Finance Minister Mr. AMA Muhith presented the FY2018-19 national budget to parliament on 7^th June 2018. Except for a minor downward tweaking of the corporate tax rate, and some small increases in tobacco taxation and supplementary import duties, no significant new tax measures have been proposed for the FY2018-19 budget.

For non-publicly traded bank, Insurance and Financial Institutions the reduced corporate tax of rate of 40% has been proposed from previous 42.5%. Corporate tax rate for publicly traded bank, Insurance and Financial Institutions has been reduced to 37.5% from previous 40%. The corporate tax rate for any other business remained the same in the 2018-2019 proposed budgets.

Mr. Muhith proposed corporate tax for the non-listed garment sector at 15 percent from the revised rate of 12 percent. The minister also proposed 2 percent increased corporate tax rate for the green garment factories at 12 percent from the revised rate of 10 percent. Muhith proposed 12.5 percent corporate tax for the publicly listed garment companies on the stock market.

No change in the individual tax slab has been proposed in the 2018-2019 fiscal budgets. The allowable perquisites limits has been increased to BDT 5,50,000 from previous BDT 4,75,000.

As regard to Tobacco tax, the government did not increase the supplementary duty (SD) on tobacco products and thus SD remained same as before. The SD, which is imposed as a percentage of the price, varies significantly across tobacco products and brands. Since the SD is applied uniquely to tobacco products, it is effectively called ‘excise tax’.

SRO 17/783-Mushak/2017 has been cancelled by SRO no. 18/802-Mushak/2018 and raised the lowest price of cigarettes from BDT 27 to BDT 32 by incorporating 3 tiered price slabs from existing 4 slabs. This fiscal budget also increased the price of medium segment cigarettes to BDT 48 and above from BDT 45 and above. However, it raised the high segment cigarette from BDT 70 and above to BDT 75 and above.