final tax slide

Welcome To OurPresentation..

Heartiest gratitude for…

Taher JamilLecturer

Department of FinanceFaculty of Business Studies

University of Dhaka

A team performance by….

Parbon Acharjee20-212

M.Q.M. Siddiqui Proshun20-202

Al - Faysal Bin Amin Tasik20-168

Mohammad Atikur Rahman20-100

Mobassira Fabiha Haque20-024

Pre-Budget Discussion and its Reflection in

National Budget 2015-2016

objective of the Presentation….

Comparing the Pre-Budget Discussions and their Implementations….

Now Presenting….

Mobassira Fabiha Haque20-024

1. Tax receipts collected by the National Board of Revenue will rise to around Tk 9.0 billion once the government goes back to its previous rate at 0.8%.

2. Finance Minister said that currently the prices of 25 non-filter and 20 filter bidis were Tk6.14 and Tk6.92 respectively, and, because of their low prices, most tobacco users smoked this product and became vulnerable to health risks.

3. He also proposed for increasing the corporation tax on publicly-traded tobacco companies from 40% to 45%.

4. Spending more on health, education and social sectors as share of GDP, alongside suggesting a clear statement of expenditure reforms for the 7th five-year plan.

Discussion with PRI heads…

Implementation in Budget( Tobacco and health, education sector)… Currently the price of 25 sticks of non-filter and 20 sticks of filter bidi stands at

Tk. 6.14 and Tk. 6.92 respectively. And the minister declared it to be Tk. 7.06 and Tk. 7.98 respectively from now on.

The finance minister declared a uniform tax rate of 45% for all cigarette manufacturing entities viz. private limited, public limited or publicly traded company and for taxpayers including individual and partnership firm etc.

The budgetary allocation for education and technology declined by 1.5% point and proposed at 11.6% of the total budget outlay in the FY 2015-16 compared to 13.1% in the FY 2014-15.

Allocation for health also declined by 0.1% point from 4.4% of the total budget in the FY 2014-15 to 4.3% in the FY 2015-16.

Meeting between Finance Minister and BIDS Heads…

A large amount of revenue’s arrival can be ensured if the existing tax at source on export receipts is fixed at 0.8% from the existing 0.3%.

The capacity for implementing donor-funded project still remained low in spite of increasing much. Relating with the fact Finance Minister dragged the topic of aid lying in the pipeline being more than worth US$20 billion whereas we can use just more than $4.0 billion a year.

Discussion between Finance Minister and BIA officials…

They demanded is for cutting the tax rate to 15% in the next budget

They also demanded withdrawal of existing 5% gain tax on the profit of their deposits

The BIA leaders also demanded to re-fix the tax rate similar to the tax free income ceiling for individual taxpayers at Tk 220,000.

Meeting among Finance Minister and FBCCI Officials…

Local farmers are not getting fair prices in terms of their production because of oversupply; but a lot of rice is being imported.

The GDP growth to be the highest in the tenure of his government, which has been ruling the country since 2009 as per Mr. Muhith. And the government is hoping to move out of the 6% growth regime next fiscal year.

The country has been unable to raise the GDP growth rate to 7 to 8% because of low investment, high bank interest rates and shortages of gas, power and land for industries.

The planned budget size of Tk 3 lakh crore to be big enough given the needs of the country.

Now Presenting…

Parbon Acharjee20-212

MEETING WITH MCCI….

Metropolitan Chamber of Commerce and Industry (MCCI), a powerful trade body voiced the business community's urge for the government to frame an appropriate responsive budget for the fiscal year (FY) 2015 -16 to help them recoup the losses they have suffered due to the ongoing political violence.

The MCCI President, Mr. Manzur’s proposal includes:

Increasing the limit of tax -free ceiling for individual taxpayers;



Setting the maximum tax rate at 25% by trimming it from the existing 30%, and;



Setting the maximum tax rate at 25% by trimming it from the existing 30%, and;

Cut in advance income tax by 2.0%.

President of BWCCI Selima Ahmad sought for…

Recognition for women taxpayers;



Cut in VAT on imparting training to women entrepreneurs;




Raise in tax -free limit for individual women entrepreneurs to Tk 350,000;





Allow them to carry products worth minimum Tk 500,000 to international trade fairs etc.;





Allow them to carry products worth minimum Tk 500,000 to international trade fairs etc.;

A flat rate of 4.0% VAT for all women entrepreneurs.

On Energy…The government has said in the proposed budget for 2015- 2016 that it needs to finalize programs within 2015 for the installation of power plants in the

country, making coal the prime fuel for the plants.

The government targets to secure distribution of 80% of generated power to the customers by 2018. The government's vision statement for 2021 targets electricity for all which will require installation of additional 10,000km transmission and 1,50,000km distribution lines in the country.

On Apparel Sector… Deduction of 0.3% source tax on CM

against FoB and 10 income tax till 2019.



Continuation of the 0.30% source tax till next 5 years and 10% income tax till 2019.




Increasing the cash support to 8.0%.




Increasing the cash support to 8.0%.

Duty- free import of fire proof color coating for pre-fabricated building materials and other energy saving equipment like LED bulb and tube light to help ensure a safe and environment-friendly industry.

But in the budget… The finance minister proposed increasing source tax to 1.0% for

the next fiscal year (FY) 2015 -16. After paying all taxes, a factory's profit margin lies between

2 % and 3% if there is no obstacle like political turmoil whereas tax at source has been fixed at 1%.

A factory, on an average, needs to pay Tk 50 million to meet structural, fire and electrical safety requirements in line with the requirements of Accord and Alliance.

If the government re fixes source tax at 0.30% , they promise that they will create more employment scopes and help Bangladesh achieve a middle income country

He, however, criticized the proposal to impose 1% duty on import of capital machinery for the apparel industry, saying that it would discourage expansion and diversification and slow down productivity.

Now Presenting….

Al-Faysal Bin Amin Tasik20-168

REHAB sector…

Demands placed before Chairman of National Board of Revenue (NBR) at a pre-budget meeting on 2nd April,2015 include:

Allowing investors to invest their “Undisclosed’ money earned “Legally” in the housing sector.

Slashing gain tax, stamp fee and VAT by 50%.

Halving taxes payable by the developers according to the provision of Income Tax Ordinance section 1984/53 FF.

Re-fixation of taxes against the lands outside of the RAJUK and CDA areas from the 4% and 3% to 2% and 1%.

But in the Budget….

In the Budget presented by Honorable Finance Minister AMA Muhith for the FY 2015-2016, for building construction sector, instead of the existing VAT rate of 3%, imposition of VAT at the rate of 1.5% for flats having floor space up to 1100 sq. feet, at the rate of 2.5% for flats having floor space between 1101 sq. feet and 1600 sq. feet, and at the rate of 4.5% for flats having floor space of more than 1600 sq. feet is allocated.

If the import duty is reduced then it would also reduce pressure on fuel and energy, especially gas, which could be used for the industrial production. Setting depreciation facilities at 25% for one-year old reconditioned cars, 35% for two-year old, 45% for three-year old, 50% for five-year old and 55% for more than five-year old cars.

Withdrawal of the 30% supplementary tax on micro-bus importsAs the revenue collection target in this year’s budget is indeed ambitious and since it is 30.62% higher than that of the current financial year (2014-15), no reduction of import duty on hybrid cars are considered.

Hybrid Car Sector…

Tea sector:

Bangladesh Cha Sangsad proposed imposing a higher import duty on tea imports for the sake of local producers before the Chairman of NBR on 2nd April, 2015.President of Bangladesh Cha Sangsad Ardashir Kabir said that the production of tea is increased by 187% to 200% and if the import of tea is allowed at a lower duty then it would make it difficult for the sector to survive.

**This year’s budget agreed to their proposal. To protect the fair interest of our local tea growers, our Honorable Finance minister AMA Muhith proposes to increase the supplementary duty on tea imports from 15% to 20%.

Tea sector…

Now Presenting….

M.Q.M. Siddiqui Proshun20-202

Discussion between BSOA and NBR… Due to political uncertainties Number of

Supermarkets has gone down from 105 to 96.

Supermarket owners pay 70% more tax tan those by the departmental stores.

2% VAT is applicable for superstores where Departmental stores enjoy VAT in package rate ranging from Tk. 3000 to Tk. 12000.

Asked NBR to reduce duties on Capital machines like Refrigerator, Electronic shelves etc.

Supermarket Owners pay the highest duty of 107.35% on cooling products like Vegetable freezer, Fruit Freezer etc.

Discussion between Bcwma and NBR..

A meeting held on 22nd April BCWMA demanded: Complete removal of the

Supplementary Duty on locally made ceramic tiles

Reduction of 15% VAT and 15% SD on local manufacturing of tiles.

Requested NBR to completely withdraw any Regulatory Duty and Supplementary Duty from essential machinery and parts.

They also demanded a rise of SD on Imported tiles, Sanitary-ware and table-ware products.

Discussion between AMTOB and NBR..

Requested NBR to eliminate the fix tax of tk. 300 on SIM cards.

They called for a uniform tax rate of 30% for the listed operators and 35% for the non-listed operators.

Urged to reduce tax on internet modem import and demanded 15% VAT over mobile internet service.

They also demanded a harmonize customs duty on telecom equipments.

Discussion between ICT and Finance Minister…

In a meeting on 12th April the ICT sector demanded the following to the Finance Minister:

withdrawal of VAT from all sorts of e-commerce products for 3-5 years

withdrawal of 4.5% VAT from the ICT sector

demanded on imposing high amount of tax on imported operating system.

they have sought over Tk2,237 crore for building a digital Bangladesh by 2021.

demanded Budget facilities for the next 10 years.

Now Presenting….

Mohammad Atikur Rahman20-100

Discussion between DCCI and NBR..

DCCI has urged the NBR to raise the tax free limit of the

wealth surcharge at Tk 4 crore from the existing Tk 2

crore from the upcoming budget.

The DCCI has requested NBR to reduce the corporate tax

rate for the merchant banks from existing 37.5% to 35%,

listed companies from 37.5% to 35%, and for brokerage

operations at 30% from the existing 35%.

For the individual taxpayers, the chamber recommended the

tax-free income limit at Tk 2.75 lakh from existing Tk 2.20

lakh while it has advised the board to finalize the limit for

women and elderly persons from Tk 2.75 lakh to Tk4 lakh

for physically disabled persons from Tk 3.5 lakh to Tk4

lakh, and for freedom fighters Tk4 lakh to Tk4.5 lakh.

Exporters except RMG…The leaders of business association made some appeals at a pre-budget discussion with NBR chairman Md Nojibur Rahman:

They claim .30% tax at source for all export sectors.

Demanded withdrawal of 5% tax on cash incentive provided by the government to boost exports.

As frozen foods are 100% agro-based products having no relation with import, but the sector have to pay .60% tax at source over export value while RMG sector pay .30% tax.so they want the equality in all sectors.

Bangladesh Textile Mills Association (BTMA) President Tapan Choudhury urged the government to allow duty-free import of Busbar Trunking System.

Foreign investors… They urged NBR to reduce corporate tax at 30% from the existing

35% for non-publicly traded company, and the rate for Mobile phone

operator (non-listed) should be reduced at 32.5% from the existing

45%.

Ms.Rupali managing director of Berger Paints Limited proposed to

withdraw supplementary duty for local companies from the upcoming

budget which will be come into effect from 2016.

Reduction of advance income tax to 2% from 5% for industrial

companies and cancellation of tax deduction not admissible for excess

prerequisites, normal depreciation rate at 50% to be allowed for any

software.

Cancellation of the provision for making companies liable to pay

minimum .30% on gross receipts.

Tourism sector…

Tour Operators’ association of Bangladesh (TOAB)

president Dr Akbar Uddin Ahmed urged the NBR to

make the import of tourist buses duty-free.

TOAB president also sought seven-year tax holiday

for the sector.

Khabiruddin Ahmed of Tourism Resort Industries

Association of Bangladesh (TRIAB) demanded the NBR

exempt VAT and provide duty-waiver for the resort in

rural areas for next few years.

He also demanded resorts in rural areas should be

kept out of income tax net for the two years to

develop the sector.

Implementation in budget… In the National Budget for 2015-16, the civil aviation and

tourism sector has received an allocation of Tk 372

crore against total budget size of Tk 2,95,100 crore.

The allocation of Tk 372 crore is Tk 225 crore more

than the revised budget of 2014-15 fiscal year that was

Tk 147 crore.

Of the total Tk 372 crore, Tk 329 crore is proposed to

be spent under the Annual Development Programme

(ADP) and Tk 43 crore under non-development sector.

Any query?

Thank You!

final tax slide

Documents

existing tax

tax receipts

tax rate similar

uniform tax rate

fact finance minister

budget tobacco

gain tax

corporation tax