BEA Proposes Tax Increase for the Wealthy

The National Board of Revenue (NBR) in Bangladesh is set to introduce tax return preparers (TRPs) who will be allowed to prepare and submit tax returns with incentives starting from July 1. TRPs will receive incentives based on the amount of tax collected, ranging from 10% for minimum tax to 0.5% for the remaining amount. These incentives will be applicable for the first five tax years to encourage start-up taxpayers.

In a remarkable milestone, Bangladesh surpassed 30 lakh tax returns filed in the fiscal year 2022-23, marking the first time this threshold has been crossed. This achievement can be attributed to the National Board of Revenue's (NBR) proactive efforts to expand the tax net through policy measures and increased taxpayer awareness. By April of this fiscal year, the NBR received 31.7 lakh tax returns, representing a substantial 22% growth compared to the previous fiscal year.

According to sources at the finance ministry, the government intends to increase the surcharge-free threshold for wealth from Tk3 crore to Tk4 crore in the next fiscal year. While the tax rates will remain unchanged from the previous fiscal year, economists and experts argue that the government should revise the surcharge calculation method to ensure that wealthy individuals pay a fair share of taxes in the current economic climate. The finance minister is scheduled to present the budget for the upcoming fiscal year on June 1.

The SME Foundation has submitted a comprehensive 56-point recommendation to the National Board of Revenue (NBR), advocating for distinct tax, duty, and tariff structures for small and medium enterprises (SMEs) in the upcoming budget. These proposals include the establishment of preferential tax regimes or clusters to provide SMEs with lower tax rates and simplified taxation processes. The aim is to create a supportive environment for SMEs, stimulate their growth, and enhance government revenue.

Bangladesh Economic Association (BEA) has proposed a tax increase for the wealthy and relief measures for the lower-middle class in order to boost government revenue and alleviate the financial burden on the majority of the population. Abul Barkat, the president of BEA, emphasized the negative impact of inflation, forcing people to deplete their savings or borrow money to meet their basic needs. The association presented an alternative budget of Tk 20.94 lakh crore for the upcoming fiscal year, aiming to elevate 70 to 80 percent of the population to the middle class and reduce inequality.

Chittagong Custom House is experiencing a decline in revenue collection, with the first 10 months of the current fiscal year falling 22.12% short of the target. The government's austerity measures to curb imports and address the dollar crisis have led to a reduction in the number of letters of credit (LCs) opened by importers. As a result, revenue income has also decreased, along with import and expenditure.