These are some of the highlights of the 2005-06 budget Finance Minister Saifur Rahman is scheduled to propose today in parliament.

In view of the poor import tax collection, the government is giving special emphasis on VAT, income tax and supplementary duty to collect an additional Tk 6,500 crore, an NBR source said.

In the current budget, the government set a fixed tariff of Tk 1,500 on each mobile set against an earlier tariff of Tk 3,000 to Tk 4,000 depending on their prices.

Given the rapid growth in the number of mobile phone subscribers in the country, the government is expected that the tariff cut would not affect its revenue income. But the bulk of the mobile sets is smuggled in, depriving the government of its expected tariff earnings.

At present, there are more than 5 millions cellphone subscribers and the growth rate of the subscribers is about 100 percent. The five mobile companies are aiming to raise the number of mobile phone users to 15 million by the next year.

Taking advantage of the low prices and lucrative offers by the mobile companies, many users are using two SIM cards in one mobile, which is why the government is planning to impose a tax of Tk 1,500 for each SIM.

If parliament approves the government plan, the price of each SIM card may go as high as Tk 2,000 against a paltry Tk 75 to Tk 300 now.

The scope for making black money white is going to be over at the end of this month. The finance minister on different occasions said this provision contradicts the anti-money laundering law as well as the spirit of the constitution of Anti-corruption Commission.

But at the last moment, the government is going to extend the period by another year, arguing that this would encourage investment.

The government is raising the ceiling of zero tax from the existing Tk 100,000 up to Tk 120,000. The decision will be announced in the upcoming budget but the new ceiling is expected to be enforced from the fiscal year 2006-07.

The government's recent pay hike for the public servants, believed to push up the pay scale in the private sector too, as well as the present inflation rate are making the government to re-fix the zero tax ceiling, sources said.

The tax holiday facility is going to be restricted to just 12 sectors, including fertiliser, medicine, steel, textiles, garment and ceramics.

The government expected a 26 percent growth in the total NBR tax through collection of import taxes in the current fiscal year, but in reality the growth has been recorded much below at 11 percent the last 10 months.

This experience is forcing the government to set a target of 13 percent growth in import tax in the coming budget.

The growth target in income tax collection for the next fiscal year would be set at 23 percent and in case of VAT and supplementary duty, the target would be 18 percent.

The government also aims to curb tax evasion, bring new sectors under the tax net, and change the laws in the upcoming budget in a bid to collect additional revenue.