Surcharge-free asset limit to be hiked to Tk 2.25cr

June 2, 2015

The government is likely to increase the limit of net assets for imposing wealth surcharge to Tk 2.25 crore from existing Tk 2 crore in the proposed national budget for financial year 2015-2016, said officials of the finance ministry. Currently, people having net assets worth Tk 2 crore or above pay wealth tax ranging between 10 per cent and 25 per cent based on their total net assets.
In the last fiscal year of 2013-2014, only 10,152 people with net assets above Tk 2 crore paid Tk 208 crore as wealth surcharge, also known as wealth tax, introduced in the FY12.
The government is set to increase the ceiling on pressure from the rich people, including businessmen of the society, said the finance officials.
Finance minister AMA Muhith may declare the tax measure in his budget proposals to be placed on Thursday.
The government may also lower the specific tax amount for buying residential apartments in semi-urban and rural areas through investment of undisclosed money, they said.
According to existing provision, untaxed money holders can legalise such money through buying residential building or apartment by paying Tk 700 for per square meter if the size of apartment remains below 200 square meters and Tk 1,000 for per square meter if the size of the apartment exceeds 200 square meters.
Tax at source at the rate of 10 per cent on capital gains earned by companies and firms through trading in stock exchanges may also be withdrawn in the next budget.
The revenue board has decided to scrap the provision to avoid complexities facing by the stock exchanges and holders of Trading Right Entitlement Certificate, or TREC, in deducting the tax in absence of information on net profit of the companies having either more than one beneficiary owners’ accounts or link accounts of the original one with different trading houses.
Companies will pay the tax on capital gains from the stock market with their income tax returns if the provision is excluded.
Tax-exemption benefits for high-salaried executives on receipts from workers’ profit participatory fund may also be withdrawn, the officials said.
Currently, receipts from the fund are totally tax free.
The NBR may impose tax at regular rates ranging from 10 per cent to 30 per cent on high-income executives on their receipts above Tk 1.2 lakh while the income of low-salaried staffs will remain tax-free.
The government is also set to abolish the upfront tax on the profit from the government securities from the upcoming national budget to explore the potentiality of secondary market of the government treasury bills and bonds, officials of the finance ministry said.
The revenue board in the current fiscal year imposed 5 per cent upfront tax on profit derived from the government securities and the Bangladesh Bank is supposed to deduct the tax during the issuance of securities to the primary dealer banks and other financial institutions.
The tax might be withdrawn to attract potential buyers of government treasury bills and bonds and to develop the secondary market as a vibrant mechanism of finance.
Currently, the secondary market size of government securities varies from Tk 50 crore to Tk 200 crore. There are two kinds of government securities — treasury bills and treasury bonds.
Initially, banks and financial institutions purchase and hold treasury bills and bonds through participating auction conducted by Bangladesh Bank.
In the secondary market, resident Bangladeshi individuals, institutions including banks, non-bank financial institutions and insurance companies can purchase or invest in the treasury bills and bonds.
Besides, corporate bodies and authorities responsible for management of provident funds and pension funds can invest in treasury bonds.

-Input from New Age

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