Income Tax and Corporate Tax in Budget 2011-12
To ensure equitable development throughout the country and provide better services to the people, several steps have been proposed in the budget 2011-12 for the Simplification of Tax Payment 152 augmentation of income tax collection from domestic sources, simplification and modernisation of the system for filing of income tax return and payment of tax.
Threshold level for individuals is proposed to taka 1,80,000 from taka 1,65,000. Comparative tax rates is as below:
Existing Tax Rates Proposed Tax Rates
Level of Income (Taka) Tax Rate Level of Income (Taka) Tax Rate
up to 1,65,000 0% upto 1,80,000 0%
1,65,001 - 4,40,000 10% 1,80,001 - 4,80,000 10%
4,40,001 - 7,65,000 15% 4,80,001 - 8,80,000 15%
7,65,001 - 11,40,000 20% 8,80,001 - 11,80,000 20%
above 11,40,000 25% above 11,80,000 25%
The proposed rate for cigarette manufacturers to be increased to 42.5 per cent to discourage smoking.
Finance Minister proposed to introduce submission of acknowledgement receipt of return submission side by side TIN certificate in certain cases, introduce online service for payment of tax through specified banks against registration or renewal of fitness of car/motor vehicle, organise tax fair from 17-22 September 2011 in all divisional headquarters to provide one-stop service for submission of return and introduce provision.
Tax holiday incentive proposed up to June, 2013 and list of 17 categories industrial undertakings eligible for tax holiday. Active pharmaceuticals ingredient industry and radio pharmaceuticals industry, Barrier contraceptive and rubber latex, basic chemicals or dyes and chemicals, basic ingredients of electronic industry, bio-fertilizer, biotechnology, boilers, Compressors, computer hardware, energy efficient appliances, insecticide or pesticide, petro-chemicals, pharmaceuticals, processing of locally produced fruits and vegetables, radio-active application industry, textile machinery and tissue grafting.
Also propose to withdraw tax holiday incentives for industries set up in Dhaka, Narayangonj, Gazipur and Chittagong districts to avoid human and traffic congestion , to ensure balanced industrialisation and to encourage setting up of new industries in backward areas.
Tax holiday facility will be available for 10 years for rapid transit, toll road, elevated expressway, deep sea port, IT parks, Hi-tech park, renewable energy and ICT village or software technology zone.
Proposed to repeal the SRO related to reduced tax rates for certain industries being a duplication of the tax holiday incentive and rationalize the scope of Corporate Social Responsibility (CSR) to encourage its compliance in the budget. Proposed to ensure inter-company loan to be transacted through bank and put a limit on amount spent by the companies for purchase of car or jeep on the basis of paid up capital.
To rationalise the source tax rates for registration of flat, building or space of real estate developers on the basis of residential or commercial purposes. To consider as capital asset any land property situated in the district of Dhaka, Gazipur, Narayanganj or within the jurisdiction of RAJUK, CDA, KDA, RDA, City Corporation, Paurashava and Cantonment Board. The rate of tax deduction at source from all export proceeds to 1.5%, instead of 0.40%/0.50% and rate of tax deductible at source for brokerage commission of stock brokers listed with Stock Exchange from 0.05% to 0.10%.
Finance Minister proposed in budget 2011-2012 to raise the tax rate from 5% to 10% of disputed tax for filing appeal to Taxes Appellate Tribunal and from 10% to 25%/50% for filling reference to High Court. To make provision giving authority to Commissioner of Taxes to waive the tax payment requirement in proper cases.