• Sunday, Jan 23, 2022
  • Last Update : 03:32 am

Non-listed entities to get 2.5% corporate tax cut

  • Published at 07:25 pm May 20th, 2021

However, corporate tax for other sectors will remain unchanged like last year

Non-listed entities are going to get a 2.5% corporate tax cut in the budget for the 2021-22 fiscal year, according to sources at the Ministry of Finance and the National Board of Revenue (NBR).

However, corporate tax for other sectors will remain unchanged like last year, the sources added.

Experts said that the decision is expected to increase investment in the private sector of the country, but it might discourage firms from listing with the stock market. 

Business people welcomed the decision, saying a tax cut during the pandemic would help industries survive.

Also read - DCCI seeks gradual corporate tax cuts for 3 back-to-back FYs

International Business Forum of Bangladesh (IBFB) Vice President and Chairman of Newton Group Lutfunnisa Saudia Khan told Dhaka Tribune that this move is appreciated amid the pandemic.

If the trend of decreasing corporate taxes continues, the economy will gain leverage, she added.

“As business remains difficult due to complex bureaucratic systems, for increased ease of business, we need coordination and government support,” Khan further said. 

Monowar Hossain, vice president of the Dhaka Chamber of Commerce and Industry (DCCI), said this move will help boost the confidence of business people. 

“For a long time, we were asking for this. Not only that, but also those who want to make new investments will be encouraged to invest more. It would also motivate foreign investment,” he added.

Mahtab Uddin, a lecturer at the Dhaka University Department of Economics and a research economist at South Asian Network on Economic Modeling (SANEM), said that the relaxation is commendable, as it will benefit the business sector if the tax system becomes more friendly.

Corporations often deal with indirect transactions due to the complex tax process; by updating the income tax law, it can be made business-friendly, he added.

Also read - Business community seeks reduction in corporate tax

Other than financial institutions, the corporate tax rate is 25% for publicly listed companies and 35% for non-listed firms.

A publicly listed bank or a non-bank financial institution (NBFI) must pay 37.5% corporate tax — which is 40% for non-listed banks.

For publicly listed mobile companies, the tax rate is 40%, while it is 45% for non-publicly listed mobile network operators.

Apart from this, companies in the ready-made garment sector have to pay corporate taxes at the rate of 10% and 12% and cooperatives at the rate of 15%.

Facebook 50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail