BSS-34 CPD for raising tax free income ceiling to Tk 3 lakh

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ZCZC

BSS-34

CPD-BUDGET

CPD for raising tax free income ceiling to Tk 3 lakh

DHAKA, June 3, 2018 (BSS)-Centre for Policy Dialogue (CPD) has suggested the government to raise the tax free income ceiling to Taka 3 lakh and reducing the first slab of Personal Income Tax (PIT) rate to 7.5 percent from the prevailing rate of 10 percent.

The research think tank also suggested the government not to slash corporate tax, saying it will not play any role to boost investments.

“Corporate tax rate is an important source of revenue for Bangladesh which contributes about two-thirds of income tax collection. Reduction in corporate tax entails negative implications for the economy, including discrimination against other businesses,” said distinguished fellow of CPD Prof Mustafizur Rahman while making a presentation on “State of the Bangladesh Economy in FY 2017-18” at BRAC centre Centre Inn here today.

He suggested that corporate tax rates should not be reduced in a hasty manner and on an ad-hoc basis. Reduction in corporate tax will be effective to attract private investment only when the overall investment climate is favourable for business, he added.

CDP distinguished Fellow Dr Debapriya Bhattacharya said excessive rise in overall imports is not a good sign. If such imports especially luxurious products should be controlled and monitoring should be beefed up in the upcoming budget for fiscal year 2018-19 (FY19) to check money laundering, he added.

Highlighting various irregularities in the banking system, Debapriya recommended for creating a commission on banking sector.

Debapryia said the revenue collection will experience a deficit of about Tk 50,000 crore in the current fiscal 2017-18.

He said the main challenge of the government in the coming budget will be increasing the tax-GDP ratio.

He said there is high possibility of increasing risks in financial management in election year and suggested the government to maintain a prudent economic management to face such risks.

CPD expressed grave concern over the government`s increasing dependence on borrowing from savings instruments. Due to borrowing from NSD, the government will have to pay Tk 32,000 crore as interest in the current fiscal, it added.

“Savings certificates are sometimes misused as many rich people buy the instruments for higher profits,” said Mustafizur Rahman.

CPD Executive Director Dr. Fahmida Khatun and Director Research Dr. Golam Moazzem also spoke at the programme.

BSS/RI/TAN/MMA/1829hrs