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Tax-free income limit to remain unchanged

Tax-free income limit to remain unchanged

The government will continue the existing tax-free income limit in the financial year 2018-19 (FY19). Finance Minister A M A Muhith made the proposal on Thursday (Jun 7) while placing the national budget in the Jatiya Sangsad, local media reports said.

“I proposed that the tax exemption threshold and tax rate remain unchanged for the next year except that the threshold for a parent or guardian of a person with disability will be higher by Taka 50 thousand for each of such child or dependent, he said in his budget speech.

The existing tax exemption threshold is Tk. 2,50,000 in general cases. But the threshold was higher for special classes of taxpayers including female taxpayers.

Explaining the reasons of not changing the tax exemption limit, Muhith said in developed countries, tax exemption threshold is generally less than 25 percent of per capita GDP, and in developing countries it is mostly equal to per capita GDP. In Bangladesh, he said, tax exemption threshold is almost 200 percent of per capita GDP.

“That means our tax exemption threshold is high in global comparison. Moreover, the increase of tax exemption threshold puts a significant number of taxpayers out of the tax net,” he added. The existing tax exemption for the female taxpayers and senior citizens aged over 65 years is Tk. 3,00,000.

Existing minimum tax for a taxpayer, except company taxpayer, residing in Dhaka North City Corporation, Dhaka South City Corporation and Chittagong City Corporation is Tk. 5 thousand, residing in any other city corporation is Tk. 4 thousand, and residing in other area is Tk. 3 thousand. 

The Finance Minister also proposed these rates to remain unchanged.