The Income Tax Bill 2023 was passed in Parliament on Sunday to curb the discretionary powers of the income tax officers.
Finance Minister AHM Mustafa Kamal moved the Bill and it was passed by voice votes.
Instead of `Income-tax Ordinance, 1984` made in English language, the Income Tax Bill, 2023 has been made in Bengali language by making it more contemporary and modern. The contents of the provisions have been converted into simple Bengali.
As per the proposed law, income tax officers cannot fix income tax as per his/her wish and income tax will be determined according to the formula prescribed by law.
The proposed act has also been simplified and aligned with international best practices. In addition, there are proposals to increase the tax rate in some cases.
There are 348 sections in the proposed law and the business persons can easily submit their income tax returns.
A mathematical formula has been introduced in the act to assist the tax payers to determine their tax .
The act will help the tax payers to submit their income tax returns online.
As per the proposed law, no tax deducted in advance from interest earned from securities would be considered for refund or carrying forward.
Currently, the government is collecting direct tax under Income Tax Ordinance-1984.
From the upcoming fiscal year (FY), the government might get a complete new law in Bangla for the first time.
Tax would be imposed on the interest amount disbursed by the Mobile Financial Services (MFS) providers and also interest amount of loan taken from any citizen of Bangladesh, except bank.
Firm, association of person, fund having turnover more than Tk 20 million will have to submit audited financial statements under the new law.
Under the proposed law, taxpayers will be able to close their tax registration number if he has no taxable income, leaves the country or passes away.
The ceiling of investment rebate on monthly savings schemes would be increased to Tk 120,000 from existing Tk 60,000.
The taxmen would consider income derived from microcredit services as tax-free if it is a ‘revolving fund’ and spend on any asset for the services, not as capital for other businesses.
Except life insurance, premium income of other insurances, up to 10 per cent, is currently considered ‘allowable expenses’. It would be scrapped as a financial statement as per International Financial Reporting Standards (IFRS) has a provision to allow actual expenditure.
Submission of tax return under universal self-assessment method has been made mandatory for all taxpayers.
For expatriate Bangladeshis, tax- ay has to be calculated from the day of his return to up to 90 days.
At present, 29 types of documents are required to submit while filing a company`s tax return. It is being reduced to 12.
As per the law, bank depositors having only fixed deposit above Tk 10 lakh will need to submit tax returns.
Under the new law, all educational institutions, having English medium curriculum and English version, would also be considered as company and they would be required to pay corporate tax.
However, those having Bangla curriculum and those under the Monthly Payment Order (MPO) would remain out of this system.
Under the new law, educational institutions, Samity, trade and commerce associations, foundations, and non-government organisations would be treated as companies.
Apart from individuals, all other entities would be considered as company irrespective of their registration under Companies or Societies or Partnership Act.
The proposed abolished a provision to submit return with assets and liabilities if a person goes abroad personally except of medical treatment religious issue in any time of an income year.
Opposition lawmakers Fakhrul Imam, Shamim Haider Patwary, Raushan Ara Mannan, Kazi Feroz Rashid and Pir Fazlur Rahman also discussed on the merits and demerits of the proposed bill.
