In order to woo investors in the new fiscal, Finance Minister AMA Muhith has proposed to reduce corporate tax rates in banks, insurance companies and financial institutions.
The Finance Minister presented the budget for Fiscal Year 2018-19 on Thursday in the parliament in presence of President Abdul Hamid and Prime Minister Sheikh Hasina.
The corporate tax rates of the publicly traded banks, insurance companies and financial institutions have been reduced to 37.5 percent from the existing 40 percent in the new fiscal.
On the other hand, the tax rates of non-publicly traded companies have been brought down to 40 percent from the existing 42.5 percent.
“Although revenues will drop in this sector, the tax cuts in corporate sectors will woo investors,” the minister said in his budget presentation.
Muhith proposed to keep the tax rates in other companies unchanged.
“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),” he said in his budget speech.
He added that highest corporate tax will be 40 percent, and next highest rate will be 37.5 percent, except for tobacco manufacturers and non-listed mobile phone operators.