Govt may raise income tax ceiling

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The government may bring a few changes in the proposed budget including raising the income tax ceiling and withdrawing tax on the profit of deposit pension schemes.

The proposed budget for the fiscal year 2008-09 is likely to be placed before the advisory council today for approval. The budget will be passed through an ordinance after the council approves it.

Earlier on June 9, Finance and Planning Adviser Mirza Azizul Islam proposed the Tk 99,962 crore budget.

Since there is no parliament to debate the proposed budget, the government invited different quarters to post their recommendations and suggestions regarding the budget on the government website within June 16.

The government also took into consideration recommendations and reactions of different chambers and trade bodies, economists and individuals.

Sources said the government may withdraw the 10 percent tax on the profit of deposit pension scheme, which was not imposed in the proposed budget but had already been there for the last few years, to increase deposits in the banks.

In the budget to be submitted for advisory council’s approval, the limit for tax-free income may be increased to Tk 1,65,000 from the existing Tk 1,50,000.

For female taxpayers and taxpayers aged over 70 years, the limit may be raised to Tk 1,80,000 from the proposed Tk 1,65,000.

People from different quarters had, however, urged the government to increase the limit of tax-free income to Tk 2,00,000 since expenditure of the middle class people has increased significantly following food price hike and inflation.

In the proposed budget, the government raised the duty on printed paper to 25 percent from the existing 15 percent. But following criticisms, it might keep the existing duty unchanged.

The government may also keep the existing 15 percent customs duty on pictorial and drawing books used as educational material for children. Mirza Aziz had proposed increasing the duty to 25 percent, saying the contents of these books are not in conformity with the values and culture of the country.

The government may also reduce the proposed high duties on cigarette and tobacco raw materials fearing decrease in the huge revenue income from the sector.

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