Filing tax returns: Govt eyeing to impose tax on individuals from FY24
Staff Reporter :
The government is aiming to incorporate a new rule of minimum tax on individuals who will file tax returns even if they do not have taxable income.
As the per plan, people will have to deposit Tk 2,000 as tax to the state exchequer even if he or she claims an income that is below the threshold from the next financial year of 2023-2024.
Officials at the Finance Ministry said that individuals whose income will be lower than the threshold and who will require filing tax returns as per rules are likely to be required to pay the new deposit on their incomes.
Officials also said there is a possibility that the minimum tax could be gradually imposed on all TIN holders.
The idea behind the plan is to expand the tax base. In many countries such as the US, there is a practice of a token tax, said a senior official seeking anonymity.
But the analysts said that such a move would burden low-income people and contradict the concept of tax-free income thresholds and progressive taxation.
There are around 86 lakh individual TIN holders in the country, but only 32 lakh of them submit tax returns. Among the individuals who submit tax returns, approximately eight lakh do not have taxable income.
If these eight lakh individuals are made to pay the minimum tax of Tk 2,000 the
government will generate an additional revenue of Tk160 crore.
The ceiling of the zero-tax rate for personal income may be increased to Tk3.5 lakh in the next fiscal year, beginning in July, from the current Tk3 lakh, officials at the Finance Ministry said.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, opposed the government’s move to impose minimum tax as low-income people will be in trouble.
“If there is no taxable income, there will be no tax and there is nothing wrong in it,” he added.
Registered taxpayers currently have to file their income, expenditure, and wealth statements and get proof of submission of returns to avail of nearly 40 types of services.
