Cancellation of surcharge on wealth with no taxable income proposed

Finance Minister AHM Mustafa Kamal today proposed to withdraw the provision of paying surcharge on wealth when there is no taxable income.

The proposal aims to make the application of surcharge easy and simple, the minister said while placing his budget proposal for the Fiscal Year 2021-22 in the parliament on Thursday.

He also proposed a reduction of the tax slabs to five instead of the existing seven for a taxpayer. In addition to that, withdrawal of the provision of paying a minimum surcharge was proposed at the session.

The finance minister said, "One of the major objectives of imposing direct taxes is to reduce economic inequality….. This (the proposals) will make compliance with the provisions of surcharge easier, and will also bring down the tax burden of the middle class."

Surcharge is a type of duty that is levied on the deed value of an individual's assets. Wealth surcharge is applicable to the payable amount of income tax at a prescribed rate of the tax authorities.

The surcharge-free limit of assets will remain unchanged at Tk3 crore. Prior to the budget session, economists and business leaders suggested that the total surcharge system needs to be restructured.