finance bill 2015

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Trade License No: 01-08320

Tax Identification No: 398380629238

SYNOPSIS OF FINANCE BILL 2015

GOVT. SETS TARGET OF NBR EARNINGS TK 1,76,370 CRORE- AN INCREASE OF

30.62% FROM THE OUTGOING YEARS’ REVISED TARGET. NBR EARNINGS WILL

BE COMPRISED OF INCOME TAX 36.84%, VAT 36.44% & IMPORT DUTY &

OTHERS 26.72%. THE PAPER IS PREPARED ON THE BASIS OF PROPOSED

BUDGET PRESENTED BY FINANCE MINISTER AMA MUHITH ON JUNE 4, 2015

BEFORE PARLIAMENT FOR THE NEXT FISCAL YEAR (FY 2015-2016)

INCOME TAX

01. Relief for Individual Taxpayers:

Tax-free income ceiling raised for General citizen of TK. 30,000/-

Tax-free income ceiling raised for women & senior citizen of TK. 25,000/-

Tax-free income ceiling raised for physically handicapped of TK.25,000/-

Tax-free income ceiling raised for War-wounded gazetted freedom FightersTk 25,000/-

02. Tax rate becomes more digressive.

Types of Tax payer

Existing (2014-2015)

Proposed (2015-2016)

General Tax Payer

Tk. 2,20,000/-

Tk. 2,50,000/-

Women tax payer

Tk. 2,75,000/-

Tk.3,00,000/-

Senior Citizen (tax payers of 65 years of age and above)

Tk. 2,75,000/-

Tk. 3,00,000/-

Physically handicapped

Tk. 3,50,000/-

Tk. 3,75,000/-

War-wounded gazetted freedom fighters

Tk. 4,00,000/-

Tk. 4,25,000/-

Individual Tax Rate

Total Income Tax Rate

On first, Tk.2,50,000/- of taxable income

Nil

On next, Tk.4,00,000/- of taxable income

10 %

On next, Tk.5,00,000/-of taxable income 15 %


20 %


25 %

On the balance of taxableincome

30%

03. Minimum Tax: Minimum Tax has been extended to TK 4,000/-.

04. Surcharge:

Relief for Wealthy people.

The ceiling of Net wealth free from Surcharge has been extended to TK 2.25 Crore.

Introducing Minimum Surcharge of TK 3,000/-.

Having Net Wealth Rate of Surcharge

TK 2.25 Crore to 10 Crore 10% Surcharge on Payable Tax

TK 10 to TK 20 15% Surcharge on Payable Tax

TK 20 Crore to TK 30 Crore 20% Surcharge on Payable Tax

Over TK 30 Crore 25% Surcharge on Payable Tax

05. Income Tax Credit/ Tax Rebate is same as before.

Existing Remaining Unchanged

Investment Ceiling in taka 1.5 crore 1.5 crore

Investment ceiling as percentage

of totalincome

30% 30%

% of Tax rebate 15% 15%


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06. No more discrimination between theEmployees of Public and Private sector: Govt. employees’ salary, allowances, Bonus& Festival Bonus are subject to taxation.

07. Tax free limit of Medical Allowance has been fixed up as 10% of Basic Salary and

1,20,000/- whichever is lower.

08. Tax free limit of House Rent Allowance has been fixed up as 50% of Basic Salary and 25,000/- per month whichever is lower

09. Conveyance Facilities: In case of employer’s provided conveyance facilities, income to be added 5% of Basic Salary or 60,000/- whichever is higher.

10. Tax free limit of any income as gratuity has been fixed up to taka two crore fifty lakh received by an assesse.

11. Tax free has been made for income received by a laborer from workers participation fund. But taxable for income received by an employee of management level from workers participation fund.

12. Scope of whitening black money is existed as before: 19BBBBB (Special tax treatment in respect of investment in residential building and apartment) is existed as follows:

Tax on Investment in House/ Flat

Location of the Property Rate on per sq. meter up

to 200 Sq. meter

Rate on per sq. meter above 200 Sq. meter

Gulshan Model Town, Banani, Baridhara, Motijheel Commercial Area and Dilkusha Commercial Area of Dhaka.

5,000/- 7,000/-

Dhanmandi Residential Area, Defence Officers Housing Society (DOHS), Mahakhali, Lalmatia Housing Society, Uttara Model Town, Bashundhara Residential Area, Dhaka Cantonment, Kawran Bazar, Bijaynagar, Segunbagicha, Nikunja of Dhaka and Panchlaish, Khulshi, Agrabad and Nasirabad Area of Chittagong.

4,000/- 5,000/-

Other areas of City Corporation 2,000/- 3,000/-

Paurasabha of any district headquarters 600/- 800/-

Other Areas including Upazilla 400/- 600/-

More than one house/flat Additional 20%

Additional 20%

19BBBBBB (Special tax treatment in respect of investment in land property) is also existed:

In Case of Plot/land Purchase:

Tax Rate on Total Value 10%

In case of more than one Plot/Land additional tax on payable sum

20%

13. Reduction of Tax Rate for Company

Tax rate for public limited company except Merchant bank, Mobile phone operator, & cigarette manufacturers is reduced from 27.5% to 25%.

Tax rate of publicly traded company of bank, insurance&financial institute cut 2.5%. Hence, 40%.

Minimum turnover tax rate remain same as 0.30. But the rate is reduced to 0.10% on receipt for an industrial undertaking engaged in manufacturing goods for first three years. (Amendment of U/S 16CCC, ITO 1984).


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Company Tax Payers Previous Rate Current Rate

Publicly Traded Company 27.5% 25%

Non-Publicly Traded Company 35% 35%

Public Traded (Bank, Insurance and Financial Institution ,other than Merchant Bank) Non-Public Traded (Bank, Insurance and Financial Institution ,other than Merchant Bank)

42.5%

42.5%

40%

42.5%

Merchant Bank 37.5% 37.5%

Publicly Traded Cigarette

40% 45%

Non-Publicly Traded Cigarette Manufacturing Company

45% 45%

Publicly Traded Mobile Phone Company

40% 40%

Non-Publicly Traded Mobile Phone Company

45% 45%

Dividend Income

20% 20%

Minimum Turnover Tax

0.30% 0.30%

(0.10% on receipt for an industrial

undertaking engaged in

manufacturing goods for first three years.)

14. Tax rate for Poultry, Cattle & Hatchery:

Particulars Previous New

Income from poultry 0% First 10 Lac-3%, Next 20 Lac-10%, Rest-15%

Income from poultry feed, Cattle, seed, Milk, frog, apiculture, sericulture & Floriculture

3% First 10 Lac-3%, Next 20 Lac-10%, Rest-15%

Duck & Hatchery General Tax Rate First 10 Lac-3%, Next 20 Lac-10%, Rest-15%

15. Income Year: Uniform the period of income year to reduce tax evasion.

I. The period of Income year for all classes of assesse EXCEPT Bank, Insurance & NBFI is proposed to fix from 1st July to 30th June. Fiscal year to be treated as income year.

II. Calendar Year (1st January to 31st December) to be treated as income year for Bank,

Insurance & NBFI.

16. Charge of additional tax (16B): Any person employs any individual other than

Bangladeshi Citizen without prior approval of BOI or competent authority, such person shall be charged additional tax at the rate of 50% of tax on his income or TK 5,00,000/- whichever is higher in addition to tax payable under this ordinance.

17. Perquisite: Perquisite has been extended to TK 4,50,000/- (U/S 30E).

18. Set off: No loss can be set off against income of manufacturing of Cigarette.


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19. TDS for resident Taxpayers for following services:

SL. No Description of payment Rate of deduction

1. Catering service 10%

2. Cleaning service (a) commission (b) gross receipts

10% 1.5%

3. Collection and recovery Agency (a) Commission (b) Gross Receipts

10% 1.5%

4. Contract or toll manufacturing 10%

5. Credit rating agency 10%

6. Event management (a)commission (b)gross receipts

10% 1.5%

7. Indenting commission 7.5%

8. Meeting fees, training fees or honorarium 10%

9. Mobile network operator, technical support service provider or service delivery agents engaged in mobile banking operations

10%

10. Motor garage or workshop 5%

11. Printing service 3%

12. Private container port or dockyard service 5%

13. Private security service provider- (a) commission (b) gross receipts

10% 1.5%

14. Product processing charge 10%

15. Shipping agency commission 5%

16. Stevedoring/berth operation commission 10%

17. Supply of manpower (a)commission (b)gross receipt

10% 1.5%

18. Transport provider 3%

19. Any other service which is not mentioned in Chapter VII of this Ordinance and is not a service provided by any bank, insurance or financial institutions

10%

20. TDS for non resident taxpayers:

Sl No. Service Sector Rate

1. Salary/ Honorarium 30%

2. Capital gain

(a) From capital Asset (b) By a company or firm if such gain arises

from securities listed with any stock exchange is in Bangladesh which is not exempted from tax in the country of such non-resident

15% 10%

3. Dividend (a) Company (b) Any other person not being a company

20% 30%

4. Artist/Actor/Player 30%

5. Interest/ Royalty/ Commission 20%

6. Management/ Event Management 20%

7. Legal service 20%

8. Accounting/Tax Consultancy 20%

9. Professional Service 20%

10. Consultancy Fees 30%

11. Certification fees 30%

12. PSI Fees 30%

13. Architecture/ interior/ landscape design 20%

14. Rent of machineries 15%

15. Air/ Water Transport 7.5%

16. Courier Business 15%

17. Advertising Making 15%

18. Advertising Broadcasting 20%

19. Satellite fee/ Airtime/ Frequency 20%

20. Insurance Premium 10%

21. Contractor/ Sub contractor 5%

22. Survey or Oil or Gas exploration 5.25%

23. Exploration in petroleum operations 5.25%

24. Any service for making connectivity between oil or gas field and its export point

5.25%

25. Any other payments 30%

21. 52JJ Collection of tax from travel agent: Any person responsible for paying on behalf of any airlines to a resident any sum by way of commission or discount or incentive bonus or any other benefits convertible into money called by whatever name for selling tickets of an airline or for carrying cargo by air shall deduct or collect


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advance tax at the rate of zero point three zero per cent (0.30%) of the total value of the tickets of the airlines or any charge for carrying cargo by air at the time of payment to such resident.

22. Collection of tax from manufacturer of soft drink is 4% 52S

23. Collection of tax from export of certain items is 1% INSTEAD OF .80% U/S 52S.

24. Collection of tax from export of any goods except certain items is 1% INSTEAD OF .80% U/S 53BB

25. Deduction of tax from commission or remuneration paid to agent of buyer is 10% INSTEAD of 7.5% U/S 53BBBB

26. Deduction at source from interest on saving deposits and fixed deposits U/S 53F

27. Deduction of tax from advertising Bill is 4% instead of 3% U/S 53K.

28. 15% TDS imposed on Rent compensation and signing money by Real Estate Developer to

Landlord

29. Shrinkage the power of time extension: Deputy Commissioner of Taxes may extend the

date up to two months (instead of three months) from the date so specified and he may further extend the date up to two months (instead of three months) with the approval of the inspecting Joint Commissioner. U/S 75

30. Report from an accountant to be furnished- The Deputy Commissioner of Taxes may, by notice in writing, require that a person who has entered into international transaction or transactions the aggregate value of which, as recorded in the books of accounts, exceeds three crore taka during an income year shall furnish within the period as may be specified in the notice and in the form and manner as may be prescribed, a report from a Chartered Accountant or a Cost and Management Accountant regarding all or of a part of the information, documents and records furnished under section 107E.

31. Penalty for failure to comply with the provision of section 107EE- Where any person

fails to comply with the provision of section 107EE of this Ordinance, the Deputy

Commissioner of Taxes may impose upon such person a penalty not exceeding two per cent (2%) of the value of each international transaction entered into by such person. U/S 107HH.

Provided that such penalty shall not exceed-

(a) in case of an assessee, being an individual, whose income was not assessed previously five thousand taka; (b)in case of an assessee, being an individual, whose income was assessed previously, fifty per cent (50%) of the tax payable on the last assessed income or taka one thousand, whichever is higher u/s 124.

32. New provision has inserted as section129B (Penalty for furnishing fake audit report)

Where, in the course of any proceeding under this Ordinance, the Deputy Commissioner of

Taxes, the Appellate Joint Commissioner, the Commissioner (Appeals) or the Appellate Tribunal is satisfied beyond reasonable doubt that any audit report furnished by an assessee along with thereturn of income or thereafter for any income year is not signed by a chartered accountant or is believed to be false, such authority or the Tribunal, as the case may be, shall impose upon such assessee a penalty of a sum of one lakh taka for that income year.

33. Punishment for furnishing fake audit report. A person is guilty of an offence punishable with imprisonment for a term which may extend to three years, but shall not be less than three months, or with fine upto taka one lakh, or both, if hefurnishes along with the return of income or thereafter any audited statement of accounts which is false or does not conform with signature of a chartered accountant purported to be signatory to such statement(U/S 165AA)

34. Punishment for unauthorized employment.

A person is guilty of an offence punishable with imprisonment for a term which may extend to three years, but shall not be less than three months, or with fine upto taka five lakh, or both, if heemploys or allows to work any individual not being a Bangladeshi citizen without prior approval from Board of Investment or any competent authority of the government as the case may be.

35. Depreciation Rate for imported computer software is 10%.

36. Depreciation allowance for purchase of motor vehicles up to TK 25,00,000/-.

37. Approval of Obsolescence allowance for Building, Machinery, Plant and other fixed

assets.

38. Tire, Automobile, Brick building under Tunnel Klin method and Bi-cycle to be enlisted as

industrial undertaking.


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39. Income from dividend receivedfrom a company listed in any stock exchange in Bangladesh up to TK 25,000/- instead of TK 20,000/-.

40. Any income received by an assessee from Wage earners development bond, US dollar

premium bond, US dollar investment bond, Euro premium bond, Euro investment bond, Pound sterling investment bond or Pound sterling premium bond is tax free.

41. Tax holiday period of Income from software development or Nationwide Telecommunication Transmission Network (NTTN) or Information Technology enabled services (ITES) has been extended up to June, 2024.

42. Tax holiday period of income derived from the export of handicrafts has been extended up to June 2019.

43. Reduced tax rate as 15% for income derived from Textile and Jute products has been

extended up to June 2019.

44. 10% of paid up capital and undistributed profit can be utilized for purchasing motor vehicles.

45. TDS has been withdrawn from local purchase of Computer, computer accessories, Jute, and Cotton.

46. Authorize representative:

Chartered Accountant and Cost & Management Accountant of ICAEW, Scotland, London, Pakistan and India cannot be act as authorize representative u/s 174. 47. Income is Tax free for MPO listed educational institutions, public universities, ICAB,

ICMAB, ICSB. But, 10% tax on bank interest will be done which be treated as final settlement.

48. 12 Digit TIN Certificate is mandatory for guardian of English Medium & Standard School

students.

49. Capital gain tax to be treated through Lease deed and possession sale deed by other authority

except Government.

“Synopsis of VAT in the light

of Finance Bill’2015 is

upcoming”.

Compiled, Edited & Prepared by:

Md. Monzurul Karim (CMA Final) ITP; Imdadul Haque Milon ITP, S. M. Rabby ITP;

Special Credits to: Mr. Shafiqul Islam Uzzal, VAT Consultant; Kamran Yousuf, Consultant of Corporate Affairs

Reviewed by: Advaocate Jubaer


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“Taxes are what we pay for a civilized society.”

OLIVER WENDELL HOLMES, Compania General de Tabacas de Filipines v. Collector of the Internal Revenue, 1904

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finance bill 2015

Documents

minimum tax

income tax credit tax

payable tax tk

tax identification

general tax payer

women tax payer

types of tax payer

taxfree income ceiling