In Bangladesh, the fixed income employees, particularly the government employees, have been financially the worst sufferers. Happily, the government realised the problem and this time increased the salary of the government employees. A few years ago some top executives of private commercial banks and non-banking financial institutions received Taka one million to one and a half million from their employers as overseas medical expenditure for their family members. The decision makers of the government did not consider the phenomenon as fair. To impose control over such expenditure they proposed tax on medical expenses. A provision was made in the budget of 2014-15 to the effect that when an employee would receive more than Tk.60,000 in a financial year as medical allowances for family, the excess amount will be added to the taxable income of that employee. The provision is still in force. In Bangladesh medical expenditure has gone sky high. It is very difficult to bear the expenses, which is well known to all. Almost all types of medical treatment is available in the country now. In case of treatment of major illness costs over Tk.100 thousand even if treatment is taken within the country.
In this situation the provision of tax on medical expenditure needs to be amended. Medical expenses of an employee incurred within Bangladesh should be tax free and only overseas medical expenses may be considered as taxable as all sorts of treatment is available locally. Therefore, I would to like to urge upon the Ministry of Finance and the parliament to amend the existing provision accordingly and included in the budget for 2016-17 financial year which is under consideration of the parliament now. Local medical expenditure reimbursed by employer to an employee should be tax free. It would reduce financial burden of employees.
Md. Ashraf Hossain
120, Cemtral Bashabo, Dhaka-1214.