Remove excise duty on bank deposits: FBCCI

The Federation of Bangladesh Chambers of Commerce and Industry yesterday demanded full withdrawal of excise duty on bank deposits as there is a possibility of money outflow from the country if the levy is imposed.

Finance Minister AMA Muhith in his budget speech for fiscal 2017-18 proposed a 60 percent hike in excise duty on account balance between Tk 1 lakh and Tk 10 lakh and a 67 percent hike for more than Tk 10 lakh.

The move will leave savers with negative returns on their deposits in some cases, making people reluctant to keep their money with banks.

If the money goes out of the country through illegal channels, it will have a negative impact on Bangladesh’s lagging investment and employment fronts, FBCCI leaders said at a press conference at their office in Dhaka.

FBCCI President Shafiul Islam Mohiuddin also urged the government to reduce the source tax on garment export to 0.50 percent, as was earlier proposed to Muhith.

The garment sector has been passing through choppy waters because of precarious global political situation, he said in a joint statement that was signed by presidents of eight other chambers and trade bodies.

Moreover, the garment makers have already spent more than $1 billion for remediation and retrofitting of their factory units to enhance workplace safety as per the recommendation of the Accord and Alliance, he added.

The excessive bank borrowing by the government might hinder the normal flow of money to productive sectors, the country’s apex trade body said.

Muhith proposed borrowing Tk 28,203 crore from commercial banks to plug in the budget deficit.

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The FBCCI also requested the government to reconsider the uniform 15 percent VAT rate as many small enterprises will be affected by it.Meeting the ambitious revenue target set for the upcoming fiscal year would be difficult for the government due to the declining trend in two important sources — remittance and export earnings.

Moreover, agricultural crops were badly damaged in some districts due to flash floods, Mohiuddin said. He also suggested the government cut the corporate tax for companies and withdraw it entirely for e-commerce businesses.