Excise duty on bank accounts won’t hurt the poor: Muhith

Finance Minister AMA Muhith has said the poor will not take a hit from the increased excise duty on bank account balance.

There’s no excise duty on balance of less than Tk 100,000, Muhith said citing one of his proposals in the new budget, at a media briefing in Dhaka.

Muhith spoke to the media at Osmani Memorial Auditorium. Industries Minister Amir Hossain Amu, Agriculture Minister Matia Chowdhury, Planning Minister AHM Mustafa Kamal and State Minister for Finance and Planning MA Mannan were with the finance minister.

Earlier in the day, the Centre for Policy Dialogue criticised increased excise duty on bank accounts.

While it was done by the government for a revenue boost, the new move will act as disincentive for those using banking channels in times of falling interest rates on savings, the CPD said.

The proposal of increasing the excise duty from Tk 500 to Tk 800 a year, for example, on account balance of more than Tk 100,000 drew criticism from a wider spectrum of society. It will hurt small savers.

In the proposed budget, Muhith expanded excise duty waiver on bank account balance, but it has to be less than Tk 100,000.

Currently, account holders pay Tk 150 annually on balance ranging from Tk 20,000 to less than Tk 100,000. Accounts with less than Tk 20,000 enjoy duty waiver.

Muhith believes those who have at least Tk 100,000 in bank accounts are well-off, which means they are capable of paying excise duty.

Muhith proposed to increase the duty to Tk 2,500 from Tk 1,500 on account balance ranging from Tk 1 million to less than Tk 10 million.