-GDP rate growth target every year, I propose to increase the tax rate for cooperative societies from 15 per cent to 20 per cent keeping other tax rates fixed as per last financial year,” he included.
“However, the reduced barrier among listed and non-listed companies could have a negative impact on the country’s capital market and reduce willingness to be listed companies and ensure compliance, say sector insiders, adding that the government should raise the tax barrier to collect more revenue.