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Monday, June 30, 2008
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Cabinet okays FY09 budget, income tax ceiling raised

The council of advisers yesterday approved the proposed budget for 2008-09, bringing a few changes including raising the ceiling of individual income tax.

President Iajuddin Ahmed through an ordinance will pass the budget tomorrow. Earlier on June 9, Finance and Planning Adviser Mirza Azizul Islam proposed the Tk 99,962-crore budget.

Since at present there is no parliament in place to debate the proposed budget, the government invited different quarters to post their recommendations and suggestions regarding the budget till June 16 on the government's official website.

The government made a few adjustments to the proposed budget taking into consideration the reactions and recommendations made by different chambers, trade bodies, economists and individuals.

In the approved budget, the limit of tax-free income of an individual has been increased to Tk 1,65,000 from Tk 1,50,000.

For taxpayers who are female or aged over 70 years or disabled, the tax-free income limit has been raised to Tk 1,80,000 from the proposed Tk 1,65,000.

"Inclusion of the disabled in this group is in part their social recognition," said an official at National Board of Revenue (NBR).

However, people from different quarters had been urging the government to increase the ceiling of tax-free income to Tk 2,00,000 since day-to-day expenses of the middle class have increased significantly following inflation and spiralling prices of essentials.

The duty on printed paper has been reduced to 12 percent from 15 percent. In the proposed budget, however, the government had indicated that the duty would be set at 25 percent.

Customs duty on pictorial and drawing books used as educational material for children has also been reduced to 12 percent from existing 15 percent. Mirza Aziz earlier during his budgetary speech had proposed a 25-percent increase on the duty of the material, saying that the contents of the books are not in conformity with the values and culture of the country.

The duty on import of aircraft and their parts has been made zero to encourage the local airlines, sources said.

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