The government is contemplating increasing excise duty on bank accounts with significant balances in an attempt to increase revenue collection for the next fiscal year, as well as pave the path for recovery of the country's Covid-19-affected economy.
Officials at the finance ministry, requesting anonymity, said bank account holders whose balance was more than Tk10 lakh at any time of the year would see a 20% increase on excise duty from the upcoming 2020-21 fiscal.
Currently, account holders with bank balances exceeding Tk10 lakh but less than Tk1 crore any time during a year face a Tk2,500 deduction as excise duty by banks in line with government rules.
The rate of excise duty goes up to Tk12,000 per account per year for balances upwards of Tk1 crore but less than Tk5 crore.
The excise duty goes up to Tk25,000 per account in case debit or credit balances in the account exceeds Tk5 crore any moment, according to the National Board of Revenue (NBR).
Those who have up to Tk1 lakh balance at any time during a year, are exempted from excise duty, while those with a balance between Tk1 lakh and Tk5 lakh have to pay Tk150 excise duty annually.
Bankers deduct Tk500 as excise tax from accounts with debit or credit balances from above Tk5 lakh to Tk10 lakh.
Officials said the excise tax rates for account balances of up to Tk10 lakh are unlikely to change to give relief to lower-middle-income people, many of whom suffered income losses and salary cuts as economic activities halted amid the coronavirus pandemic and the countrywide shutdown.
Until December 31, last year, there were 10.65 crore bank accounts and Tk12.14 lakh crore in balance.
And only 1% of the account holders had more than Tk10 lakh in deposits in their accounts. And in terms of balances, these accounts accounted for 71% of the total deposits, according to data from the Bangladesh Bank.
