The government has depended heavily on income and value-added taxes to attain its ambitious revenue goal.
Finance Minister AMA Muhith hiked duty on imports of various items, including powder milk and newsprint for newspapers. The hikes are likely to hurt newspaper readers and families that have to depend on imported milk for their children.
Muhith also increased so-called package VAT for small traders, wholesalers and shopkeepers, in a desperate bid to reach the revenue target set at Tk 136,090 crore for the next fiscal year.
Muhith legalised undeclared or black money, earned mostly through corruption, without question for purchases of apartments and lands in a bid to collect more money to raise finance for the budget.
Smokers will fall out with the minister as he increased taxes on cigarettes and bidi, one of the biggest sources of revenue. And cigarette makers will have to pay more corporate taxes.
Listed telecom operators, with only Grameenphone now in the market, will have to pay 40 percent corporate tax, up from 35 percent now.
But many of his measures, such as extension of tax breaks and benefits of reduced tax for the next two years to June 30, 2015, will boost domestic industries. Muhith also rolled out a host of other measures including higher duty on finished products and reduced duty on raw materials imports.
Although he raised the tax-free income limit for individual taxpayers to Tk 2.2 lakh from Tk 2 lakh, inflation will eat into the benefits.
The minister recommended cutting the existing minimum tax to Tk 2,000 from Tk 3,000 for people in district towns and for taxpayers in suburbs and villages — from Tk 3,000 to Tk 1,000.
But the minimum tax for taxpayers living in metropolitan areas remains unchanged.
“Such reduction in payment of minimum tax, I believe, would motivate the taxpayers in the rural areas to pay tax with effectual impact in widening the tax net,” Muhith said.
He made an attempt to make big businesses happy by keeping corporate tax largely unchanged.
DUTY MEASURES
Muhith left the existing duty-structure largely untouched as he cut duties only in two areas. He reduced import duty from 3 percent to 2 percent on capital machinery and from 12 percent to 10 percent on intermediate raw materials.
But importers of finished goods will continue to pay 5 percent regulatory duty on goods on top of 25 percent customs duty — a measure designed to safeguard the domestic players.
Muhith rationalised the present nine-slab supplementary duty structure to discourage infiltration of socially undesirable and luxury goods and to protect the domestic industries.
These measures will fuel the prices of imported float glass, billets, gas cylinders, potato chips and mosquito coils.
On the other hand, the prices of woven fabrics, digital cameras and web-cameras, server rack, solar lanterns and LED lamps, SIM cards, windshield glasses and minibus chassis, generator parts, fire extinguishers, raw materials of biogas plant and milk tankers will come down.
Finance Minister AMA Muhith hiked duty on imports of various items, including powder milk and newsprint for newspapers. The hikes are likely to hurt newspaper readers and families that have to depend on imported milk for their children.
Muhith also increased so-called package VAT for small traders, wholesalers and shopkeepers, in a desperate bid to reach the revenue target set at Tk 136,090 crore for the next fiscal year.
Muhith legalised undeclared or black money, earned mostly through corruption, without question for purchases of apartments and lands in a bid to collect more money to raise finance for the budget.
Smokers will fall out with the minister as he increased taxes on cigarettes and bidi, one of the biggest sources of revenue. And cigarette makers will have to pay more corporate taxes.
Listed telecom operators, with only Grameenphone now in the market, will have to pay 40 percent corporate tax, up from 35 percent now.
But many of his measures, such as extension of tax breaks and benefits of reduced tax for the next two years to June 30, 2015, will boost domestic industries. Muhith also rolled out a host of other measures including higher duty on finished products and reduced duty on raw materials imports.
Although he raised the tax-free income limit for individual taxpayers to Tk 2.2 lakh from Tk 2 lakh, inflation will eat into the benefits.
The minister recommended cutting the existing minimum tax to Tk 2,000 from Tk 3,000 for people in district towns and for taxpayers in suburbs and villages — from Tk 3,000 to Tk 1,000.
But the minimum tax for taxpayers living in metropolitan areas remains unchanged.
“Such reduction in payment of minimum tax, I believe, would motivate the taxpayers in the rural areas to pay tax with effectual impact in widening the tax net,” Muhith said.
He made an attempt to make big businesses happy by keeping corporate tax largely unchanged.
DUTY MEASURES
Muhith left the existing duty-structure largely untouched as he cut duties only in two areas. He reduced import duty from 3 percent to 2 percent on capital machinery and from 12 percent to 10 percent on intermediate raw materials.
But importers of finished goods will continue to pay 5 percent regulatory duty on goods on top of 25 percent customs duty — a measure designed to safeguard the domestic players.
Muhith rationalised the present nine-slab supplementary duty structure to discourage infiltration of socially undesirable and luxury goods and to protect the domestic industries.
These measures will fuel the prices of imported float glass, billets, gas cylinders, potato chips and mosquito coils.
On the other hand, the prices of woven fabrics, digital cameras and web-cameras, server rack, solar lanterns and LED lamps, SIM cards, windshield glasses and minibus chassis, generator parts, fire extinguishers, raw materials of biogas plant and milk tankers will come down.
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