Corporate tax slashed by 2.5pc for banks, FIs

The government will reduce the corporate tax rate for banks and Financial Institutions (FIs) by 2.5 percent in the next fiscal 2018-19 (FY19), reports BSS.

Finance minister AMA Muhith made the proposal on Thursday while placing the national budget in the Jatiya Sangsad.

“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),” Muhith said in his budget speech.

However, he said, 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,” he added.

He said “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 proposed that corporate tax rates for other companies remain unchanged.

“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,” he added.