VAT law suspended, new excise duty slabs in budget

VAT law suspended, new excise duty slabs in budget

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Dhaka, Jun 28 – The Finance Bill 2017 was passed in Parliamenton Wednesday with some major changes to the VAT Law and excise duty on bank accounts.The proposed VAT law will be suspended for the next two years while there will be new slabs for imposition of the excise duty on bank deposits.
About the VAT law, Finance Minister AMA Muhith said the suggestions of the Prime Minister and other MPs to defer the implementation of the VAT law for two years have been considered and there will be some changes to the existing VAT law which was enacted in 2012.
Talking about the excise duty on bank accounts, he said he had originally proposed widening the duty-free ceiling from Tk 20,000 to Tk 1 lakh. “Actually, this duty has been imposed since 2002.”
Joining the budget discussion, Prime Minister Sheikh Hasina also urged the Finance Minister to restructure the excise duty slabs.
Muhith said the excise duty-free ceiling will be up to Tk 1 lakh. An excise duty of Tk 150 will be imposed on amount ranging from Tk 100,001 to Tk 5 lakh, he said.
For Tk 500,001 to Tk 1000,000, it will be Tk 500 while the excise duty will be Tk 2,500 for Tk 1000,001 to Tk 1 crore, and Tk 12,000 will be imposed for over Tk 1 crore to Tk 5 crore while the rate will be Tk 25,000 for above Tk 5 crore.
The Finance Minister also withdrew the proposed 2 percent VAT on meditation, included the manufacturing of computer, cellular phone and its parts in the VAT waiver list and exempted VAT on local motorcycle manufacturing.
He also reduced the supplementary duty from 30 percent to 20 percent on manufacturing and assembling refrigerators, withdrew the VAT on the import of plastic and glass fibre- made LPG containers, but kept the existing VAT on the iron LPG containers.
Muhith scrapped the proposal to slap extra duty on solar panels as the country is still dependent on the import.
He proposed imposing 10 percent income tax on green RMG factories while 12 percent on others factories.
About the interest rate of national savings certificates, the veteran minister said he did not place any proposal in the budget speech to reduce the interest rate. “It’s under our active consideration so that no person enjoying pension benefits, no low-middle income or middle-income person is affected due to the fixation of interest rate of national savings certificates,” he added.
The savings certificates worth Tk 42,098 crore were sold till April last though the government’s target to get loan from savings certificate was only Tk 19,610 crore for the outgoing fiscal year, he added.
Noting that a small number of elderly citizens are now under pension benefits in the country, Muhith hoped that the government will be able to introduce a national pension scheme next year.
Reminding his claim made while placing the budget in the House that his 11th budget would be the best budget in his life, he said, “I’m truly claiming that it’s a very good budget proposal and the best budget in my life as the proposal was placed today after a long discussion and debate taking approval and suggestions of the Prime Minister. This has made this budget rich and people-friendly one,” he said.
Opposition bench members Fakhrul Imam, Nurul Islam Omar, Kazi Feroz Rashid and Nurul Islam Milon proposed publishing the bill for eliciting public opinions till June 30, while JP MP Begum Rawshan Ara Mannan proposed August 31, 2017.
Independent MP M Rustom Ali Farazi proposed publishing the bill for seeking public opinions till July 20, 2016.
The Finance Minister moved the bill which was passed by voice vote. The bill was introduced in the House on June 1.
Before the passage of the bill, Muhith joined the general discussion on the proposed budget for 2016-17 fiscal year.
Besides, members from the opposition bench, including Fakhrul Imam, Nurul Islam Omar, Kazi Feroz Rashid and Pir Fazlur Rahman, proposed some changes to the bill. Later, the proposals for publishing the bill for eliciting public opinions and amendments were rejected by voice vote. The House accepted some amendments of the Finance Bill, 2017 brought by MPs M Shahiduzzaman Sarkar of (Naogaon-2) and Md Shahab Uddin (Moulvibazar-1).

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