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ACCORDING to the President’s Act 1975 (Remuneration and Privileges), as amended up to 2016, Section 3, the president’s salary is exempt from income tax. The president currently receives a monthly salary of Tk 120,000, entertainment allowance at actuals, fully furnished and maintained residential accommodation and government coverage for electricity, gas, water and telephone bills. Additionally, the state bears the cost of transport and travel for both the president and their family, along with expenses for domestic and overseas tours and full medical coverage. For the financial year 2023–24, the total allocation for the president’s office stands at Tk320 million, as reported by the Finance Division, Ministry of Finance. A discretionary grant of Tk 20 million annually is also provided, subject to conditions (Section 7), though the president retains significant flexibility in how these funds are spent.

Furthermore, customs duties and value-added tax (at the import stage) on personal items, foodstuffs, motor cars, rivercraft, or aircraft are exempted under Section 8, alongside development surcharges.

In India, however, the President’s Emoluments and Pension Act 1951 (amended in 2008) and the Indian Constitution do not grant such blanket exemptions. The president’s income is taxed under the category of ‘income from other sources’, as the role is not considered employment per se — the president is not an employee in the conventional sense, as there is no employer with the authority to terminate them. While tax is not deducted at source, the president must file tax returns under self-assessment. Any interest from fixed deposits, dividends from investments, or profits from business activities is also taxed like any other citizen.

Thailand offers a partial contrast. Although royal family property is subject to taxation, exemptions apply for lands and establishments used for state affairs, royal duties, public interest, or religious purposes. The Crown Property Bureau controls over 16,210 acres of land with more than 40,000 rental contracts across the country. The monarch also holds equity in numerous companies and banks worth over $7 billion, with personal wealth exceeding $30 billion — reportedly the world’s richest monarch. The income from these assets — rents, business profits, dividends, interest and capital gains — is subject to standard taxation, including corporate and personal income tax and capital gains tax.

Pakistan’s legislation once mirrored that of Bangladesh, with the president’s salary formerly exempt from income tax under the 1975 Remuneration and Privileges Act. However, this provision was repealed through the Salary, Allowances and Privileges Act 1997. Now, the president pays income tax like other citizens. Another difference lies in customs duty and VAT: Pakistani presidents enjoy exemptions only up to a ceiling of Rs200,000, unlike in Bangladesh where no such cap exists. Pakistan has aligned its taxation laws for high offices with global norms.

In the United Kingdom, despite the monarchy being a constitutional symbol, members of the royal family pay income tax on personal earnings — including those from private estates, investments and savings — as well as capital gains and inheritance taxes, with limited exemptions. The Sovereign Grant Act 2011 stipulates that public funds provided for royal duties are sourced from property profits which are surrendered to the Treasury. There exists a Memorandum of Understanding between the Treasury and the Royal Household, outlining tax arrangements, further reinforcing transparency and accountability.

The Netherlands is considering a constitutional amendment to remove the current exemption from income, inheritance, gift and property tax for the royal family’s public allowances (Article 40). This proposal has already received two-thirds majority support. Parties in favour now control 112 out of 150 seats in the House of Representatives and at least 50 of the 75 in the Senate (Politico, 19 January 2024). In other constitutional monarchies such as Sweden, Japan, Canada and Spain, royal family members are subject to various taxes in accordance with national laws. Norway remains an outlier: the King is exempt from wealth tax, receives no salary from the state and his property passes on to heirs without inheritance tax, as such taxation has been abolished.

Historically, royal immunity from taxation was rooted in the logic that it made little sense to transfer money from the Crown to the Crown. As cited in Advocate-General v Garrioch (1845) and reiterated in ‘Finances of the Monarchy’ (House of Commons Library, 2024), such immunity reflected the monarch’s status as the source, not subject, of fiscal law. However, voluntary payment of taxes, especially during wartime or financial crisis, was often considered a patriotic act rather than a legal obligation. Parliamentary statutes have, on occasion, imposed tax liability explicitly, indicating that immunity has never been absolute or immutable.

In some absolute or semi-constitutional monarchies, this historical immunity persists. Bhutan’s Constitution exempts the royal family from taxes on annuities and properties (Article 13). In Jordan, the King’s income from property and personal customs imports are tax-exempt under Article 4 of the Jordanian Income Tax Law (2018). In oil-rich Gulf monarchies such as Oman and Saudi Arabia, there are no personal or property taxes at all, although corporate income tax and VAT apply to businesses.

It is important to understand that taxation is not a punitive act — it is not about ‘being taxed’ as a burden, but about sharing civic responsibility. Taxes fund public services: education, healthcare, transport, infrastructure, parks and policing. They reflect the social contract between citizen and state. Tax obligations are tied not to privilege or status, but to one’s financial ability to contribute. Nobel laureates, police officers, teachers and even charitable institutions pay taxes on eligible income — this is the principle of equity.

In Bangladesh, the current tax-free threshold for male individuals, including exemptions, is Tk 800,000 annually (Tk 450,000 in exempt income plus Tk 350,000 in rebate). The president’s salary alone totals Tk 1,440,000 annually — excluding allowances, perquisites and discretionary funds. By any standard, this is taxable income. Even retired citizens and freedom fighters must pay tax if they exceed the exemption limit. Meanwhile, even a low-income citizen pays VAT on imported goods — many of which are semi-essential — facing customs duties and indirect taxes.

There are, however, signs of positive change. Judges of the Supreme Court — once exempt from income tax under the 1978 Ordinance — are now taxed under the 2016 revision of the relevant Act. The Chief Justice, Appellate Division judges and High Court judges are no longer granted this special privilege. It is reasonable to ask why a similar principle should not apply to the president.

The exemption granted under the 1975 Act is not in step with modern governance. It stands as a symbolic and financial relic of an outdated political logic — one that sees the head of state as above the obligations of the citizens they represent. For a democratic republic aspiring towards equality and accountability, there is no justifiable reason why the president should remain exempt from taxation.

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Dhiman Chowdhury is a professor of Accounting at the University of Dhaka