Tax free income ceiling may increase

Tax free income ceiling may increase

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The NBR has been entrusted with the responsibility of achieving the revenue collection target of Taka 4.3 trillion in the next fiscal year. This is 600 billion taka more than the target given in the current financial year 2022-23. In the last fiscal year of 2021-22, there was a deficit of Tk 300 billion in the collection of duties and taxes. In case of such a deficit in the current fiscal year, the NBR will be under pressure to collect additional revenue of around one trillion taka next year.

There is a reason for this increased pressure. In late January, the International Monetary Fund (IMF) approved a $4.7 billion loan for Bangladesh. While approving that loan, the institution imposed several conditions on various sectors including NBR. For example, additional duties and taxes have to be collected in the next financial year in addition to the normal increase. This will be 50 percent of the gross domestic product (GDP). In addition, Bangladesh will have to take steps to rationalize duty and tax exemptions.

NBR sources said a team from the NBR and the IMF is currently working jointly to find ways to rationalize duty exemptions and increase revenue collection. Shamsuddin Ahmed, Member, Income Tax Department, NBR, is leading the initiative on behalf of the NBR.

A senior NBR official, on the condition of anonymity, said that the chaos of so many days will not end overnight. Even though the rationalization of tax exemptions could not be achieved completely, it would have a partial reflection in the next budget.

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