Tax subsidy costs nation Tk 1.78 lakh crore in FY23

The total amount of tax subsidies given in the form of rebates, discounts, exemptions, and reduced rates has been calculated to be at Tk 1,78,241 crore in the outgoing fiscal year 2022-23.

The amount, which is referred to as the direct tax expenditure, is up more than 41 percent from Tk 1,25,813 crore in FY21, which accounted for 3.56 percent of the gross domestic product.

The data was revealed as the National Board of Revenue, for the first time, estimated the expenditure based on the analysis of field-level data.

Direct tax expenditure is a form of tax subsidy that includes rebates, discounts, exemptions, reduced rates of taxation and exclusion of income from computing total taxable income.

That means if this subsidy was collected as tax, it would be added to the total tax collected and the amount of tax would increase.

According to the government, direct tax expenditure creates employment along with economic stimulation, social balance and industrial support.

Of the direct tax expenditure in FY21, Tk 85,314 crore was given at the corporate level and Tk 40,499 crore at the individual level.