The government is likely to keep the corporate tax rate unchanged in the upcoming FY2021-22 budget considering the pandemic impacts on the country’s business sector.
However, the trade leaders had demanded reducing the corporate tax due to the pandemic, said an official at the National Board of Revenue, adding that the government would not reduce the rate considering the revenue sector.The corporate tax rate for public traded companies will likely remain unchanged, the official said.
Currently the corporate tax rate for public traded companies is 25 percent and for non-publicly traded companies is 32.50 percent.
Rather, the government may bring a change to the advance income tax (AIT) and income tax at source to facilitate the traders, the NBR official said.
The government reduced tax rate of non-publicly traded companies by 2.5 percentage points to fix it at 32.5 percent from that of 35 percent in the current fiscal to ease the tax burden during the pandemic.
Revenue from the corporate tax rate is an important source of income for the government.
In Bangladesh, the corporate income tax rate is a tax collected from companies.Its amount is based on the net income the companies receive while performing their business activities during a fiscal year.
The NBR’s tax collection target for the FY2021-22 remains almost unchanged.
The revenue target of Tk 3.3 trillion of the outgoing financial year will remain unchanged.
However, the total income target of NBR may increase. The total income target for the current financial year is Tk 3.78 trillion.
For the FY 2021-22 budget, the total income target may be increased to around Tk3.90 trillion, NBR sources said.
In the fiscal year 2020-21, the government set a target of revenue collection for the NBR Tk 3.3 trillion.
Of which, Tk 1,288.73 billion is set as target for collection from VAT sector, Tk1,054.75 billion from travel and income tax sector and Tk 956.52 billion from the import duty sector.
According to the NBR, total revenue collection deficit in the FY20 was Tk 820.91 billion.
In the FY20, the revised target of NBR was Tk 3.05 trillion while the revenue board earned Tk2.18 trillion.
This is Tk 50.52 billion less than that of the FY2018-19. In the last financial year, the revenue collection totaled more than Tk 2.23 trillion.