The government has relieved additional tax burden on exporters' cash incentives, income of savings certificates and fixed deposits and savings deposits, according to the finance ministry officials.
The National Board of Revenue (NBR) issued a gazette on the issue on Wednesday evening.
Earlier, Finance Minister AHM Mustafa Kamal approved a summary in this regard.
However, additional taxes on top of a 10% source tax on income from land acquisition compensation paid by the government, income from sales of land and income from signing money will remain the same as mentioned in the new income tax law.
The new income tax law has increased these taxes up to 27.50% from a 10% minimum tax at sources. Earlier, these six types of deducted source tax were considered as a minimum tax and final settlement.
Under the previous law, exporters had to pay a 10% source tax on their cash incentive, which was treated as the minimum tax and a final settlement. But the new law does not mention anything about the final settlement, a high official of the National Board of Revenue (NBR) told The Business Standard, requesting anonymity.
Siddiqur Rahman, former president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) told The Business Standard that any tax on cash incentives is not acceptable.
The government provides this subsidiary as financial assistance for those who need support to compete in international markets, he said.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem said the government provides cash incentives as financial aid for exporters to make them competitive. There is no justification for deducting source tax on such aid.
Tax on this aid, counting it as income of the industry, would be a mockery for the export-oriented sectors, he added.
15% gain tax on land sales
According to the new income tax law, the payment against government-acquired land or income from selling the land will be treated as income of a taxpayer. The taxpayer has to pay a 15% gain tax on the capital gains.
Under the law, individual taxpayers are also divided into two categories based on their capital gains from the sales of land.
If the land is sold or transferred within five years of acquisition, the tax will be levied according to individual tax brackets. Conversely, if the land is sold or transferred after a period of five years, a 15% capital gains tax is applicable.