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Bangladesh brings public servants' bonus, festival allowances under tax net

Xinhua, June 4, 2015 Adjust font size:

Bangladeshi Finance Minister AMA Muhith has proposed for imposing tax on public servants' bonus and festival allowances besides their salary in the 2015-16 budget starting in July.

In his budget speech at the parliament on Thursday, Muhith made the proposal saying "As per existing provision, all allowances excluding basic salary of government employees are tax free which is discriminatory."

"As first step to remove such discrimination, I propose similar tax treatment on basic salary, bonus and festival allowance for both government and non-government salaried employees."

The proposal came at a time when the Bangladeshi government is finalizing a new pay scale, increasing the salary of public servants.

Once the proposal comes into effect, sources said millions of public servants will need to pay tax on their salary, bonus and festival allowance like private sector officials.

Muhith has unveiled a record about 3 trillion-taka (about 37.83 billion U.S. dollars) proposed national budget targeting an economic growth of 7 percent for the next 2015-16 fiscal year. Endi