Friday, 29 September, 2023

Income Tax Bill 2023 placed in Parliament

The Income Tax Bill 2023 was placed in Parliament on Thursday curbing the discretionary powers of the income tax officer.
Finance Minister AHM Mustafa Kamal placed the Bill and it was sent to the respective scrutiny committee for further examination. The Committee was asked to submit its report within five working days, reports UNB.
The Income Tax Ordinance 1984 is going be replaced by the new Income Tax Bill when it will be passed by Parliament.
Instead of 'Income-tax Ordinance, 1984' made in English language, the Income-tax Act, 2023 has been made in Bengali language by making it more contemporary and modern. The contents of the provisions have been converted into simple Bangla.
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 Act and the business persons can easily submit their income tax returns.
A mathematical formula has been introduced in the Bill to assist the tax payers to determine their tax and as per the result of it, the tax payers can pay their taxes.
It 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. There was a full-fledged income tax Act in 1922.
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-day 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.