No ray of hope for taxpayers
While the cost of living remains high, with the inflation rate hovering at over 9 percent throughout the year, no ray of hope came for the common people in the budget declared yesterday. This is upsetting for the low and middle-income groups of society.
Individual taxpayers expected the budget to reduce their tax burden, but the minimum tax-free limit remains the same as that of last year. Moreover, one must pay a minimum tax of Tk 5,000. What can the government do to ease the high inflationary pressure?
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On May 14, Treasurer Jim Chalmers in Australia also presented the budget for fiscal year 2024-25. The cost of living is also high there and the first priority was to reduce living expenses. In every interview, Jim repeatedly said only one word, "responsible".
He said it is the responsibility of his government to reduce living costs. Australia reduced tax rates, provided subsidies for utility bills to every Australian household, reduced education loans interest etc. But what are the steps in our budget to give comfort to our people?
The corporate tax rate has been reduced by 2.5 percent. For this, publicly traded companies and non-publicly traded companies will pay tax at 22.5 and 27.5 percent respectively. But is there any ultimate benefit that will be enjoyed by the corporate taxpayers?
The income tax act stipulates that a minimum tax be paid on gross receipts or cash revenue irrespective of a profit or loss.
Every year there is a demand to reduce the corporate tax rate like in other countries. But the focus is never on the real point – to set the withholding tax in consideration with reality.
This year the IT sector was scheduled to see an end to their tax exemption, but they got an extension for three years on condition that all their transactions are cashless. Will it be possible for them to avail it?
A majority of transactions can be run through electronic systems. But is it possible to maintain a 100 percent cashless society?
Think about office maintenance, conveyance and day to day expenses, which we call petty cash. This should have been considered.
The last point is that all taxpayers, individuals as well as corporate taxpayers, must submit tax returns under a universal self-assessment method.
This is okay for individual taxpayers but not suitable for organisations at this moment as our tax administration system must become fairer. Due to this proposed change, the cost of companies in tax filing will be increased.
First the company must file a tax return under the universal self-assessment method and then must obtain a tax clearance certificate from the deputy commissioner of taxes and for this service, the company must pay fees to a tax consultant.
And again, when the taxmen will issue a notice to assess the tax, then again the company shall have to appoint a tax consultant to complete the tax assessment. This will cost both time and money.
The writer is the author of Smart Money Hacks.
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