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Income Tax Rates:

Tax Rate for Non-Corporate Taxpayers:No change in income slabs and corresponding tax-rates in AY 2007-08

except an incentive of tax rebate for the highest tax-rate taxpayers.Types of

Assessee

Type of Income Tax Rates for AY2006-07 2007-08

Resident

individual

assessee*,non-resident

Bangladeshi,

association ofpersons, firm

and other

artificialjuridical

persons

(1) Long-term

capital gain

15% or Av. Tax Rate on total income

including capital gain, lower oneSame

(2) Accidental

income u/s 19(13)20% or ATR on total income including

accidental income, lower one

Same

(3) Other income

Total Income-Slab 2007-2008 2008-2009

On first Tk.

On next Tk.

On next Tk.On next Tk.

On balance Tk.

150,000

275,000

325,000375,000

Balance

165,000***

275,000325,000

375,000

Balance**

Nil

10%

15%20%

25%

Nil

10%

15%20%

25%

Minimum tax (Tk.) 2,000 2,000Non-company

non-resident

assessee(except any

Bangladeshi)

Total income 25% 25%

* The tax exemption benefit on remittance from abroad for resident persons

who are not citizens of Bangladesh has been withdrawn from FY 2006-07.** But 10% tax rebates on the additional tax paid by those individual

taxpayers paying tax at the highest rate of 25% disclosing more than 10%

higher income in the assessment year (AY) 2007-08.*** The exemption limit for female Assessees and senior citizens of age at least

70 years has made to Tk.1,80,000 instead of Tk.1,65,000. [FO 2008]

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Tax Rate for Corporate Taxpayers:

No change in rates prescribed by the Finance Act 2006 except the

Charge of minimum tax u/s 16CC (newly inserted).

Types ofCompany Type of Income Tax Rates for AY2006-07 2007-08

Bank*,

insurance,financial

institutions

(1) Capital gain

arising outof

- Transfer of stocks & shares of private

limited company [S.R.O. No. 220-Ain/Aykar/2004dated 13.07.2004]

10% 10%

- Transfer of other capital assets 15% 15%

(2) Dividend income 15% 15%

(3) Other

income

- Both for publicly traded and not publicly

traded company

45% 45%

Other

company**(1) Capital gain

arising outof

- Transfer of stocks & shares of private

limited company [S.R.O. No. 220-Ain/Aykar/2004dated 13.07.2004]

10% 10%

- Transfer of other capital assets 15% 15%

(2) Dividend income 15% 15%(3) Other

income

- For publicly traded company

* Dividend declared by less than 10% or

failure to pay declared dividend within

SEC stipulated time

* Other situation

40%

30%

40%

30%

- For other company 40% 40%* Under section 16C, a bank company, if shows, in the return, profit exceeding 50% of the aggregate sum of

capital and reserve, shall pay tax @ 15% of such excess profit as additional tax.** Under section 16B, a listed company other than a banking or insurance company, if has not issued, declared

or distributed dividend or bonus share equivalent to at least 15% of paid-up capital within six monthsimmediately following any income year, shall pay tax @ 5% of undistributed profit (accumulated profit

including free reserve) as additional tax.

Charge of Minimum Tax [section 16CC][Repealed by FO 2008]: Under this newly

inserted section 16CC, a company shall pay a minimum income tax of Tk. 5,000 or0.50% of turnover whichever is higher for companies irrespective of profit or loss. Here,

turnover means gross receipts from sale of goods, gross fees for rendering services or

giving benefits including commission or discounts, gross receipts from any heads of income

excluding income from capital gains and receipts from speculation business and the

companys share of amounts stated earlier of any AOP (association of persons) of which the

company is a member.

Thus, a company has to pay Tk. 5,000 or 0.50% of turnover or tax at usual rate,whichever is higher. But as per the clarification given in the Circular No. 1 (Income Tax)

dated 30.07.2006 issued by the Income Tax Policy Section of the NBR (National Board ofRevenue), this provision is applicable from AY 2006-07 and not applicable in following

cases:

1. Company enjoying Tax Holiday;2. Company having tax exemption under any S.R.O.; and

3. Income of a company on which tax deduction is applicable and the TDS (tax

deducted at source) is a final settlement of tax liability as per section 82C.

Special Reduced Corporate Tax Rates:

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Agro-processing, jute and textile industries: Existing benefit of tax exemption and rebate

up to 30 June 2006 extended till 30 June 2008 [S.R.O. No. 166-Ain/Aykar/2006, S.R.O.

No. 168-Ain/Aykar/2006, and S.R.O. No. 169-Ain/Aykar/2006 dated 06.07.2006]. Past

provisions were:

- Agro-processing industries tax-exempted since 1-7-2002 (initially up to 30-6-2005,

then extended in 2003 up to 30-6-2006).

- Textile industries were subject to reduced tax rate of 20% for income year 2003-2004and 15% for income years 2004-2005 and 2005-2006.

- Jute industries were subject to reduced tax rate of 15% for income years 2004-2005

and 2005-2006.

New sector subject to reduced rate: Diamond cutting and polishing industry to be

taxed @ 15% [S.R.O. No. 174-Ain/Aykar/2006 dated 06.07.2006].

Tax Rate for Local Authority: No change in tax rates.

Type of Income Tax Rates for AY

2006-07 2007-08

(1) Long-term capital gain 15% or Average Tax Rate (ATR) on total income

including capital gain, lower one

Same

(2) Dividend income 15% 15%(3) Other income 40% 40%

Other Tax Rates for Special Tax Treatment:

Increase in tax rates on initial investment in House, Land, and Motor Vehicle out of

undisclosed income by the Finance Act 2006 [Sections 19B, 19BB and 19BBB

amended]:

Special tax treatment regarding investment in house property building/ apartment

at a higher rate for selected posh areas [sec. 19B amended]: Tax rates for posh

residential and commercial areas of Dhaka and Chittagong have been increased [effective

from 1 July 2006 for tax payment irrespective of the period of investment].

Location of building or

apartment

Plinth area in

square meter(smt)

Previous Rate New Rate

Posh residential and

commercial areas of Dhaka

and Chittagong*

Up to 200 smt Tk. 200 per smt Tk. 300 per smt

Above 200 smt Tk. 300 per smt Tk. 500 per smt

Other area Up to 200 smt Tk. 200 per smt Tk. 200 per smt

Above 200 smt Tk. 300 per smt Tk. 300 per smt* Prescribed posh residential and commercial areas: Gulshan Model Town, Banani,

Baridhara, Defence Officers Housing Society (DOHS), Dhanmondi Residential Area,

Bashundhara Residential Area, Dhaka Cantonment, Motijheel Commercial Area,

Dilkhusha Commercial Area, Kawran Bazar Commercial Area of Dhaka and KhulshiResidential Area, Panchlaish Residential Area of Chittagong.

Special tax treatment regarding investment in land property increased [sec. 19BB

amended]: Tax rate of 5% has been increased to 7.5% irrespective of the location of theland (previously it was for land situated in city corporation or pourashava or cantonment

board) [effective from 1 July 2006 for tax payment irrespective of the period of

investment].

Special tax treatment regarding investment in motor vehicle doubled [sec. 19BBB

amended]: Tax rate has been doubled and due to repeal ofproviso (under which the tax

was applicable for first time registration in Bangladesh), this tax will be collected at the

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time of any registration of new or old car [effective from 1 July 2006 for tax payment

irrespective of the period of investment].

Capacity of the motor

vehicle

Previous Rate New Rate

Up to 1500 c.c. 5% of purchase value 10% of purchase value

Above 1500 c.c. 7.5% of purchase value 15% of purchase value