Taxation imposed on political parties' income

NBR Plans to Tax Political Parties' Income and Reduce Tax Exemptions

• The National Board of Revenue (NBR) aims to bring political parties' income under taxation from the next fiscal year.

• Additionally, it is considering revoking certain tax exemptions for the Prime Minister, ministers, members of parliament, and judges. These measures may be implemented based on recommendations from a special NBR task force.

Concerns Over Political Party Funding

• Experts highlight a lack of transparency in political parties' income and expenditures.

• Although parties submit annual audit reports to the Election Commission, actual income is often underreported.

• Dr. Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB), supports taxation on political parties’ income to enhance financial transparency.

Over 50 Registered Political Parties

• Currently, Bangladesh has more than 50 registered political parties.

• Recent large-scale Iftar events and other costly activities by new political parties have raised concerns about their funding sources.

Reduced Tax Exemptions for Government Officials

• While the basic salary and honorarium of the Prime Minister, ministers, MPs, and Supreme Court judges are taxable, their allowances remain tax-free.

• The NBR task force has proposed taxing festival allowances and other benefits of ministers and MPs to ensure fair taxation.

Ensuring Financial Accountability

• NBR policymakers argue that tax-free income for political parties has, in some cases, facilitated money laundering and undisclosed financial transactions.

• Implementing taxation would promote financial accountability and prevent misuse of funds.

These proposed changes are expected to be included in the upcoming national budget, pending approval from the Chief Adviser of the interim government and the Finance Adviser.