The proposed Income Tax Act includes 43 service receivers to submit proof of tax filing and if the taxable income does not exceed the tax-free threshold, they have to pay a minimum tax of Tk 2,000.

Not all of the service receivers from the 43 list but a few individuals shall have to bear the tax burden like mobile banking agents or mobile recharge agents receiving commission, sellers of products or services on digital platforms, and goods or service suppliers to specified persons.

Students and unemployed young people who are doing seasonal business using the Facebook platform shall now pay this minimum tax. Even an office staff irrespective of his salary shall be included in this bracket as he will receive income from a company.

And one trick included in the act: withholding tax from all the interest income has been included under minimum tax so that any tax paid on interest income can't be adjusted with the minimum tax in the following years.

Most withholding taxes are included with the minimum tax and if your normal tax is below the withholding tax, the tax already paid at source shall be considered as tax liability.

The ultimate sufferer of the minimum tax is the low and lower-middle-income earners because the withholding taxes are mostly above the normal tax and they do not get the window to absorb the full tax paid at source.

The higher income earners will see no impact due to the minimum tax and in some cases, they will enjoy the benefit of the final settlement tax like tax paid on savings certificate which is part of the minimum tax.

The higher income earners will also enjoy the tax offset benefit under the tax rebate on investment allowance. All of the people from low to high income, can enjoy this tax credit benefit. In this case also, low and middle-income earners can't enjoy the benefit because their tax liability goes down to the negative or sometimes below the minimum tax and therefore, the rebate does not give the benefit to this group of people.

In Australia, tax offset facilities are provided to the low and middle-income people and also provided to the taxpayers living in particular regions.

You may say that these facilities are also available in our country. Yes, but there is a huge basic difference.

In Australia, taxpayers irrespective of income calculate the tax liability using the slab-wise tax rates, and then the low and middle-income tax offset amount and regional tax offset amount are deducted from the tax liability. After doing that, if the tax liability is zero or negative, no tax shall be payable. There is no tax offset for taxpayers whose income is above a certain limit.

There is no minimum tax option here and if any tax is deducted at source from the taxpayer who will have to pay no tax, the deductible amount is paid directly to the taxpayer's bank account within a few days after filing the tax return.

But in Bangladesh, if your tax is zero or negative, you are required to pay minimum tax based on your location. And in some instances, if the withholding tax is more than the required minimum tax, the withholding tax is the tax liability. There is no refund or adjustment for the next years. This is the main difference.

Jasim Uddin Rasel is the author of Smart Money Hacks