All eyes on Wednesday’s finance bill

People are waiting with bated breath to see what revision or changes the finance minister proposes for pushing the finance bill through parliament on Wednesday.

The bill will outline the changes, if any, in the excise duties on bank deposits and VAT proposals in the Tk 4.26 trillion budget the minister presented in parliament on June 1.

Except for one or two Cabinet colleagues, MPs across the divide in the House lashed out at AMA Muhith for raising excise duty on bank deposits on Tk 100,000 or above, and 15 percent VAT, which the MPs believe are 'irrational and anti-people'.

Muhith, however, dubbed the budget ‘best’ among his 11 and a ‘roadmap’ to the future progress and development of Bangladesh.

Of the total expenditure, Tk 2.48 trillion is expected to come from the revenue earnings. But, the proposed budget has a deficit of Tk 1.12 trillion, which is 5 percent of the GDP.

The finance minister wants to cover the shortfall with loans from internal and external sources. The budget is 17 percent larger than the previous year.

The new budget relies largely on collections under the new VAT law to generate a 35 percent growth in revenue earnings.

On Wednesday, when the parliament will have reconvened after the Eid-ul-Fitr recess, Leader of the Opposition Raushon Ershad and Leader of the House Prime Minister Sheikh Hasina would speak on the budget.

Based on the discussions in parliament, Hasina would propose certain amendments and changes to the finance minister. The finance bill will be passed with the amendments proposed by the finance minister.

The 84-year-old finance minister, who placed his ninth budget on the trot, had to face most criticism for his proposal to increase excise duty on bank deposits and the implementation of new VAT law from this fiscal.

Unfazed by the vehement opposition from the businesses, Muhith resolved to implement 15% VAT on commodities from the new fiscal beginning July 1.

He also proposed raising excise duty on Tk 100,000 deposit from Tk 500 to Tk 800.

Bank accounts with 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.

At the post-budget press conference on June 2, Muhith termed people with Tk 100,000 in a bank account as ‘wealthy’ in Bangladesh’s context and said the “enhanced excise duty on them is justified.”

He claimed the prices of commodities in the market would not go up because of the increase in the VAT.

He also said considering the interests of the business people, he had raised the ceiling of VAT exemption to Tk 3.6 million from Tk 3 million while turnover limit has been fixed at Tk 15 million from Tk 8 million.