Muhith hints at changing excise duty on bank balance

Dhaka,  Wed,  27 September 2017
Published : 15 Jun 2017, 00:52:01 | Updated : 15 Jun 2017, 12:02:52

Muhith hints at changing excise duty on bank balance

FE Report

Finance Minister AMA Muhith hinted Wednesday at possible changes to the proposed hike in excise duty on bank-account balance that triggered widespread criticism.

"This is a budget proposal. I told it earlier that the issue will be discussed at the parliament and finalised then," he told newsmen after a meeting of the cabinet committee on public procurement at Bangladesh Secretariat.  

The minister said realising excise duty on bank-account balance was not a new addition this time. "Whatever you said -- excise duty or anything -- had existed there for a long period."

But, he added, now people have started talking about it since the rate is increasing.   

"You have started shouting over the excise duty as if it is something new. But, it's nothing new. It is the question of increasing rate," said the finance minister, who has proposed the increase in the duty on bank-account balance.      

"So, if there are changes, that will be in rate," he said.  

Placing next fiscal year's budget in parliament on June 01 the minister proposed to raise excise duty to Tk 800 from Tk 500 a year for a bank account having balance over Tk 0.1 million.

The proposal drew flak from middle-and lower-middle-income group of people as well as the economists, who said the move will discourage people from keeping money with the banks.

They said if the increased excise duty was charged, the depositors would get a negative return on the money they keep with the banks.

The finance minister also proposed to raise the excise duty to Tk 2,500 from Tk 1,500 on bank-account balance ranging between Tk 1.0 million and Tk 10 million.

In the past, people having bank balance over Tk 20,000 had to pay Tk 150 as excise duty per annum. However, in the proposed budget balance up to Tk 0.1 million has been exempted from the excise duty.

Apart from common people and economists, the Members of Parliament also sharply reacted to the proposed hike in excise duty. They have debated the issue in parliament almost every day since the budget was placed.

MPs criticises Muhith for proposed cut in savings tools

Meanwhile, adds: The government and the opposition MPs alike have voiced their dismay at proposed cut in interest rates on savings certificates and increase in excise duties on bank deposits.

The MPs came down on Finance Minister AMA Muhith in parliament on Wednesday and asked him to make decisions cautiously keeping the general elections in mind.

Ruling Awami League MP Tanvir Imam suggested creating substitute mediums of investments before cutting down interest rates on savings certificates.

"We need to value our potential voters of 2018 polls," said Tanvir, son of prime minister's adviser HT Imam.

MPs listen to the proposed national budget for fiscal 2017-18 being presented in parliament on Thursday.

On Jun 2, a day after presenting the national budget for FY2017-18, Muhith announced the interest rate on savings certificates would be lowered by two percent.

The decision will come into force within two months.

Another Awami League MP, Habib-e-Millat, suggested realising taxes from higher income group, not those with low income.

"The minister (Muhith) is bound to explain how the decisions will benefit people. Responsibilities cannot be ignored with words like 'rubbish' or 'shut up'," he said.

Highlighting the deficit in the Tk 4.0 trillion budget, opposition Jatiya Party MP Nurul Islam Milon doubted that it could be implemented.

"NBR (National Board of Revenue) lacks the capacity to collect such a massive amount of revenues. The finance minister is putting all the pressure on the people to make up for the deficits," he said.

"People are not happy with the budget as reported by the media. The positive sides of the budget are hardly being noticed because of these 15 percent VAT and increased excise duties."
Editor : A.H.M Moazzem Hossain
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