The National Board of Revenue (NBR) has proposed a significant overhaul of the income tax structure, suggesting an increase in the minimum tax rate from 5% to 10%.
Additionally, the revenue authority has recommended raising the mandatory minimum tax across different taxpayer categories.
These proposals, aimed at enhancing tax collection, are set to be reviewed by the Ministry of Finance before being forwarded to the Chief Adviser’s Office for final approval.
Economic analysts have expressed concern over the impact of these measures on general taxpayers, arguing that such increases will place a heavier financial burden on middle-income earners.
Critics have pointed out that while NBR seeks to bolster revenue, it is doing so at the expense of ordinary citizens.
During a recent meeting, NBR Chairman Abdur Rahman Khan stated that tax rates for lower-income brackets would see a marginal rise.
A senior NBR official, speaking on condition of anonymity, revealed that the revenue collection target for the upcoming fiscal year has been set at Tk5.21 lakh crore, up from the revised target of Tk4.63 lakh crore in the current budget.
Given this ambitious target, additional tax measures are deemed necessary.
The official further explained that while the proposal for a higher minimum tax rate has been forwarded to the finance ministry, its final adoption will depend on deliberations at the Chief Adviser’s Office.
The proposal may either be approved for inclusion in the next budget or discarded altogether.
Former NBR Chairman Abdul Majid remarked that the government is grappling with financial constraints, making revenue collection more crucial than ever.
However, he emphasised that expanding the tax net, rather than increasing rates, would be a more effective approach.
He cautioned that repeated tax hikes would disproportionately affect lower and middle-income earners.
Currently, individuals earning up to Tk3.5 lakh per annum are exempt from income tax, with higher exemptions for senior citizens, women above 65, and individuals with disabilities.
Under the existing structure, taxable income beyond this threshold is subject to a progressive rate starting at 5% and rising up to 30%.
However, NBR has now proposed revising this structure, increasing rates across several brackets, with the highest tax slab reaching 35%.
Furthermore, taxpayers in Dhaka and Chattogram city corporations are currently required to pay a minimum tax of Tk5,000, while those in other city corporations pay Tk4,000.
For residents outside city corporation areas, the minimum tax stands at Tk3,000.
NBR’s new proposal seeks to raise these amounts to Tk6,000, Tk5,000, and Tk4,000, respectively.
According to NBR data, over 1.15 crore individuals hold Taxpayer Identification Numbers (TINs), but only 39.73 lakh filed returns in the current tax year, contributing Tk3,144 crore to state coffers.
More than 71 lakh registered taxpayers failed to submit returns.
The NBR believes that increasing the minimum tax rate and expanding compliance measures will significantly boost revenue collection.
NBR Chairman Abdur Rahman Khan has warned that those who hold TINs but fail to file returns will face strict action.
"There will be no escape. Our officials will issue notices, and non-filers will be compelled to comply," he asserted.
With the government struggling to meet its fiscal demands, these tax proposals, if approved, will shape the financial landscape for taxpayers in the coming year.
Whether they achieve the intended revenue boost without unduly burdening ordinary citizens remains a subject of debate.
