Tax on export at source, VAT on higher education cut as Finance Bill passed

The Finance Bill-2015 has been passed in Parliament with several amendments to the budget proposed for the 2015-16 fiscal.

Through this, Finance Minister AMA Muhith’s proposal to levy 1 percent tax at source on all export products including readymade apparels will be lowered to 0.6 percent.

The tax at source for the apparel sector is 0.3 percent in 2014-15 fiscal year.

The value added tax (VAT) on all private universities, medical colleges and engineering colleges will also be cut down to 7.5 percent from proposed 10 percent in the new budget.

Both changes came after Prime Minister Sheikh Hasina suggested some amendments that included these two during a discussion on the proposed budget on Monday.

Muhith said, “The changes the prime minister suggested to the budget I proposed will surely be carried out.”

The Finance Bill was passed in presence of Leader of the House Hasina and Leader of the Opposition Raushon Ershad during the session chaired by Speaker Shirin Sharmin Chaudhury.

The finance minister had placed the Tk 3 trillion budget for the next financial year and the bill in Parliament on June 4.

During Monday’s session, several MPs including Awami League’s Suranjit Sengupta, ASM Feroz, Amir Hossain Amu, Jatiya Party’s HM Ershad and Raushon spoke on the budget.
 
Then the prime minister recommended some changes to the budget.
 
Later, the Bill was passed by voice vote after the finance minister tabled it, accepting the suggestions made by Hasina.
 
The Tk 3 trillion proposed budget will be passed on Tuesday in Parliament. It will take effect from July 1, the first day of the 2015-16 fiscal.

The suggested changes
 
In the outgoing fiscal ending on June 30, 0.3 percent tax at source was cut for RMG exports and 0.6 percent for others.
 
The finance minister had proposed to charge 1 percent tax at source on all exports including readymade apparels.
 
But the prime minister on Monday called for cutting the tax by 0.4 percentage points and told Muhith, “Please give the scope this year, you can increase it later if business is good.”
 
Until now, a 7.5 percent VAT was applicable for English medium schools, while private universities, medical colleges and engineering colleges did not have any VAT on them.
 
The budget proposed imposed a 10 percent VAT on them. 
 
However, the BNP and some ruling party leaders criticised the move and urged for its withdrawal. 
 
Hasina Monday did not ask to withdraw it, but urged Muhith to cut it down to 7.5 percent.
 
She also called for taking steps to increase research on utilisation of marine resources.
 
The prime minister urged withdrawal of all taxes on raw materials for cancer medications and rebate on Hepatitis C preventives and raw materials for herbal medicine.  
 
The prime minister also pointed out that the poultry and fisheries sector were working to meet nutritional needs of the nation.
 
“The finance minister has proposed to impose tax on income from the poultry industry. I will urge him to keep it tax-free until Tk 1 million. Five percent tax could be deduced on incomes ranging from Tk 2-3 million and 10 percent on incomes above that.”
 
She also urged Muhith to treat the fisheries sector in the same manner.
 
The finance minister had proposed 3 percent tax on income from poultry sector up to Tk 1 million, 10 percent on income from Tk 1-2 million and 15 percent on income above Tk 2 million.
 
The fisheries sector earnings were to be taxed similarly.