Encouraging and discouraging aspects of budget in eyes of Mamun Rashid

Mamun Rashid, managing partner of PricewaterhouseCoopers (PWC) Bangladesh, has pointed out encouraging and discouraging aspects of the proposed budget for 2022-2023 fiscal year.

He said that the expenditure on advertisements which was specially omitted in the draft of Income Tax Act-2022 was not included in the Finance Bill 2022.

Moreover, he said, no changes on account of royalty expenses or even on Tax Deducted at Source (TDS) rates for non-residents have been proposed in the budget.  

Return submission for non-resident is mandatory whereas clarity in obtaining e-TIN for non-residents is not yet addressed, he added.

He said, WPPF, a statutory payment required by labor law would attract disallowance. 

Any default with respect to withholding tax (WHT) may result in loss of tax exemption or reduced tax rates. The corresponding expenses are already subjected to tax in the existing law. Hence, provisions relating to loss of entire exemption seems onerous.

The budget proposed a 12% tax on the profit of export of services. 

Mamun Rashid also appreciated the move to introduce provisions covering Amalgamation that would enable efficient corporate restructuring.

Relaxation to start-ups driven by innovation would give impetus to the Digital Bangladesh initiative, the economist opined. 

He said the increase of the threshold for excess perquisite from Tk5.5 lakh to Tk10 lakh is a welcoming move.

He also appreciated the move to lower the tax rates of diversified export industries.