Chartered accountants support minimum tax

Chartered accountants have welcomed the government's move to extend the direct tax net by implementing a minimum income tax of Tk2,000 for individuals who would submit tax returns to avail themselves of certain services.

In its budget reaction on Saturday, the Institute of Chartered Accountants of Bangladesh (ICAB) also hailed the proposal to raise the ceiling for tax-free income by Tk50,000 to Tk3.5 lakh as it would effectively reduce the tax burden on a wide portion of the middle class.

In a keynote presentation, Snehasish Barua, partner at Snehasish Mahmud and Company, said people in the monthly income range of Tk37,500 to Tk42,500, excluding festival bonuses, would end up with Tk2,000 in income tax, down from Tk5,000.

Also, the monthly income, excluding festival bonuses, ranging from Tk70,000 to Tk80,000, would see income tax going down by up to Tk5,000, he said, adding that income in between would see their tax unchanged at Tk5,000.

"The mass people in Bangladesh have been paying a lot of indirect taxes, regardless of whether they have taxable income or not, while the country at the bottom of the tax to GDP ratio table needs much more direct tax," said ICAB past president Md Humayun Kabir, who is the chairman of the body's Taxation and Corporate Laws Committee.

He also said the taxpayer identification number (TIN) certificate holders must submit the return to avail 38 services, they were already paying many taxes at sources against many services, and many do not submit an income tax return, citing no taxable income.

Tax returns create many tax refund opportunities, and the new minimum of Tk2,000 would help extend the tax net without imposing much burden, he added.

ICAB President Md Moniruzzaman hailed their Document Verification System (DVS), which was helping accounting transparency and the government's resource mobilization.

The body of accountants has long been making tax, duty, and value-added tax prescriptions based on their research, and Moniruzzaman thanked the government for several pragmatic fiscal measures, including an environmental surcharge, encouraging local production, rationalizing the definition of bill of entry for bonded goods, and treating online marketplaces rightly.

The proposed budget of Tk7.62 lakh crore, eying 7.5% GDP growth, was a timely one, and despite challenges, it would be achievable, said the ICAB president.

Top ICAB officials and relevant committee members were present at the press conference on the proposed budget for the fiscal 2023-24 at the CA Bhaban in the capital.