Withdrawal of excise duty on bank balance demanded [ Tritiyo Matra News ]

Withdrawal of excise duty on bank balance demanded

Local June 04, 2017

Economists and businesspeople on Saturday criticised the proposed increase in excise duty on bank balance and demanded withdrawal of the duty to give relief to the small bank account holders and encourage financial inclusion in the country.
At a discussion on ‘Budget 2017-18: instant views of the business community’, they said that the proposed budget lacked any clear directions on improving investment environment reducing cost of doing business and increasing ease of doing business.
Metropolitan Chamber
of Commerce and Industry organised the discussion at Lakeshore Hotel in Dhaka.
Finance minister AMA Muhith in his budget in the parliament on June 1 proposed to hike the existing excise duty on bank balance above Tk 1 lakh in various slabs.
Bank account holders will have to pay Tk 800 instead of Tk 500 if the balance in accounts exceeds Tk 1 lakh at anytime in a year.
Bangladesh Bank former governor Mohammad Farashuddin said that it would be better for the government to withdraw the duty as there was no justification for imposing tax on the sector.
He sought strong regulations on mobile banking saying that fund transfer, even money laundering, was taking place through the mobile banking.
State minister for finance and planning MA Mannan said that the excise duty was always there.
The government rather proposed withdrawal of the duty for the small account holders having bank balance below Tk 1 lakh, who represented about 80 per cent of bank account holders.
‘However,’ he said, ‘I understood the spirit of the discussion and would carry the message back to the high-ups. Hopefully, the government will consider the issue.’
Policy Research Institute executive director Ahsan H Mansur said that there was no need to hike excise duty on bank balance rather it was supposed to be withdrawn.
‘The NBR keeps some provisions to ambush sometimes and hiking excise duty is such an ambush,’ he said, adding that the move harmed the image of the government.
He also said that there should be no VAT on English medium schools.
He said that it would be better if the budget gave some clear directions on improving investment climate which was important for private investment as well as economic growth.
MCCI president Nihad Kabir said that the increased excise duty on bank accounts was unwarranted and against the concept of financial inclusion.
She said that unchanged tax-free threshold and tax rates for individuals would affect the low- and middle-income people who would be facing overall higher taxes.
The MCCI is also disappointed that the corporate income tax was not reduced, she said.
Policy Research Institute chairman Zaidi Sattar, International Chamber of Commerce, Bangladesh president Mahbubur Rahman, former MCCI president Syed Nasim Manzur, MCCI tariff and taxation sub-committee immediate past chairman Adeeb H Khan, Bangladesh Institute of Development Studies senior research fellow Nazneen Ahmed, among others, spoke at the programme.