Budget 2004
I am in general agreement with your staff correspondent's analysis of the income tax proposals in the budget for FY 2004-2005 and 2005-2006, except for the analysis that "a person who earns Tk 9 lakh or any amount above that will be taxed Tk 1,27,500/- against Tk 1,52,500 in FY 2003-2004, making a slide of Tk 25,000 or 16 per cent. My limited understanding of the proposals in FY 20032004 is that one had to pay Tk 1,47,500 for an income of Tk 9 lakh, not Tk 1,52,500, as reported. If a person had an income of more than Tk 9 lakh he had to pay 25 per cent of the amount exceeding Tk 6,90,000 in that fiscal year. This means that the highest rate of tax ( 25 percent) started when a person's income reached the level to Tk 6,90,000. In FY 2004-2005 , the highest rate of 25 per cent will not be reached until a person's income reaches a higher amount, that is, Tk 9 lakh. After that he will be taxed 25 per cent of the amount exceeding Tk 9 lakh. If one has an income of Tk 3 crore, he will have to pay 25 per cent of the amount exceeding Tk 9 lakh in FY 2004-2005 and 2005-2006, but in FY 2003-2004 he had to pay 25 per cent of any amount exceeding Tk 6,90,000. I do not know which one is more equitable.
I am not a tax expert. So my conclusions might be wrong. I would expect The Daily Star to give us a clear and accurate analysis of the new tax structure.
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