The Chairman of Bangladesh’s National Board of Revenue (NBR), Ghulam Hussain, has indicated that the Government plans to reduce corporate income tax rates with effect from the next fiscal year, which starts on July 1, 2014.
The highest corporate tax rate in Bangladesh, at 45 percent, has long been considered uncompetitive in Asia. Although the lowest rate is 27.5 percent, and there are tax reductions for listed companies paying dividends, the average effective corporate rate is still estimated to be over 40 percent.Hussain confirmed that the corporate tax rate is too high, and that it should be reduced in stages to align it more closely to the highest rate of individual income tax, currently 25 percent.
He hoped that the fall in revenue associated with the tax cut would be offset by an increase in tax compliance and a stronger economy.
Hussain indicated that the rate reduction would be part of a much wider restructuring of Bangladesh’s tax code, to make it more progressive, to increase taxes on environmentally-damaging or unhealthy products, and improve tax administration through automation.
by Mary Swire, Tax-News.com, Hong Kong
