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Paper presented by:

Ranjan Kumar Bhowmik ro'ao

Member
National Board of Revenue

PRESENTATION OUTLINES

lntroduction
Principles of good tax system
Cannons of Taxation
Direct tax Vs. lndirect tax
Legacy of lncome Tax law
Bangladesh tax structure
Present tax rate
Reduced tax rate with SRO reference
Tax reforms
 t0lsl2020

Introduction
"Taxes are dues that we pay for the privileges of membership in an
organized society." 'Iax is a compulsory payment made to the
Government fbr services it provides us, though people may not be
completely satisfied or convinced with these services.

Income tax, as we all know, is a tax on income. VAT is also

different from income tax in so far as in VAI, the incidence can be
shifted but income tax is an ultimate burden.

Income tax is an annual tax in the sense it is assessed on the income

year basis. Income tax is a one stage tax and an income once taxed

lw ,e,'tax|i$ equitable and progressive. Its moral, ethical and legal

Saril$.ii str $ger thpn those of indirect tax.

Principles of sood tax svstem

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 L0/sl2o2o

Canons of Taxation

Canons of Taxation are the main basic principles/rules set

to build a'Good Thx System'.

Adam Smith gave following four important canons of

taxation, they are:
) Canon of Equity
) Canon of Certainty
F Canon of Convenience
,r,,F Canon of Economy

tc,

Canons of Taxation
) Canon of Equity: Every person should pay to the government
depending upon his ability to pay.
) Canon of Certainty: The tax which an individual has to pay should
be certain, not arbitrary. The tax payer should know in advance how
much tax he has to pay, at what time he has to pay the tax, and in what
form the tax is to be paid to the governmen

) Canon of Convenience: The mode and timing of tax payment should

be as far as possible, convenient to the tax payers. For example, land
revenue is coilected at time of harvest, income tax is deducted at
source at the time of payment.

F Canon of Economy: This principle states that there should be

',':'geonornl in ta.x administration. The maximum part of tax collection
should be brought to the govemment ffeasury.
 1.olsl2o2o

Meaning Direct taxes are the taxes in which lndirect taxes are such type of
the incidence and imPact falls on taxes where incidence and imPact
the sa me Person,/assessee. fall on two different Persons.
Nature of tax Direct tax is progressive in nature. lndirect ta\es are regressive in
natu re.

Taxable event At the tlme of earning income. Pu rchase/sa les/ manufacture of

goods and/or rcndering services

Levy Direct tax is levied and collected lndirect tax is levied and collected
from the assessee from the consumer but Paid/
deposited to the national
exchequer by the assessee/dealer.

Shifting of Tax burden is directlY borne bY the Tax burden is shifted to the
burden assessee. Accordingly the burden subsequent/Llltimate user
cannot be shifted.
Tax collection Tax is usually collected after the At the time of sale or PUrchase or
income, for a year, is earned. rendering of services
(z)
\-/

LEGACY OF INCOME TAX LAW

 1.0/s/2020

Bangladesh Tax Structure:

The tax structure of Bangladesh consists of both direct tax

(income tax, gift tax, foreign travel tax, land development tax,
non-judicial stamp, registration, immovable property tax, motor
vehicle tax etc.)
and

Indirect tax (customs duty, excise duty, narcotics and liquor

duty, VAI, Turnover tax, SD, etc.). Analysis of revenue
collection activities in Bangladesh reveals that tax revenue
accounts for roughly 85%o of total government revenue.

1. Tax Tk. 1,03,945 crore (3 1.50%)

2. VAT Tk. 1,25,162 crore (37.93%)

3. Import and other Duty Tk. 43,078 crore (13'05%)
4. SD Tk. 57,815 crore (.77 .52o/o)
TotalTk. 3,30,000
crore
 tols/2020

Tcx ratc f*r thc ffis$*s$t:l#nt y*ffir: ?*?*-*i-

lncome slab Rate Minimum tax

On the 1't Tk. 3,00,000/- of total income Nit After rebate, minimum tax for individual taxpayer are:
[For woman & senior citizen threshoJd Iimit is Tk.3,50'000]
1)Tk.5,000/ in case ot Dhaka & Chittagong City
Corporation area.
On the next Tk. 1,00,000/- of total income 5%
2) Tk.4,000/ for other city corporation area.

On the next Tk. 1,00,000/- of total income 70% 3)Tk.3,000/ for other areas if total income exceeds

on the next Tk. 4,oo,o00l- of total income

the minimum taxable ceiling.
\
LS%
\ JT
on the next Tk. 5,00,000/- of total income 20% ffi
I submit 1'r time return at ufl!rnt
On the balance of total income z5% I rysleil,. they will get a tax
L concession of Tk. 2,000/-

jt
IJ-] The threshold lim for woman a nd senior citizen ageing 65
years or a bove is Tk.3'50,000/
[2] For physically handicapped persons Tk. 4,50,000/
[3] For gazetted war-wounded freedom fighter is Tk.4'75'000.
i+i fnresnotOtirnitincaseof parentsorlegal guardianofanypersonwithdisabilitywill
be50,000takamore. lf
halh fathcr en.l mother are assessee then anv one will avail this benefit"

Rate of surcharge for the assessment year 2O2A-ZL

Net wealth exceeding Taka 3 crore but not exceeding Taka 5 crore;
or Minimum surcharge Tk.3,000 uP
Ownership of 2 motor cars to net wealth Tk.10 crore but if to%
or exceeds Tk.10 crore then Tk.5,000
Ownership of HP having an aggregate area
of 8,000 sft in a city corporation area
Net wealth exceeding Taka 5 crore but not exceeding Taka 10 crore 75%

Net wealth exceeding Taka 10 crore but not exceeding Taka 15 crore 2Ao/o

Net wealth exceeding Taka 15 crore but not exceeding Taka 20 crore 25%

Net wealth exceeding Taka 20 crore 3Oo/o

0.10% of net
Net wealth of TK. 50 crore or more wealth or
30% of tax
whichever is
higher
 Lo/s/2020

COMPANY TAX RATE [ASSESSMENT YEAR:2O2O-2L\

Classes of Thxpayers Thx rate

l.Listed companies 25%

2.Non listed cornpanies & AOP 32.5%

3.Listed Bank, insurance & NBFI 37.5%

3.Non-listed Bank, insurance & NBFI 40%

4.Merchant Bank 37 -5o/o

5,Mobile phone > 40% for GP

> 45% for other
than GP
45o/o
9.1'obacco man u I'act uri ng com pany/ fi rm/i ndi v id ual +
2.5% income
surcharge

SOME SPECIAL REDUCED TAX RATES

Sectors TAX RATES SRO

Rl.ilc export ro.k /12% SROno 255dated OL/E/?OU

Textile 15o/o sRo no 193 dated 30/6/2045

Jute manufacturing tav. SRO no 258 dated 70/8/2016

& &
export qPn nd ,Oq .latad )q/6/)o.16

autonomous bodies 25o/a sRo no 158 dared26/612074

Private University- 15% SRO no X5$ dated 2A/q2ggt

Poultry up to Tk.2O lac=nil, nextTk. 10 lac=@S% sRo no 254 Dated L6/8/2OL5

and on rest @10%
Fisheries up to Tk.10 lac-nil, next Tk. 10 lac=@S% sRo no 255 Daled t6/8/2O15
and on rest @10%
Cattle fa rm ing, horticu lture, up to Tk.10 lac-3%, next Tk- 20 lac=@loyo SRO no 199 Dated30/6/2015
m ushroom, loriculture,
f and on rest@15%
oelleted feed oroduction etc

t4

4
 1,0/5/2020

Tax Reforms:
Some recent tax refortns are mentioned below:
(a) lntroduction of e-TlN:
Formerly each tax payer had a local registration number called GIR (General lndex
Register) number. ln 1994 nationwide unique 10 digit TIN (Tax payers ldentification
number) has been introduced. Presently electronic 12 digit TIN has been introduced
by the NBR replacing the old 10 digit TlN.
(b) Expansion of withholdinq tax:
Provisionally withholding tax was levied on salary and contractors/suppliers. To
increase the tax network it was gradually expanded. Now withholding tax is imposed
on 52 items. Major items include, contractors/supplies, importer, salary, bank deposit
etc.
(c) Simplification of tax assessment:
Universal self assessment system has been widened and expanded. At present all
categories of assessees are entitled to submit return under universal self
c aanantcrl
I"lowsveilithsie iq:b ,system of po$t audit.
{d} !&
,Ihe tystert,of return fiting has been introduced on'lsr Novembe(2016 and by
so doing ,Aif categoiles of assessee now 6an easily submit their tax return thrg
online" '
6

END OF PRHSENTATION!!

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