Raising the tax-free income threshold and reducing some compliance requirements are only two steps the government plans to implement in the next national budget to decrease the tax burden on people and businesses.
According to finance ministry insiders familiar with the situation, the revenue authority is thinking of raising the tax-free income threshold for individual taxpayers from the current Tk 350,000 to Tk 375,000.
On May 15th, a budget proposal for the 2025-26 fiscal year will be given to Finance Adviser Salehuddin Ahmed, and then to Chief Adviser Professor Muhammad Yunus on May 19th.
On June 2, the financial advisor is probably going to make the budget declaration.
A top finance ministry source indicated that these measures are under consideration to ease the impact of sustained high inflation on individuals.
For the past 26 months, Bangladesh has faced inflation rates over 9%, leading to a sharp decline in real incomes.
The Bareau of Bangladesh of statistics (BBS) indicates that the rate of inflation in April was 9.17%.
In the fiscal year 2023-24, the government increased the tax-free income limit from Tk 300,000 to Tk 500,000
Economists and business associations have regularly asked for a change of the tax-free income threshold in light of the ongoing cost of living crisis.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) advised the government to raise the cap to Tk 450,000 in March, while the Centre for Policy Dialogue (CPD) suggested raising it by Tk 50,000.
These remarks have been supported by other business groupings, who contend that the current threshold is no longer in line with economic realities.
The government is thinking about lowering the requirement to provide documentation of income tax return files in order to purchase savings certificates, and increasing the tax-free income roof.
