Jun 09, 2022 4:04:32 p.m.
Jun 09, 2022 10:05:23 p.m.
Finance Minister AHM Mustafa Kamal has announced a corporate tax cut to reinvigorate the economy after the setbacks caused by the pandemic and the war in Ukraine.
In line with previous budgets, the minister proposed a cut of 2.5 percentage points that would bring the rate to 27.5% in the coming fiscal year, reports bdnews24.com.
Reducing the tax, one of the main costs of doing business, will encourage investment and create more job opportunities, Kamal said in his budget speech to parliament on Thursday.
Bangladesh previously cut the corporate tax rate by 2.5 percentage points in each of the previous two fiscal years, from 35% to 30%. Now it will drop to 27.5%.
The rate will apply to all companies not listed on the stock market, while the rate for listed companies will be lowered to 22.5 percent.
“To facilitate the formalization of the economy and encourage the formation of a single-person company (OPC), I propose to reduce the tax rate for OPCs from 25% to 22.5%,” the minister said.
“For the sake of developing the stock market and attracting investment, I propose a tax rate of 20% instead of the existing 22.5% for listed companies that issue shares with a value greater than 10% of their capital paid up by an initial public offering,” he said.
“However, I propose that the tax rate be 22.5% for a listed company that issues shares worth 10% or less than 10% of its paid-up capital through an IPO .”
However, all receipts, income and expenses and investments above Tk 120,000 must be processed through the bank in order to qualify for these reduced rates.