Mobile phone users and tobacco consumers may have to count additional costs in the upcoming fiscal year (FY).
The Value Added Tax (VAT) wing under the National Board of Revenue (NBR) is likely to propose a hike in Supplementary Duty (SD) on mobile phone subscribers in FY 2020-21.
Currently there is 10 per cent SD on mobile phone users which may go up to 15 per cent, sources said.
Tax on all types of tobacco items, starting from bidi, cigarettes and its 'smokeless' version may also go up in the budget, sources said.
Finance Minister AHM Mustafa Kamal is likely to propose the changes while placing the budget in parliament on June 11 next.
Sources said the tax on mobile subscribers would be increased at a level.
They, however, said much would depend on the decision of the government high-ups.
In this Covid-19 pandemic, use of mobile phone, internet services has increased significantly due to restriction on movement.
Sources said the NBR considered the areas where tax collection can be raised substantially without affecting the interest of the common people much.
Little increase of taxes on large number of mobile phone users may help increase the government's revenue earnings. Such increase is essential to help economic recovery, sources said.
Currently, the mobile phone users pay VAT at 15 per cent, 1.0 per cent surcharge and also pay 5.0 per cent VAT on internet use.
Last year, the NBR increased SD to 10 per cent from 5.0 per cent for mobile phone users. The SD was 3.0 per cent in FY 16.
According to the mobile phone operators, each mobile phone subscriber pays Tk 53 out of Tk 100 to the public exchequer in the form of taxes and other charges.
Meanwhile, domestic manufacturers of capital machinery and spare parts have been exempted from payment of Value Added Tax.
The manufacturers have been paying VAT at a rate of 15 per cent to encourage local production of capital machinery and spare parts.
The VAT wing of the board issued a Statutory Regulatory Order (SRO), dated May 14, 2020, in this regard.
VAT was applicable at the production stage of the items for the local manufacturers.
As per SRO, the NBR will offer the benefit to those types of capital machinery and spare parts that are listed as eligible for tax benefit.
Significant improvement of agricultural and textile machinery as well as light engineering sector prompted the NBR to offer the benefit to boost local production.
Currently, local manufacturers are enjoying duty benefit on import of spare parts for domestic production of machinery and necessary parts.
However, the NBR has tagged some conditions against the benefit that include having VAT registration, at least 30 per cent value addition of the products at factories, proper books of accounts and submission of VAT returns regularly.
The manufacturers will also have to be registered with Bangladesh Investment Development Authority, Bangladesh Economic Zone Authority or Bangladesh Hi-Tech Park Authority.
They must have the required infrastructure and machinery at the factory for production of capital machinery and spare parts.
The factories should not have any outstanding dues in VAT, interest or penalty under the VAT and Supplementary Duty Act-2012.
As per the SRO, the NBR would be able to cancel the benefit if the beneficiary breaches the conditions of the gazette notification.
Taxpayers who have missed the deadline for submission of corporate or withholding tax returns will be able to submit those until June 29, 2020 without penalty.
The facility will be valid for those taxpayers who have failed to comply with the given timeframe from March 26 to May 30, 2020 as per income tax law due to Covid-19 pandemic.
Deadline for submission of some of the corporate tax returns expired on May 15, 2020. As per law, the taxmen are bound to impose penalty for failure of submission of the tax returns within the deadline.
The NBR will also allow the other taxpayers to submit their necessary papers, including income statements, or respond to the notices served by the taxmen within the extended time frame without late fees or penal taxes.
The income tax department of the NBR issued an order on Monday extending the deadline both taxpayers and taxmen.
The order, signed by Income Tax (Policy) member Md Alamgir Hossain, has extended time until August 05, 2020, for taxmen to complete their official procedures regarding dispute resolution, appeal and tribunal.
Taxmen who could not complete the procedures within the stipulated time in the income tax law, from March 26 to May 30, 2020, will be able complete the filing by August 05, 2020.