The government will bring a number of changes to the tax proposals in the budget for the next fiscal year, taking into account the low-income people and the problem-ridden export sector.

Officials of the National Board of Revenue (NBR) said big changes may be made to the proposed tax on mobile phone bills, bank interest and export earnings.

Finance Minister AMA Muhith may give a final declaration in this regard in parliament on Wednesday.

In the proposed budget for the next fiscal year, the government raised tax at source on export receipts to 1.2 percent from the existing 0.6 percent.

But in the face of opposition from businesspeople, the rate may be lowered to 1 percent or 0.9 percent.

The NBR official said the export sector, especially readymade garments, has grown to an annual $18 billion export industry but they pay tax less than the corporate sector does.

The NBR has a plan to increase the tax on the apparel sector gradually and take the rate to 2 percent.

The official said the proposed tax on export earnings is going to be slightly reduced as this year has been showing a sluggish trend.

The government in the next fiscal year's budget proposed a 2 percent tax deduction at source on post-paid and pre-paid mobile phone bills.

The NBR official said either the proposed tax may be completely withdrawn or a threshold bill of Tk 200 may be set in case of taxes on pre-paid mobile bills.

The government has been facing criticism from economists, civil society members and general people since it has proposed the imposition of tax on mobile bills.

The Bangladesh Bank has already suggested that the tax should be levied on post-paid mobile bills instead of the pre-paid ones.

The central bank in a set of recommendations sent to the NBR recently said commercial banks provide mobile banking services to reach more unbanked people.

The BB also said people having accounts with banks that provide mobile banking services can get different services such as receiving remittances and various social safety allowances from the government.

Also, farmers can get fair prices for their produce and market their commodities in time through mobile phones, the central bank said.

The NBR official said they have already talked with mobile phone operators about the imposition of the tax.

The operators have told the tax administrator that if the tax is imposed, maintaining the tax-related documents will be difficult for the operators, according to the official.

Now there are around nine crore mobile phone subscribers in Bangladesh.

The government also proposed a minimum tax on individual taxpayers at Tk 3,000 from the existing Tk 2,000. But now the amount may be brought to its previous level or at Tk 2,500.

In the budget for the next fiscal year, it was proposed to charge 15 percent advance income tax instead of 10 percent on the interest earnings of the bank depositors who do not have any tax identification number.

But the NBR official said the government now plans to relax the rules. If a person has a deposit up to Tk 5 lakh and does not have a TIN, he will now pay 10 percent tax.

According to BB statistics, of the total bank accounts, 98 percent have up to Tk 5 lakh in deposit each. The number of total bank accounts is 5.52 crore now. Besides, the proposed 10 percent advance income tax on insurance premium may also be withdrawn.

Muhith yesterday told journalists that the government is considering the issue of withdrawing the 10 percent interest on insurance premium.

The Daily Star/Bangladesh/ 25th June 2012