Budget FY22: Big tax cut for businesses

Finance Minister AHM Mustafa Kamal has proposed to reduce existing corporate tax rates to facilitate achieving the target for private investment to GDP (gross domestic product) ratio.

The minister proposed to reduce the tax rate for companies not listed in the stock exchange to 30% from 32.5%, and the tax rate for listed companies to 22.5% from 25% for 2021- 2022 fiscal year.

"The present ratio of private investment to GDP stands at 23%. The government has taken initiatives to improve this ratio," Kamal said while placing the budget in the parliament on Thursday.

"In line with the ongoing trend of globalization and in light of the ongoing Covid-19 situation, revisiting the existing tax rate in Bangladesh is a demand of the time," he said.

The existing tax rate of 32.5% for companies is also applicable for One Person Companies (OPCs), he said. 

With a view to further formalize the economy and to encourage formation of OPCs, the minister proposed a tax rate of 25% for the One Person Companies.

"A competitive tax rate coupled with the prevailing business-friendly environment will make a significant contribution towards expansion of trade and commerce and industrialization in the country," he added.