Taxation- 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. 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 non-penal but compulsory and unrequited transfer of resources from the private to the public sector, levied based on predetermined criteria.

Corporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level in a particular jurisdiction. Such taxes may include income or other taxes. The tax systems of most countries impose an income tax at the entity level on certain type(s) of entities (company or corporation). Many systems additionally tax owners or members of those entities on dividends or other distributions by the entity to the members. The tax generally is imposed on net taxable income. Net taxable income for corporate tax is generally financial statement income with modifications, and may be defined in great detail within the system. The rate of tax varies by jurisdiction. The tax may have an alternative base, such as assets, payroll, or income computed in an alternative manner.

History of Corporate Taxation in Bangladesh:

Bangladesh inherited a system of taxation from its past British and Pakistani rulers. The system, however, developed based on generally accepted canons and there had been efforts towards rationalizing the tax administration for optimizing revenue collection, reducing tax evasion and preventing revenue leakage through system loss. Taxes include narcotics duty (collected by the Department of Narcotics Control, Ministry of Home Affairs), land revenue (administered by the Ministry of Land and collected at local Tahsil offices numbered on average, one in every two Union Parishads), non-judicial stamp (collected under the Ministry of Finance), registration fee (collected by the Registration Directorate of the Ministry of Law, Justice and Parliamentary Affairs) and motor vehicle tax (collected under the Ministry of Communication). The tax structure in the country consists of both direct (income tax, gift tax, land development tax, non-judicial stamp, registration, immovable property tax, etc) and indirect (customs duty, excise duty, motor vehicle tax, narcotics and liquor duty, VAT, SD, foreign travel tax, TT, electricity duty, advertisement tax, etc) taxes. The present land revenue system of Bangladesh has its base in the East Bengal state acquisition and tenancy act 1950 which established a direct contract

between the taxpayer and the government. The most important tax on the value of transferred property is the non-judicial stamp tax (levied under the Stamp Act 1899), which has been in existence since January 1899. Current rates of non-judicial stamp duty are provided in the First Schedule of the Finance Act 1998, ranging from Tk. 4 to Tk. 10,000 in case of absolute rate, or from 0.07% to 1.5% of the value of consideration in case of ad valorem rate. The judicial stamp tax is being levied under the Court Fees Act 1870, although the levy of court fees originated in the introduction of the Bengal Regulation No. 38 of 1795. The first sales tax was introduced in the former Central Provinces of India in 1938. In Bengal, sales tax was adopted in 1941. In 1948, sales tax was transferred as a central tax under the General Sales Tax Act of 1948. The Sales Tax Act 1951 came into force on 1 July 1951 by repealing the Pakistan General Sales Tax Act of 1948. Until 1982, sales tax was being collected under the 1951 Act, which was replaced by the Sales Tax Ordinance 1982. The VAT law was promulgated by repealing the Business. Income tax was first introduced in the subcontinent by the British in 1860 to make up the revenue deficit caused by the sepoy revolt, 1857. After independence of Bangladesh, income tax was made effective under the Income Tax Act 1922 passed on the basis of the recommendations of the All-India Income Tax Committee appointed in 1921. Currently, income tax has been imposed under the Income Tax Ordinance 1984 (ITO) promulgated on the basis of recommendations of the Final Report of the Taxation Enquiry Commission submitted in April 1979. Income taxpayers (assesses) are classified as individuals, partnership firms, Hindu undivided

Taxation of Corporations
Many countries impose corporate tax or company tax on the income or capital of some types of legal entities. A similar tax may be imposed at state or lower levels. The taxes may also be referred to as income tax or capital tax. Entities treated as partnerships are generally not taxed at the entity level. Most countries tax all corporations doing business in the country on income from that country. Many countries tax all income of corporations organized in the country. Company income subject to tax is often determined much like taxable income for individuals. Generally, the tax is imposed on net profits. In some jurisdictions, rules for taxing companies may differ significantly from rules for taxing individuals. Certain corporate acts, like reorganizations, may not be taxed. Some types of entities may be exempt from tax. Many countries tax corporate entities on income

and also tax the owners when the corporation pays a dividend. Where the owners are taxed, a withholding tax may be imposed. Generally, these taxes on owners are not referred to as corporate tax. Corporations may be taxed on their incomes, property, or existence by various jurisdictions. Many jurisdictions impose a tax based on the existence or equity structure of the corporation. For example, Maryland imposes a tax on corporations organized in that state based on the number of shares of capital stock issued and outstanding. Many jurisdictions instead impose a tax based on stated or computed capital, often including retained profits. Most jurisdictions tax corporations on their income. Generally, this tax is imposed at a specific rate or range of rates on taxable income as defined within the system. Some systems have a separate body of law or separate provisions relating to corporate taxation. In such cases, the law may apply only to entities and not to individuals operating a trade. Such laws may differentiate between broad types of income earned by corporations and tax such types of income differently. Generally, however, most such systems tax all income of a corporation in the same manner. Some systems tax corporations under the same framework of tax law as individuals. In such systems, there are normally taxation differences related to differences between the inherent natures of corporations and individuals or unincorporated entities. For example, individuals are not formed, amalgamated, or acquired, and corporations do not generally incur medical expenses except by way of compensating individuals. Many systems allow tax credits for specific items. Such direct reductions of tax are commonly allowed for foreign taxes on the same income and for withholding tax. Often these credits are the same as those available to individuals or for members of flow through entities such as partnerships. Most systems tax both domestic and foreign corporations. Often, domestic corporations are taxed on worldwide income while foreign corporations are taxed only on income from sources within the jurisdiction. Many jurisdictions imposing an income tax impose such tax income from a permanent

establishment within the jurisdiction.

Corporations are also subject to property tax, payroll tax, withholding tax, excise tax, customs duties,

value added tax, and other common taxes, generally in the same manner as other taxpayers. These,
however, are rarely referred to as corporate tax.

Bangladesh Corporate Tax Rates:

Types of Company Bank*, insurance, financial institutions Type of Income (1) Capital gain arising out of - Transfer of securities of listed company
[SRO No. 269-Ain/Aykar/2010, dated 1.7.2010]

Tax Rates for AY 2009-10 2010-11 nil 10% 10% 15% 20% 42.5% nil 10% 15% 35% 10% 15% 20% 42.5% 10% 10% 15% 20% 35%

- Transfer of stocks and shares of private limited

company
[S.R.O. No. 220-Ain/Aykar/2004 dated 13.07.2004]

Mobile phone operator companies

- Transfer of other capital assets (2) Dividend income (3) Other - Both for publicly traded and not publicly traded company income (1) Capital gain - Transfer of securities of listed company [SRO No. 269-Ain/Aykar/2010, dated 1.7.2010] arising out - Transfer of stocks and shares of private limited of
company
[S.R.O. No. 220-Ain/Aykar/2004 dated 13.07.2004]

- Transfer of other capital assets (2) Dividend income - Company being converted into a publicly (3) Other traded through transfer of at least 10% shares income

through stock exchanges, of which maximum 5% may be through Pre-Initial Public Offering Placement - For other company

Other company**

(1) Capital gain arising out of

- Transfer of securities of listed company

[SRO No. 269-Ain/Aykar/2010, dated 1.7.2010]

45% nil 10% 15% 20% 37.5%

45% 10% 10% 15% 20% 37.5%

- Transfer of stocks & shares of private limited company [SRO No. 220-Ain/Aykar/2004
dated 13.07.2004]

- Transfer of other capital assets (2) Dividend income - For publicly traded company *** (3) Other i. Dividend declared by less than 10% or income

failure to pay declared dividend within SEC stipulated time (60 days as per SECs SRO No.
385-Ain/91, dated 15.12.1991; 30 days from 9.2.2010 as per SEC Notification on same date)

ii. Other situation

All companies

- For other company (including local authority)

Minimum tax (Tk.)

27.5% 37.5%
5,000

27.5% 37.5%
5,000

I In Bangladesh, the principal direct taxes are personal income taxes and corporate income taxes, and a value-added tax (VAT) of 15% levied on all important consumer goods. The top income tax rate for individuals is 25%. For the 2010-2011 tax year the top corporate rate was 45%. However,

publicly traded companies registered in Bangladesh are charged a lower rate of 42.5%. Banks, financial institutions and insurance companies are charged the 42.5% rate. All other companies are taxed at the 37.5% rate. Corporate tax rates for industrial companies whose shares are publicly traded is 37.5% and the rate of those whose shares are not publicly traded is 45%. Tax rates on income of all other companies including banks, financial institutions, insurance companies and local authorities is 45%. Any income collected or gained by a company doing business in Bangladesh, whether resident or not is taxable. Corporate tax rates for industrial companies whose shares are publicly traded is 35% and the rate of those whose shares are not publicly traded is 45%. Tax rates on income of all other companies including banks, financial institutions, insurance companies and local authorities is 45%. Companies enjoying tax holiday are required to invest only 25% to 30% of their income in other activities as per rules of the National board of Revenue (NBR).
The standard rate of corporate tax in Bangladesh is 27.5% in 2010 - 2011 tax year. This is the standard corporate tax rate applicable to publicly traded companies in Bangladesh, a list including tax rates for other corporations are as follows: Publicly Traded Company Non-publicly Traded Company Bank, Insurance & Financial Company Mobile Phone Operator Company Publicly Traded Mobile Operator Company 27.5% 37.5% 42.5% 45% 35%

If any publicly traded company (excluding Mobile Operator Company) declares more than 20% dividend, 10% rebate on total tax allowed.

Special Reduced Corporate Tax Rates:

Following new industries (established between 01.07.2009 to 30.06.2012) have been prescribed for special reduced tax rates of 5 or 10 percent over first 5 to 6 years: Agro processing industry (fruits processing, baby corn packeting, fruit juice producing and rubber industry), textiles, spinning, textile machinery, garments and forward and backward linkages thereof, leather goods, toys, furniture, information technology, pharmaceuticals, light engineering, ceramic

or ceramic goods, melamine, plastic products, sanitary ware, steel, MS rod and CI sheet from iron ore, fertilizer, insecticide, pesticide, computer hardware, petro chemicals, agricultural machinery, boilers, drugs, chemicals, basic raw materials of drugs, compressors, ship building, diamond cutting industry, shrimp processing industry, milk processing industry, accumulator and battery industry, tour operators, energy saving bulb producing industry, industry producing goods from wastage, jute goods producing industry,

recycling industry, herbal medicine, basic chemicals and dyes, cosmetics and toiletries, tourism industry, foot wear, MS billet and any other category of industry as the government may by notification in the official gazette specify (SRO No. 172-Ain/Aykar/2009, dated 01.07.2009). The tax rates are applicable as follows: Dhaka and Chittagong Year Divisions (except for Rangamati, Bandarban and Khagrachari hill districts) 5% 10% 10% 15% Ordinary rate Rajshahi, Khulna, Sylhet, Barisal Divisions and Rangamati, Bandarban and Khagrachari hill districts of Chittagong Divisions 5% 5% 10% 10% 10%

1st and 2nd 3rd 4th 5th 6th

Tax holiday is allowed to industries subject to the relevant rules and procedures set by the National Board of Revenue (NBR) for the following period according to the location of the establishment.

Conclusion
Though the rate of tax revenue is to GDP is very negligible, despite the government is trying to maximize its tax revenue through different method. But the government should also remind the cannon of convenience while collecting tax from assesses. As we are living in a civilized society - should come forward to pay taxes to government in order to conduct the administrative, defense and development activities of the country. Otherwise we would not be able to prove ourselves as civilized people. Tax is the most important in the hand of the government to control the economy as well as the inflection. It also helps in push money to the economy, develop certain source of the economy and control some other activities of the economy. No Government can run its and perform administration works without collecting tax as a source of revenue. So, the Government imposes tax over the company and the corporations. On the other hand Government can also intensive to the infant and certain basic industry for protection through its tax policy