Finance Minister Abul Hasan Mahmud Ali presented the budget for the financial year 2024-25 in the National Parliament on June 6. The Finance Minister proposed a budget of Tk 797,000 crore for the next financial year under the title of pledge to build a happy, prosperous and developed Bangladesh. The proposed budget is being passed without major changes.
The Finance Minister will present the proposed budget for the financial year 2024-25 in the National Parliament today (June 30). Later it will be passed by voice vote of the members of Parliament. This is going to be the first budget of Abul Hasan Mahmud Ali as Finance Minister.
Earlier on Saturday (June 29), the National Parliament passed the Finance Bill-2024 with some amendments. By adopting an amendment to the bill before the bill is passed, parliamentarians retain the option of duty-free import of cars. Besides, black money has been given an opportunity to be white by paying 15 percent tax.
The budget for the financial year 2024-25 is about 36 thousand crores more than the budget of the current financial year. It has set a growth target of 6.75 percent and inflation at 6.5 percent.
Meanwhile, opposition Jatiya Party parliamentarians Hafiz Uddin Ahmed and Hamidul Haque Khandkar and independent parliamentarian Pankaj Nath have raised the proposal to verify public opinion on the money bill and send it to the selection committee. However, their proposal was rejected by voice vote. Khan Ahmed Shubo and Abul Kalam Md. government party members of parliament on the bill. Ahsanul Haque Chowdhury moved the amendment and it was accepted.
Hamidul Haque Khandkar of the Jatiya Party said that the two-pronged position of the government has been revealed in the bill. On the one hand, they say zero tolerance against corruption. On the other hand, providing opportunities to whiten black money. Where 30 percent tax is payable on legitimate income. 15 percent tax on illegal income there is not acceptable at all. However, the former prime minister and finance minister made black money white using this opportunity. The government should withdraw this immoral decision.
Independent Member of Parliament Pankaj Nath demanded to increase the surcharge on tobacco products. He said that the Prime Minister has announced to make the country tobacco free by 2040. But still 441 people die every day due to tobacco in the country. Surcharge should be increased to overcome this situation.
In response to the speech of the members of parliament, the finance minister said that inflation control, market-based bank interest rate and policy interest rate have been introduced to reduce the price of goods. Crawling peg method is being followed to keep dollar price normal. Inflation will be brought within 6.5 percent in the new financial year.
He said, Bangladesh has achieved all the capabilities to leave the LDC. The budget is giving importance to fulfill the 11 steps announced in the election manifesto of Awami League. Employment generation, addressing climate change risks and food security have been strengthened. He also said that if Smart Bangladesh is built, the per capita income will be 12 thousand 500 dollars by 2041. Poverty will come down to zero. In terms of food security, food assistance will be provided to crores of families through TCB, OMS activities will be continued and food assistance will be provided under social security.
The bill passed by the Parliament approved the fiscal provisions for the financial year starting July 1, 2024, amendments to existing laws and tax proposals. Many Members of Parliament (MPs) have been newly elected in the 12th National Parliament Elections. Taking their issue into consideration, MPs’ proposal to impose 25 percent duty on car imports has been withdrawn. Besides, the environment surcharge for the vehicles used by the company for the wealthy has been waived. Besides, the National Board of Revenue (NBR) will not audit the tax file if the return shows 15 percent more income than the previous year.
Apart from this, a provision has been added in the Income Tax Act to exclude pension income under the Universal Pension Scheme. Audit conditions will be relaxed to reduce harassment. For this reason, Finance Minister and State Minister of Finance have approved the proposal to amend the Income Tax Act through the Finance Bill. Under the new rules, if the return shows 15 percent more income than the previous year, the tax file will not be audited. This provision will be applicable in case of revised return. Only individual tax payers will get this opportunity.
In the proposed budget, immovable property such as land-plot-flat donation or Heba deed was taxed at source, so the transferor had to pay income tax at a fixed rate according to area, class of land at the time of transfer of property in Heba deed like ordinary sale. The government withdrew from that decision in the face of criticism. That is to say, without paying tax at source as per the previous rules, property transfer can be done between siblings, parents, sons and daughters, husband and wife, grandparents, grandparents and grandchildren. Currently, tax of 2 thousand 510 rupees has to be paid on the Heba document. A 15 percent gains tax is levied on the capital gains of funds and trusts like companies. And in the stock market, capital gains up to 50 lakh taka remain tax-free. However, if the capital income exceeds 50 lakh rupees, the gain tax has to be paid. In this case, the gain tax will be collected from individual tax payers in two ways.
According to the provisions of the bill, import of capital equipment in economic zones, hi-tech parks will remain duty-free. The finance minister had proposed a one per cent duty on import of capital equipment in the next fiscal year’s budget, but the government has taken initiatives to establish 100 economic zones in the country as part of efforts to boost exports and employment. The government announced tax holiday benefits for investing in them. In the face of demands from domestic and foreign investors, the government is withdrawing from the proposal to impose one percent import duty on capital equipment in economic zones and hi-tech parks.
Finance Minister Abul Hasan Mahmud Ali said about this tariff in the proposed budget of the next financial year. Later, the businessmen were demanding its withdrawal. They were saying that the investment came in the economic zone knowing about the tax holiday facility. They fear that this one percent tariff will hinder that investment. Opposition parties have also been criticizing the tariff proposal. Besides, through a notification on May 29, NBR withdrew 8 tax benefits including tax holidays for investors in private economic zones. Withdrawal of the 10-year tax holiday is expected to result in a tax rate of 20-27.5 percent or more on companies’ income depending on the industry.
Besides, foreigners working as technical assistants in economic zones would get 50 percent income tax exemption on their first three years’ salary. That too was cancelled. The 10-year tax exemption on dividends, capital gains, royalties, technical know-how and technical assistance fees for companies established in these territories was also abolished. Under the pressure of domestic and foreign entrepreneurs, the government has backed away from the decision to withdraw the tax holiday of private economic zones. That is, investors in private economic zones will get tax holiday benefits as before. Apart from this, the tax amnesty or special facility for laundering black money has been maintained. There is an opportunity to display black money by taxing 15 percent and plot-flat returns by taxing at a fixed rate per square meter.
Business Bangladesh/AK