In different countries around the world, governments are implementing various tax relief measures to provide financial support to individuals and businesses and stimulate economic growth.
In Bangladesh, the National Pension Authority has requested the National Board of Revenue (NBR) to introduce tax rebates on Universal Pension deposits. This move aims to encourage more people to invest in pensions and secure their financial future. Tax rebates are currently available for investments in savings certificates, life insurance premiums, and government provident funds. Taxpayers can receive a rebate of 3% of their total income or 15% of their investment, whichever is less.
Meanwhile, in Kenya, the Kenya Revenue Authority (KRA) is offering a 100% waiver on penalties during Taxpayers' Day. This initiative is designed to recognize and reward tax-compliant businesses and individuals. Additionally, the KRA is providing an amnesty to individuals who have accrued penalties and interests up to 2022. The amnesty program has already seen over 17,000 taxpayers applying for relief since its launch on September 1, 2023.
In the United States, the state of Alabama is taking steps to provide tax rebates to hard-working Alabamians. As part of the 2023 budget, Governor Ivey has announced one-time tax rebates for eligible individuals. To qualify, individuals must have filed a 2021 Alabama income tax return by October 17, 2022, and should not be non-residents, estates, trusts, or claimed as dependents in 2021. The aim of this initiative is to provide financial relief to working families during the holiday season. Payments will be deposited directly into bank accounts starting from November 30, 2023, and paper checks will be mailed to those without listed bank accounts.
In South Korea, the government is focusing on supporting the tourism industry by doubling the ceiling of immediate tax refunds for foreign tourists. Currently, tourists can receive on-the-spot tax refunds for purchases up to 500,000 won, with a maximum cap of 2.5 million won on total payments. Starting from January 1, 2024, the new policy will increase the per-payment amount to 1 million won and the total to 5 million won. This move aims to attract more overseas visitors and provide a boost to the tourism industry.
Singapore has also joined the list of countries implementing tax rebates to support families. The Singaporean government has introduced the Parenthood Tax Rebate (PTR), offering up to $20,000 in tax rebates for the third child and subsequent children. The PTR is designed to ease the cost of raising a family and encourage population growth. The rebate structure is progressive, with $5,000 for the first child, $10,000 for the second, and $20,000 for each child thereafter. Eligibility for the PTR depends on the child's citizenship status and the marital status of the parents within the relevant tax year. This initiative reflects the Singaporean government's commitment to supporting families and encouraging population growth.
In India, the government is developing a 'verification mechanism' to validate the refund claimed by exporters under the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. The RoDTEP scheme was implemented over three years ago to refund the embedded non-creditable central, state, and local levies paid on inputs to exporters in order to boost India's exports. However, last year, several countries, including the United States, imposed countervailing or anti-subsidy duties on certain Indian products as retaliation against RoDTEP [ad8b99d0].
Looking ahead, there are expectations of tax rebates in the upcoming budget. Akhil Chandna, Partner & National Leader, GMS, Grant Thornton Bharat, shares insights on potential tax rebates in the upcoming budget. He highlights past budget incentives and suggests future changes may focus on the new tax regime. Chandna's analysis provides valuable information for individuals and businesses anticipating tax relief measures in the upcoming budget.
These initiatives in different countries share a common theme of providing tax relief to individuals and businesses. Whether through rebates, waivers, or refund policies, governments are striving to alleviate financial burdens, stimulate economic growth, support working families, and boost key sectors such as tourism.