Fiscal Reforms : Overview of Proposed Budget Measures

Overview of Proposed Budget Measures

Overview of Proposed Budget Measures

The proposed budget for the fiscal year 2024-25 in Bangladesh brings significant reforms across various sectors, aiming to streamline taxation, enhance revenue collection, and promote equity in economic policies. Key highlights include:

1. Duty Imposition on MPs' Car Imports

Members of Parliament (MPs) will no longer enjoy duty-free privileges on car imports. A 25% supplementary duty and 15% tax will be imposed on MP car imports, aligning with efforts to reduce discrimination and promote fairness in taxation.

2. Unchanged Baggage Rules

Current baggage rules, allowing passengers to bring in 117 grams of gold by paying a duty of 4,000 rupees, remain unchanged. Despite proposals to limit this allowance to once a year, the Prime Minister has vetoed the decision, ensuring taxes are levied each time gold is brought in.

3. Conditional Corporate Tax Rate Reduction

The corporate tax rate will be reduced conditionally, with non-listed industries in the manufacturing sector seeing a reduction from 27.5% to 25%. However, tax rates in other sectors will remain unchanged.

4. Tariff Benefits for Agricultural Inputs

Tariff benefits on the import of agricultural inputs and fertilizers will be maintained, ensuring the cost of importing these products does not increase, in line with the Prime Minister's advice.

5. Introduction of Self-Assessment Mode for Income Tax

To streamline tax assessment processes and boost revenue collection, individuals and organizations will be required to file income tax through self-assessment mode. This shift aims to reduce taxpayer harassment and increase compliance.

6. Unchanged Tax-Free Income Limit

Despite rising inflation, the tax-free income limit at the individual level will remain unchanged at Tk 3.5 lakh, maintaining consistency with the previous fiscal year's threshold.

7. Increased Taxation for High-Income Individuals

The government plans to impose additional taxes on high-income individuals, raising the tax rate from 25% to 30% for annual incomes exceeding 16 lakh rupees. Additionally, tax exemptions in various sectors will be reduced, and exemptions on capital gains from stock market investments will be withdrawn.

8. Revenue Collection Targets

The proposed budget sets a revenue collection target of Tk 4 lakh 80 thousand crores for the fiscal year 2024-25, aiming to surpass the previous target of Tk 4 lakh 10 thousand crores, reflecting the government's commitment to fiscal discipline and resource mobilization.

The proposed budget reflects the government's focus on enhancing revenue generation, promoting equity in taxation, and fostering economic sustainability. These reforms aim to create a more balanced and inclusive fiscal framework, driving growth and development in Bangladesh.

   


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