By FutureLaw Desk
Finance Minister Abul Maal Abdul Muhith unveiled a Tk 4,64,573 crore national budget for the fiscal year 2018-19 on June, 7 2018, setting the GDP growth target at 7.8 percent. Certain changes have been made in the taxation regime, which are expected to be promulgated by the Finance Act, 2018 on July 1st, 2018. It is pertinent to note that the National Board of Revenue (NBR) is seeking to keep most of the tax measures unchanged in a bid to attain the 31 percent higher income tax collection target of Tk 102,201 crore for fiscal 2018-19.
Some major changes brought in the taxation regime for the FY 2018-2019 are summarised below:
1. The ceiling for personal income-tax: The government did not raise the ceiling for tax-free income in fiscal 2018-19, as it stands at BDT 250,000.
2. Employer’s liability to resist tax evasion by employees: Rigid measures are contemplated for the employers for ensuring the filing of the return by their employees. The employers will have to submit statements on return submission by its employees. If the employer firm/company fails to comply with the new measure, its entire tax returns will be audited by NBR.
3. Increased tax-rate for ready-made garments industries: The corporate tax for the non-listed garment sector is proposed to increase to 15% from the rate of 12%. For green garments, the tax is proposed to increase to 12% from the previous rate of 10%. Furthermore, the 12.5% corporate is proposed for the publicly listed garment companies on the stock market.
4. Withdrawal of multi-layered taxation on dividends: Provisions have been added to withdraw the provision of taxing dividend income multiple times.
5. Tax and VAT on Ride-sharing service providers: A 3% withholding tax and 5% VAT is proposed for the services of ride-sharing services. Furthermore, Changes has been brought in the Income-tax Ordinance, 1984 to ensure that the car owners who are offering taxi service by way of Uber and Pathao will have to submit returns.
6. Enforcement measures: To curb tax evasion, the NBR also brought in changes in the rule under which other agencies can share financial information of taxpayers automatically with NBR. It also aims to use email as legal instrument to issue the notice under the Income-tax Ordinance. 1984.
7. Supplementary Duty on polyethene and plastic bags: To encourage the use of green product jute, a 5-per cent supplementary duty has been proposed on all polythene bags, plastic bags and poly-packaging in the budget for fiscal 2018-19.
Please find the entire Budget bill from the NBR Website.