Govt decides to recede Tk 2000 minimum income tax

Al Amin  :
The government is likely to reduce the 15 per cent proposed Value-Added Tax (VAT) on ballpoint pens to 5 per cent in face of huge criticism from all walks of life including economists, educationists, students and their parents.

The government imposed 15 per cent VAT on pens, an important element of education, newly in the proposed budget for coming fiscal year (2023-24).

But the economists, educationists, students and their parents criticized the decision heavily and following this, the indirect tax on pens is going to be reduced to 5 per cent from 15 per cent.

The educationists, however, think that VAT should not be imposed on basic materials of education as the additional expense put pressure on the parents.

The parents are in pressure due to unusual price-hike of the education equipment. The prices of each material have already been soared by around 25 to 30 per cent. So, additional price-hike caused by imposition of tax will increase suffering of the parents further, they said.

Besides, the parents are in big trouble to meet the household expenses under the pressure of high inflation and if the prices of education materials rise again, it will become difficult for them to continue studies of their children, they added.

Keeping the situation in mind, the government is going to reduce proposed VAT on pens to 5 per cent from 15 per cent, officials of the National Board of Revenue (NBR) sources said.

Meanwhile, the government is also going to refrain from imposition of Tk 2000 as minimum tax, NBR officials said. Instead, the amount would be adjusted against tax at source during return filing as citizens already pay taxes at source, they added.

They said the proposed provision has not been brought in the new income-tax law following widespread controversy provoked by the budget proposal.

The government has decided not to impose Tk 2000 as minimum tax on people not having taxable income by ‘honouring opinion of cross-sections of people,’ they added.

The finance minister proposed the new measure while placing the national budget for fiscal year 2023-24 in parliament on June 1, 2023.

Currently, some 3.2 million taxpayers submit tax returns out of 8.7 million taxpayer-identification number (TIN)-holders.

However, most of the taxpayers submitting tax return to obtain different services showing proof of submission of return are paying tax at source.