No surcharge for net wealth up to Tk 2.25cr

People owning up to Tk 2.25 crore are likely to get a waiver from surcharges on their wealth next fiscal year, as the government finally caves in to the demand of FBCCI and other trade bodies.

At present, a 10 percent surcharge is applicable to a person with net wealth between Tk 2 crore and Tk 2.25 crore. The other slabs of wealth surcharges are likely to remain unchanged, said an official of the finance ministry.

The government is also likely to reduce the tax on the purchase of residential buildings and apartments in municipalties and semi-urban areas through undeclared incomes.

At present, taxmen allow unquestioned investments of undisclosed money for purchase of flats and apartments upon payment of a certain amount of tax.

The government is also likely to withdraw the 5 percent advance income tax on interest earnings from bonds and treasury bills to boost the secondary bond market, said the finance ministry official.

Currently, the authorities deduct 5 percent tax from primary dealers on the interest earnings from government bonds and bills.

The tax is collected prior to the maturity of the securities, an exercise that the bankers oppose as the ultimate burden of the tax falls on the primary dealers and not on the holders of bonds or bills.

The withdrawal of the tax upfront on the interest will clear 20 primary dealer banks from the burden. 

Anis A Khan, chairman of Primary Dealers Bangladesh Ltd (PDBL), said the upfront tax should be withdrawn. The imposition of the tax has acted as a damper on the development of the secondary market for government securities, said Khan, also the managing director of Mutual Trust Bank.

Currently, 221 treasury bonds with market capitalisation of Tk 548,59.2 crore are listed on the Dhaka Stock Exchange. But the secondary market for the government bonds remains inactive, according to data.

The tax rate for foreigners who stay for a short period to provide various services is also likely to be rationalised depending on their profession and the amount of income they earn in Bangladesh.

At present, foreigners who are treated as non-resident in tax laws have to pay a 30 percent tax on their incomes.