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%.

Dhaka is seeking investment from Bangkok.

The MCCI chief said Dhaka and Bangkok should cooperate with each other both bilaterally and multilaterally. Metropolitan Chamber of Commerce and Industry President Abdul Hafiz Choudhury said,Thai investments have excellent future as Bangladesh offers most attractive incentives for investing in energy sector.

"Bangladesh requires US$5 to $7.0 billion (500 to 700 crore) investments in generation and distribution of 7,000 megawatt of electricity by the end of 2011," he said to a Thai business delegation visiting Bangladesh.

Mr Hafiz said the Thai government will find attractive opportunities in the energy sector as the Bangladesh government has initiated large projects under public-private partnership (PPP).

Dhaka has established itself as the cheapest production base in South Asia and Bangkok can take the advantage of it, he said. "Thai investors can invest in labour intensive sectors including textiles, leather, paper and pulp, tourism, agro-based and agro-supporting industries," he added..