Question: What are the impacts of Centre for Policy Dialogue (CPD) earlier

Finance Act 2017 on individual urged the government to slash the personal
taxpayer? income tax rate for the lowest threshold to
7.5 percent from 10 percent.
Answer: The government's move to keep
tax-free income threshold and the tax rates
on individuals and firms unchanged in the
next fiscal year is likely to affect many low
and middle income people who would be
new to income taxes. For example, if
income tax-exempt earning limit remains at
Tk 2.50 lakh a year for individuals, it may
reduce many people's disposable income.
Many low income people will come into the
tax net just because of spike in their annual
income. This will reduce their disposable
income,” said Masud Hasan, who works at
the finance and control department of a
private company
TAX BURDEN ON MANY
INDIVIDUALS WILL RISE JUST
BECAUSE OF INCREMENT IN THEIR
SALARIES.
The government should have increased tax
free income threshold considering inflation.
Various quarters, including businesses,
have been demanding a rise of the tax-free
threshold since the cost of living is rising A reduction in personal income tax will
with inflation. help boost people's disposable income,
Finance Minister AMA Muhith, on several especially of the middle-class, said
occasions, said he favored maintaining a Debapriya Bhattacharya of CPD in April
fixed tax-free income threshold for several when the think-tank unveiled its proposals
years instead of raising the tax-free income for the next fiscal year. In addition to
limit every year. individual taxpayers, all corporate tax,
except the tobacco processors', including
The minister's view comes at a time when cigarettes makers', are also going to remain
inflation is on the rise mainly due to the unchanged.Affluent people will continue to
increasing prices of rice. In addition, face similar net wealth surcharge structure.
application of a single and uniform VAT Muhith said this should be maintained until
rate is also feared to raise the cost of many an effective wealth tax act is enacted. Some
goods and services in the coming days. measures, making it mandatory for
Also, continuation of 10 percent tax on the employees serving in an executive or a
income of up to Tk 6.50 lakh a year also management position in private firms to
eats into the disposable income of people at submit tax returns, are going to bring more
the bottom of the income tax slab. The people under the tax net.