Finance Minister AMA Muhith has proposed to reduce corporate tax for listed banks, insurance and financial companies, aiming at pulling in investors.
Muhith said this while placing the proposed budget before the parliament at noon today with Speaker Shirin Sharmin Chaudhury in the chair. Prime Minister Sheikh Hasina was also present.
The tax rate, now levied on the banks, insurance and financial entities listed with the capital market, has also been proposed to be cut to 37 per cent from 37.5 per cent.
The non-listed banks, insurance and financial institutions will see their tax dropped as well, to 42 per cent from 42.5 per cent.
The other companies will have their tax rate unchanged.
In the budget speech, Muhith said, “It is often argued that the corporate tax rate in Bangladesh is high. This is not correct. Corporate tax for publicly traded company in Bangladesh is 25 percent, which is lower than many countries in South Asia and very compatible with global average (24.29 percent).
“However, tax rates for banks and financial institutions are a bit higher than other corporate sector. Therefore, I propose to reduce the tax rate for banks and financial institutions by 2.5 percent. We will lose a certain amount of tax revenue from such rationalization of corporate tax rate; however, this will give a positive signal to our investors.”
He also said, “With this proposed rate, our highest corporate tax rate will be mostly 40 percent, and next highest rate will be 37.5 percent, except for tobacco manufacturers and non-listed mobile phone operators.”