The government Saturday withdrew the proposal to provide special provisions facilitating the investment of undisclosed money in the country’s real estate sector, citing possible increases in land and apartment prices as the cause.
“Prime Minister Sheikh Hasina advised me to drop the proposal, as more investment is likely to go to unproductive sectors and increase land prices,” Finance Minister AMA Muhith told parliament on Saturday.
The Finance Bill 2013 was passed in parliament Saturday amidst a walkout by opposition members.
In the budget for the 2013-14 fiscal, Muhith had proposed special tax rates for unsourced legal income, if it was used to build or buy buildings or apartments in Dhaka and Chittagong. By payment of this relatively small tax, the government would consider the source of the funds explained.
In general, owners of undisclosed money are allowed to legalise it by investing in a productive sector through payment of a 10% penal tax, in addition to normal taxes.
The changes came after Prime Minister Sheikh Hasina, in her concluding speech on the budget, asked the finance minister to consider making revisions to his budget proposal, such as the import tax on newsprint paper and investment of undisclosed money in real estate.
The prime minister, in her speech, brought up nine issues including undisclosed money in real estate, import tax on plastic products, tax on tobacco products, essential drug import, import tax on raw materials and the import of fire safety instruments.
In his finance bill discussion yesterday, the finance minister said: “The proposal of imposing a 25% import duty and 5% supplementary duty on newsprint is being withdrawn, replaced by a 10% import duty, as the prime minister advised me to soften the stand for the development of the country’s newspaper industry.”
Import duties on printing plates were set to 2% in the bill.
Import duties of intermediate raw materials and other items were reduced to 10% from the proposed 12%, while 10% regulatory duties on 43 import items were also withdrawn as per the prime minister’s request.
The annual turnover tax for small traders, retailers and shopkeepers in the third and fourth brackets were reduced to Tk8,000 from the originally proposed Tk9,000 and Tk11,000 from the proposed Tk12,000, respectively.
Supplementary taxes on Bidi – 10% on non-filter and 5% on filter – were withdrawn. According to the bill, advance tax on import of two cancer medicines – Imatinib Capsule (Glivee) and Nilotinib – have been dropped.
Import duties of mild steel wire rods were reduced to 5% from the proposed 10%, and import duty on woven fabric was reduced to 60% from the proposed 100%.
Tax at source on distributors was reduced to 5% from proposed 10% and the VAT on aluminium and home appliances was withdrawn. The government also withdrew the proposed 10% import tax on LEG lamps.
To protect the country’s shipping industry, in the budget speech finance minister had proposed a 10% import tax for imported 3000-5000DWT ships. In the finance bill, this was changed to a 25% import tax on only 5000DWT ships.
In the finance bill, the government recast the import tax structure of the backward linkage industries HR coil and CR coil. Additionally, to ensure the fire safety of the garment industry, the government reduced import tax on fire safety instruments to 5% from a proposed 10-15%.
The government also scrapped the deputy tax commissioners’ power to order a person not to transfer their wealth, according to the finance bill.
