Parliament on Monday passed the Finance Bill-2015 with some major changes to the tax measures proposed originally, including lowering of tax at source for the RMG and other export earning sectors, alongside reduction of VAT for the private universities.
The Finance Minister came up with the Bill that contained some changes including restoration of tax-benefits on fisheries' income, and reduction of rates for others, complying with Prime Minister and Leader of the House Sheikh Hasina’s proposals in some areas, UNB reports.
The Finance Minister made the amendments to the Finance Bill before its adoption by parliament.
The at-source tax on export earnings has been lowered to 0.6 percent from 1 percent proposed in the Finance Bill for the fiscal 2015-16.
Currently, apparel exporters pay 0.3 percent tax on export bills while other exporters 0.6 percent.
After commencement of the new fiscal year on July 1, 2015, all exporters would have to pay a uniform rate of tax at 0.6 percent.
Apparel exporters, fish-farm owners and private universities witnessed cuts in tax rates in the approved Finance Bill.
The Finance Minister also increased the minimum amount of income tax for individuals residing in Dhaka and Chittagong. This year the taxpayers in the three city corporation areas in the two cities have to pay Tk 5000, where it was proposed Tk 4000.
Taxpayers in other city-corporation would have to pay Tk 4,000 while Tk 3,000 is set for rural areas and district towns.
In the budget proposal, Muhith had fixed a uniform rate of minimum tax at Tk 4,000 for all individual taxpayers. Currently, taxpayers in the city-corporation areas pay Tk 3,000 while in district towns Tk 2,000 and other areas Tk 1,000 at the minimum.
To facilitate the guardians as well as considering expansion of higher education, private universities, private medical colleges and engineering colleges would come under 7.5 per cent Value Added Tax (VAT) after a little cut. In the budget speech, the Finance Minister had proposed to slap 10 percent VAT on the private universities. Currently, these universities are exempt from payment of this tax.
Ayurvedic medicine would continue to enjoy exemption into FY 2015-16 as the proposed 5 percent VAT has been scrapped from the Finance Bill 2015.
Besides, the income tax on poultry industry and fish farming has been restructured. From FY 2015-16, the fisheries' and poultry income up to Tk 20 lakh would have no tax, income above Tk 20-30 lakh would have 5 percent tax. Above this limit, the tax rate doubles to 10 percent.
Until FY 2013-14, owners of fish farms had enjoyed a reduced rate of tax at 3 percent. The revenue board in September 2014 axed the tax-benefit following widespread criticism about abuse of the facility--even by some bigwigs.
Income from fish farms is currently subject to tax at regular rates applicable for corporate taxpayers and individual taxpayers.
Considering the extent of use of Internet, Muhith reduced the supplementary duty on Internet use to 3 percent from 5 percent while 5 percent import duty on books has been withdrawn to contribute to the expansion of knowledge.
Besides, the proposed 4 percent VAT has been withdrawn on e-commerce as well as 15 percent VAT on concrete bricks.
Muhith also made mandatory TIN for the guardians of the English medium schools at City Corporation, district Sadar and pourashava areas while the nine new banks would pay corporate tax at 40 percent like the other publicly traded companies.
Before placing the bill, Muhith promised, "We'll build a democratic, non-communal, development oriented state and society imbued with the spirit of the war of liberation."
Later, the House passed the Finance Bill-2015 voice vote with some objections from the opposition bench although they were present.
The Appropriations Bill 2015 would be passed in parliament on Tuesday.