Thursday, 7 July, 2022

Corporate tax rates to be further reduced in FY23

The corporate tax rates will be further reduced in the next fiscal year (2022-2023), but all receipts and income must be transacted through bank transfer.

"In FY2022-2023, I would like to propose a further reduction of the existing corporate tax rates. In this case, all receipts and income must be transacted through bank transfer and all expense and investment over Taka 12 lakh must be made through bank transfer," Kamal said this while placing the proposed national budget for FY23 at Jatiya Sangsad today.

He proposed to reduce the tax rate for non-listed company from 30 percent to 27.5 percent. It was also proposed to reduce the tax rate for OPCs from 25 percent to 22.5 percent to facilitate formalization of the economy and to incentivize formation of One Person Company. 

For the sake of development of the stock market and attracting investments, the Finance Minister proposed a tax rate of 20 percent in place of existing 22.5 percent for listed companies that issue shares worth over 10 percent of its paid up capital through Initial Public Offering (IPO).

Kamal, however, proposed the tax rate to be 22.5 percent for a listed company that issues shares worth 10 percent or less than 10 percent of its paid up capital through IPO. 

But in this case, the tax rate would be 25 percent instead of 22.5 percent if the company fails to comply with the conditions mentioned earlier, he added.

Rationalizing the corporate tax rates cut, Kamal said that the desired target for private investment to GDP ratio can be achieved by reducing corporate tax rate. 

With a view to facilitating rapid expansion of trade and commerce, he said the corporate tax rate was earlier reduced from 32.5 percent to 30 percent through Finance Act 2021.