Some special fiscal measures in new budget

The new budget includes some special fiscal measures to encourage entrepreneurs to create more jobs, expand the formal economy and the tax net, and for social inclusion of transgender people.

"The present government is relentlessly working to integrate the marginal and underprivileged population into the mainstream society and economy," Finance Minister AHM Mustafa Kamal said while placing the budget proposal in Parliament on Thursday.

He said the third gender (transgender) community belongs to the marginal and underprivileged section of the society and compared to others, they lag behind in socio-economic standards.

For their social inclusion, the new budget has proposed a tax rebate for employers who will employ 10% of their total workforce or more than 100 workers from the transgender community.The rebate will be 75% of the total salary paid to third gender workers or 5% of payable tax, whichever is lower.

The government also set Tk350,000as the tax-free ceiling for this community in line with individual female taxpayers' existing tax rate.

Shale Ahmed, executive director of Bandhu Social Welfare Society, a non-government organisation working for the transgender community since 1996, said it will be a milestone to move forward by ensuring social inclusion of the transgender community.

If the government gives a tax waiver for employing transgender people, that may help remove the social stigma and create a positive mindset about them, he added.

Reduced tax rate for OPC

The new budget offeredspecial tax exemptions for one-person companies (OPC) through a 25% cut in corporate tax. Their current tax rate is 32.5% as non-listed private companies formed under the Companies Act.

On 18 November 2020, Parliament passed the Companies (Second Amendment) Bill 2020 with a provision for forming single-person companies.

The new rule was made to attract greater investment, do better in the easeofdoing business ranking, and formalise informal businesses.

According to the bill, a single-person company has to have a minimum paid-up capital of Tk25 lakh and a maximum of Tk5 crore.The minimum turnover of such a company in the immediate past year will have to be between Tk1 crore and Tk50 crore.

If the paid-up capital and turnover exceed the amount, the company can transform into a private limited company or in some cases, into a public limited company.

No waiver for black money whitening

In response to business leaders' demand to withdraw the special provision for whitening black money by paying minimal tax, the facility has not been extended in the new budget.  

The current fiscal year's budget includes the facility to invest untaxed money in the capital market, savings certificates, and bonds or any other securities by paying a flat 10% tax within 30 days of investment without any penalty.

High tax on electric vehicle registrationto end

The government proposed introducing a new measure to make realising advance income tax from registrations of electric vehicles easierwhile its owners currently have to pay the highest rate of this tax to obtain the Bangladesh Road Transport Authority (BRTA) registration.

In the wake of the growing popularity of such vehicles, the National Board of Revenue (NBR) has proposed bringing an amendment to Section 68B of the income tax ordinance 1984 to clarify electric car tax measures, said finance ministry sources. 

In the existing finance act, advance income tax rates are set according to vehicles' engine capacities, known as cc (cubic centimetre), but electric vehicles do not have any engine and their motor capacity is measured in kilowatt.

NBR officials said the new measure would bring electric vehicles under the tax net through easy calculations. The revenue board has proposed a new evaluation measure for electric vehicles, which may consider 20cc the equivalent of 1kw. 

Tax exemptions for Made in Bangladesh to promote heavy industries

The government is highly focused to promote the Made in Bangladesh brand to accelerate the establishment of mega industries and production of import-substitute industrial goods in the country. 

The three- and four-wheeler vehicle manufacturing industry will get a 20-year tax holiday on certain conditions.

10-year tax break for hospitals set up outside 4 major districts

The government is mulling a 10-year tax break for investments in setting up specialised hospitals with a view to ensuring quality healthcare services at an affordable cost.

To get the tax facility, investors have to construct either a 200-bed specialised hospital or a 250-bed general hospital with children and neonates, women and maternal health, oncology, and well-being and preventive medicine units.

Every hospital must have at least 5% ICU beds and this investment will have to be made outside Dhaka, Chattogram, Gazipur, and Narayanganj.