Awami League MP urges Muhith to reverse his decision on excise duty on bank deposit

An Awami League lawmaker has asked Finance Minister AMA Muhith 'not to be stubborn' and to reverse the decision to increase excise duty on people's savings in banks.

MP Abdul Mannan made the call in parliament on Monday during a general discussion on the FY2018 budget presented on Jun 1.

“Awami League works for people and people, do not want this heightened excise duty on their savings,” he said referring to Muhith’s remarks in Sylhet.

While speaking to the media in Sylhet on Thursday, the finance minister reiterated that the proposed excise duty on bank deposits and uniform 15 percent VAT would not be revised.

The budget, which was Muhith’s 11th, proposes to increase excise duty to Tk 800 from Tk 500 on accounts with a balance of Tk 100,000 or more.

Bank accounts with the balance between Tk 1 million and Tk 10 million will be charged Tk 2,500 instead of Tk 1,500.

Accounts that have deposits between Tk 10 million and Tk 50 million will be charged Tk 12,000 instead of Tk 7,500.

The excise duty on accounts holding over Tk 50 million will be raised to Tk 25,000 from Tk 15,000 now.

The proposals would be effective from Jul 1 if the parliament passes the budget without any revision.

Traders, bankers and economists are speculating that the decision might inspire people to opt for illegal mediums of money transactions.

Mannan said in parliament that the proposal to raise of excise duties had created unease among people.

“Many are checking with their banks like how much they would end up with if they deposit money in savings accounts. We need to calm them down by withdrawing this decision,” he said.

Another ruling party MP, AKM Abdul Awal, noted that even the farmers and rural women have savings around Tk 100,000.

“If we raise the duties in such circumstances then it may backfire. The election is nearing; we should keep that in mind. There is no logic in doing something that may adversely affect people,” he said.

Chandpur-based lawmaker Shamsul Hoque Bhiuyan however, spoke in support of the proposal.

Abdul Munim Chowdhury from opposition Jatiya Party proposed not to cut down interest rates of Sanchaypatra (savings certificates).