The government is set to revise the proposed rates of excise duty on depositors’ bank balance and the excise duty slabs amid strong criticisms against the proposed duty structure.
The National Board of Revenue may lower the rates of excise duty significantly for small-scale depositors and create a new slab for the amount of bank balance from Tk 1 lakh to Tk 5 lakh by splitting the current slab for Tk 1 lakh to Tk 10 lakh, officials said.
They said that the amount of excise duty might be set at Tk 150 for the new slab.
In the proposed budget for the upcoming fiscal year of 2017-18, the excise duty has been set at Tk 800 for the bank balance, debit or credit, from Tk 1 lakh to Tk 10 lakh.
Finance minister AMA Muhith in his budget speech proposed to make the duty rate almost double for the FY 2017-2018 that sparked severe criticisms among savers, economists and bankers.
They said that the principal amount of depositors would become less than the actual deposit due to the proposed hike in duty as the interest rate on deposits declined significantly as low as 4 per cent.
The decision also created panic among the depositors and many depositors withdrew their deposits from banks.
Muhith, however, proposed to waive the duty for bank balance up to Tk 1 lakh, which is currently Tk 20,000.
Officials said that the duty might be reduced by Tk 200 from the proposed Tk 800 on balance above Tk 5 lakh to Tk 10 lakh to keep the main deposit amount safe.
The duty slab for balance above Tk 10 lakh may remain unchanged, they said.
They said that the aim of the revision was to provide some relief to small-scale savers.
In the proposed budget, the government increased the excise duty to Tk 2,500 from the current Tk 1,500 on bank balance between Tk 10 lakh and Tk 1 crore.
Muhith proposed to increase the duty to Tk 12,000 from the current Tk 7,500 if the balance exceeds Tk 1 crore but remains below Tk 5 crore while Tk 25,000 would be deducted as excise duty if balance exceeds Tk 5 crore.
Currently, the excise duty for the slab is Tk 15,000.
According to the Excise and Salt Act, the excise duty is deducted once a year if the balance exceeds the slabs.