• Sunday, October 26, 2014

Micro lenders may come under tax net

Rejaul Karim Byron and Sohel Parvez

The government plans to impose 10 percent tax on net income of microfinance institutions (MFIs) from the next fiscal year.
The National Board of Revenue had taken such a move in 2005, but later shelved the plan in the face of opposition from different quarters, including micro finance operators. There are 700 MFIs in the country now.
The government is finding new sources of income tax and value added tax as the revenue collection target for the upcoming fiscal year may rise 20 percent to Tk 149,720 crore from the revised target of the outgoing year.
In the upcoming fiscal year, the NBR aims to collect the highest amount of revenue from income tax followed by VAT, to implement a national budget of Tk 250,000 crore.
For fiscal 2014-15, the NBR plans to collect Tk 57,500 crore in income tax, which is 30 percent higher than the revised target for the outgoing year. The VAT collection target may go up by 26 percent to Tk 56,500 crore from the revised target of the current year.
In another bid, the tax collector may bind homeowners to receive house rents worth more than Tk 25,000 through cheques. The rate of VAT, which is now charged on the basis of fixed value addition or truncated value for different goods and services is likely to be raised.
Officials said the spike in the rate of VAT may help businesses get ready for paying a 15 percent VAT under a new law that will come into force in July 2015.
Currently, businesses such as government contractors, suppliers and certain types of restaurants pay VAT at 4 percent to 9 percent on the basis of a truncated value.
If the rate is not hiked in phases, it may become a pressure for businesses, the officials said.
The government also plans to impose health tax on all kinds of tobacco products. The tax may be levied as 1 percent surcharge on the selling prices of tobacco products.
The officials said a fund comprising health tax and eco tax will be used for the treatment of patients affected by tobacco products and to set up effluent treatment plants.
The government may not continue the provision of allowing investment of undisclosed money in the housing sector next fiscal year, they said.

 

Published: 12:00 am Tuesday, May 27, 2014

Last modified: 11:13 pm Monday, May 26, 2014

TAGS: government National Board of Revenue microfinance institutions (MFIs) micro finance operators. VAT collection

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