MD ASADUZ ZAMAN

The proposed budget offers modest relief to low-income groups, while businesses and domestic industries can breathe easier as they have been spared major tax hikes.

Although high-income individuals are not facing any immediate rise in personal income tax, the middle-income segment is likely to bear a greater share of the fiscal burden.

Meanwhile, holders of black money have been given an opportunity to legalise undisclosed income through property transactions without scrutiny of the funds’ origin.

The tax-free income threshold has been raised to Tk 3.75 lakh in line with the previous interim administration’s prospective tax regime.

At the same time, the tax rate on the first taxable slab has been doubled to 10 percent from 5 percent. However, the minimum tax of Tk 3,000-5,000 remains unchanged.

In effect, the higher threshold offers relief to lower-income taxpayers, but the steeper entry-level rate shifts part of the burden onto middle-income earners, particularly those whose incomes are marginally above the exemption threshold.

WIDENING THE TAX NET

The government has announced several compulsory compliance measures to widen the tax net, with a particular focus on salaried individuals and small traders.

From the next fiscal year, a Taxpayer Identification Number (TIN) certificate will be mandatory for opening a bank account, while VAT registration and possession of a Business Identification Number will be mandatory for opening a business account at any bank.

The NBR’s database will be linked with the National Identity Card database, banks, utility service providers, and sub-registry offices. A new Withholder’s Identification Number has been introduced to strengthen the withholding tax system (tax deducted at source). TIN will also be mandatory for registering motorcycles with engine capacities of 150cc and above.

To bring small retailers under the formal tax net, the budget proposes Advance Income Tax at 0.20 percent on goods supplied to retailers, equivalent to Tk 2 per Tk 1,000 of goods.

Economists and business leaders warn that many small retailers may be unable or unwilling

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