Meditation services are now subject to VAT.

 

After three years of exemption, the government has proposed imposing VAT on meditation services.

In his budget statement issued, Finance Minister AHM Mustafa Kamal announced, "I propose to eliminate the existing VAT exemption on 'Meditation Services."

During his budget presentation for the current fiscal year (Financial Year 2022), the finance minister, on the other hand, supported the decision to exempt meditation from VAT, claiming that it was decided for the benefit of mental health and mind control during the global pandemic.

7.0 percent VAT on meditation was originally introduced in Financial Year 2014, however it was later reversed by then-finance minister AMA Muhith in Financial Year 2015, emphasizing the role of allowing citizens to heal from diseases and illnesses.

VAT on meditation was suggested again in the Financial Year 2019 budget presentation, but the finance minister put it aside for the past two years, revising the same fiscal's proposed finance law.

The tax credit for middle-income individuals is shrinking.

 

In the coming fiscal year, tax relocation due to investment is expected to decrease for the middle-income group of people of Bangladesh.

Currently, only a maximum of 25% can be invested.

For the coming fiscal year, the Finance Bill-2022 proposes a reduction in the amount of investment that is eligible for a tax credit to 20%. It also increased the income tax rate as well as the ranges of qualified investments.

Currently, an individual taxpayer with a yearly income of up to Tk 1.5 million is eligible for a 15% tax credit on a qualifying investment amount of up to 25% of total income.

For anyone with an income of up to Tk 1.5 million, the tax credit ratio would remain constant, whereas those higher earnings will advantage from the policy.

In the upcoming financial year, the tax refund rate for individuals with annual incomes over Tk 1.5 million would be increased from 10% to 15%.