The New Nation - Internet Edition

UNB, Dhaka

The caretaker government refused to entertain the plea for a change in the budget raising the income-tax slab for the next fiscal year (2008-09) to match with the inflationary pressures.

"The existing limit for tax-free income, tax rates, income slabs for individuals shall remain unchanged for the upcoming fiscal year," Finance Adviser Dr Mirza Azizul Islam said in his budget speech yesterday.

But, for female taxpayers and senior taxpayers of ages exceeding 70, he proposed to raise the limit for tax-free income to Tk 165,000. For others, the ceiling continues to be Tk 150,000. "It may be mentioned that the limit for tax-free income was considerably raised in the last fiscal year," the Finance Adviser said to support his position on not making any change in the income-tax ceiling and rate.

He, however, reduced the tax rate for listed and non-listed companies. He proposed to revise the tax rate for companies listed for public trading from 30 percent to 27.5 percent, for companies not listed for public trading to 37.5 percent from 40 percent.

"The 45 percent rate for banks, insurance, financial institutions and mobile-phone operators will, however, remain unchanged."

For corporate taxpayers, Dr Aziz proposed to impose income tax on dividend income in accordance with the applicable scheduled rates for companies instead of the existing 15 percent.

Currently, according to Section 16CC of the Income Tax Ordinance, all companies, irrespective of profit or loss, have to pay a minimum tax on the basis of their turnover, which is clearly in breach of the fundamental principles of Income Tax.

"I propose to rescind this Section."