New budget likely to see some vital amendments
Published : Saturday, 24 June, 2017 at 5:43 PM Count : 474
The government is likely to amend some provisions in the proposed budget for fiscal 2017-18, particularly the issues relating to the much-talked-about excise duty on bank accounts and implementation of new VAT law.
According to sources at the Finance Ministry and National Board of Revenue (NBR), the excise duty on bank accounts will remain the same for small depositors and transactions. "That means the excise duty will be Tk 500," an NBR official told UNB.
In the proposed budget, the excise duty has been increased to Tk 800 for bank balance above Tk 1 lakh and the duty will be deducted once a year if the account balance exceeds Tk 1 lakh any time of that year. Currently, bank account balance of up to Tk 20,000 is exempted from the excise duty. The government raised the exemption ceiling of the excise duty to Tk 1 lakh from Tk 20,000 in the proposed budget.
Another source at the Finance Ministry said the excise duty may be fixed at Tk 150 for bank account balance, whether debit or credit, above Tk 1 lakh to Tk 5 lakh.
As per the proposed budget, the excise duty will be Tk 12,000 instead of Tk 7,500 for bank account balance between Tk 1 crore and Tk 5 crore while Tk 25,000 instead of Tk 15,000 if bank account balance exceeds Tk 5 crore.
On the other hand, the process is all set to postpone the enforcement of the new VAT and Supplementary Duty Act 2012 for at least one year.
"A high-level meeting of the Prime Minister, the Finance Minister, the Finance Secretary and the NBR Chairman was held at the PM's office in Parliament in this connection and the meeting decided to continue with the existing VAT law," the NBR high official said.
The NBR tried to find other alternatives, but the PM preferred sticking to the existing VAT law enacted in 1991.
The lawmakers in Parliament -- from both treasury and the opposition benches -- opposed the law that imposes 15 percent VAT on all services and products.
The Finance Bill-2017 is expected to be passed by Parliament on June 28, 2017.
Changes in proposed excise duty and VAT rates might be announced by the Prime Minister (PM) on the day.
According to the data from the Bangladesh Bank, the number of bank accounts in the country is 8,99,41,426.
Of the total number, 72,63,959 accounts are from Tk 25,000 to Tk 1 lakh, the number of accounts with a range of Tk 1 lakh to 2 lakh is 33,62, 914, the is 13,80,965 with Tk 2-3 lakh, 7,91,892 accounts with Tk 3-4 lakh, 5,63,603 accounts with Tk 4-5 lakh, 12,17,495 accounts with Tk 5-10 lakh.
Besides, the number of accounts with above Tk 10 to Tk 25 lak is 6,76,712, while with Tk 25-50 lakh range is 1,96,431.
There are 60,539 accounts with Tk 50-75 lakh, 51,781 accounts with Tk 75 lakh to Tk 1 crore, the number is 7,666 for the accounts with Tk 5-10 crore, 2,420 accounts with Tk 10- 15 crore, 1,214 accounts with Tk 15-20 crore while the number of accounts with Tk 50 crore and above is 769.
NBR sources said although the government is going to postpone the implementation of the VAT law, but it will expand the VAT net with amending the existing VAT law. "Emphasis will be given on the automation process," the sources added.
In the proposed budget, the target from this sector has been fixed at Tk 91,254 crore which is 25.42 percent higher than the previous year.
"The VAT collection might fall short of Tk 20,000 crore due to the non-implementation of the new VAT law," the NBR official said.