1.

TAX STRUCTURE IN BANGLADESH

Taxation is one of the major sources of public revenue to meet a country's revenue and
development expenditures with a view to accomplishing some economic and social objectives,
such as redistribution of income, price stabilization and discouraging harmful consumption. It
supplements other sources of public finance such as issuance of currency notes and coins,
charging for public goods and services and borrowings.

1.1

Derived From:

The term 'tax' has been derived from the French word taxe and etymologically, the Latin word
taxare is related to the term 'tax', which means 'to charge'. Tax is 'a contribution exacted by the
state'. It is a nonpenal but compulsory and unrequited transfer of resources from the private to
the public sector, levied on the basis of predetermined criteria.

1.2
a.

Definitions

1.3

Basis of Residence [Section: 2(55)]:

Assessee [Section: 2(7)]: Assessee means a person by whom any tax or other sum of
money is payable under Income Tax Ordinance 1984.
b.
Person [Section: 2(46)]: Person includes an individual, a firm, an association of persons,
a Hindu undivided family, a local authority, a company and every other artificial juridical
person.
c.
Income [Section: 2(34)]: Income means any sum of income or gain from whatsoever
source derived, or accruing or arising or received or deemed to be accrue or arise or to be
received under any provision of IT Ordinance 1984.
d.
Tax [Section: 2(62)]: Tax means the income tax payable under the Income Tax Ordinance
1984 and include any additional tax, excess profit tax, penalty, interest, fee or other charge
leviable or payable under the IT Ordinance 1984.
e.
Income Year [Section: 2(35)]: Income Year means the financial year immediately
preceding the assessment year or when accounts are closed on a date within the financial year,
the twelve months ending on the date on which accounts are closed.
f.
Assessment Year [Section: 2(9)]: Assessment Year means the period of twelve months
beginning from first day of July of every year. This is the immediate following financial year of
Income Year. 2013-14
g.
Annual Value [Section: 2(3)]: Annual value means the sum arising from letting out any
property and related furniture, fixture and fittings or any sum received as Annual Rent,
whichever is higher.

i. Individual: An individual will be Resident: - if he/she stays in Bangladesh for a period of or

for the periods all together at least 182 days or more in the income year or - if he/she stays in
Bangladesh for a period of or for the periods all together at least 90 days or more in the income
year and 365 days or more during the immediate four preceding years of income year.
ii. Company: The Company will be resident if the management of its affairs is situated wholly
in Bangladesh in the income year.

1.4

Income Tax at a Glance (2013-2014)

Among direct taxes, income tax is one of the main sources of revenue. It is a progressive tax
system. Income tax is imposed on the basis of ability to pay. The more a taxpayer earns the
more he should pay- is the basic principle of charging income tax. It aims at ensuring equity
and social justice.