Muhith defends excise duty on bank deposits

Defending his proposal for higher excise duty on bank deposits, Finance Minister AMA Muhith yesterday said it was simply that the annual tax, which had been in place for several years, was slightly increased for the next fiscal year. 

Excise duties on all types of bank deposits, including deposits under pension schemes and fixed deposits, have been increased on average 67 percent in various slabs.

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Replying to criticisms by Jatiya Party (JP) lawmakers over the tax burden on bank depositors, Muhith in parliament said, “It is no new tax. You have been paying this for several years. This time I have increased it slightly.”

He spoke on the matter before passing the supplementary budget for fiscal 2016-17.

JP lawmaker Kazi Feroz Rashid said tax was imposed on bank deposits while people were getting away with not repaying loans of thousands of crores of taka and smuggling the money abroad. 

“When the money is not repaid, the loan is waived. They [loan defaulters] do not face any trial.”

Referring to the scams involving BASIC Bank and Sonali Bank, Feroz Rashid said those responsible for the corruptions had not been tried. 

Those corrupt people are very powerful. Instead of bringing those to book, the government imposed levy on bank depositors, the JP lawmaker said.

He continued to say that the Opposition in the House had been turned into a puppet. “We act like puppets. Nobody considers us the opposition party.”

Other JP lawmakers also criticized the imposition of tax on bank deposits and other issues.

Responding to siphoning off money, Muhith said it was true that money was being smuggled out, but it was not possible to stop the money outflow completely. 

“What we can do is to lessen the opportunity for siphoning off money.  That means taking measures to stop creation of black money”.

The government is taking steps in this regard, which will be visible next month, the finance minister said.

Regarding remittance, Muhith said remittance inflow was not decreasing only in Bangladesh. Many other countries are experiencing a similar situation.

The government will take up a scheme in the next two to three months to ensure that remittance comes through official channels. The scheme will allow migrants to send remittance at lower cost.

Following a discussion, Tk 18,370-crore supplementary budget was passed in parliament.

In the revised budget for fiscal 2016-17, overall expenditure decreased from Tk 3,40,605 crore to Tk 3,17,174.

Though the annual spending is less than the allocation, some ministries have had bigger expenditures. 

As per the rules, if any ministry spends more, it will have to get permission from parliament.

The highest additional allocation, Tk 4,756 crore, has been given to the Vocational and Madrasa Education Division under the education ministry.

It was followed by Security Services Division under the Ministry of Home Affairs with an allocation of Tk 2,250 crore, science and technology ministry with Tk 2,143 crore and housing and public works ministry Tk 2,055 crore.

The ministries which got supplementary allocations below Tk 2,000 crore are the road, transport and bridges ministry that received Tk 1,166 crore, the defence ministry Tk 1,080 crore, disaster management and relief affairs ministry Tk 941 crore and local government division Tk 927 crore.