Finance Minister Muhith hints at altering excise duty rates on bank accounts amid criticism

Finance Minister AMA Muhith, after being flayed over his proposal to increase excise duty on bank deposits, has hinted that the rates may be revised down.

The minister brought up the matter during an agreement-signing ceremony among his ministry’s Financial Institutions Division and banks at the Secretariat on Sunday.

The rates will be changed to some extent as there is so much of a public outcry over this, Muhith said.

“I am clearing this now to calm people down. It will finally be discussed in parliament on Jun 28.”

The minister also hinted at changing the name ‘excise duty’ which “is actually an income tax.”

“This tax is nothing new. Anyone with a saving of Tk 20,000 was previously bound to pay the tax. Now there will be no tax on savings less than Tk 100,000,” he said.

“Already a lot of discussions have been done on this. The budget is a proposal. Many of the proposals are altered while implementation,” he said.

The budget for FY2018, for example, proposed to increase excise duty to Tk 800 from Tk 500 on accounts with balance of Tk 100,000 or more, which drew sharp criticism from several quarters, including trade bodies and economists.

Traders, bankers and economists apprehend that the decision might inspire people to opt for illegal ways of money transactions.

Several MPs, both from the ruling party and the opposition, have already called on the finance minister to reverse his decision.