More money, more problems? Tax for high-income individuals raised to 30%
NBR expects to add an extra Tk10,000 crore to the state coffers from high-income earners
To increase tax revenue collection from high-income individuals, the government has proposed a maximum rate of 30%, up from the present 25%.
This way, the National Board of Revenue (NBR) expects to add an extra Tk10,000 crore to the state coffers from high-income individuals.
Former NBR member Syed Md Aminul Karim welcomed the NBR's move to raise the tax rate for high-income people.
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"The rate hike would be a very positive move. The tax system should be progressive, rather than regressive. If the rate in the upper slab is increased, those who have more income have to pay more tax, which is logical," he said.
Earlier in the fiscal year 2020-21, the highest rate of individual income tax was lowered from 30% to 25% to give people some relief from the pandemic shocks.
Previously, the NBR increased the top tax bracket from 25% to 30% in FY2011-12 (FY12). Aminul Karim was in charge of tax policy at that time.
Currently, the NBR collects individual income tax under five brackets. From the next fiscal year, it will be under six brackets.
At present, the highest income tax rate of 25% is imposed on income over Tk16.5 lakh. Individuals in this high-income segment may have to pay 30% tax in the next fiscal.
However, Bangladesh's highest tax rate on individual income is lower than most countries. It is 42.7% in India, 35% in Pakistan and Sri Lanka. The rich countries have higher rate caps, such as 37% in the USA and 45% in the UK.
