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CAB seeks PM's intervention to reduce tax on savings tools

  • Published at 09:55 pm June 22nd, 2019
CAB seeks PM's intervention to reduce tax on savings tools
CAB President Ghulam Rahman speaks at a press conference on the proposed budget for 2019-20 at DRU on Saturday Dhaka Tribune

'There’re provisions of realising 5, 7.5, and 10% VAT apart from unified 15% one which will force consumers to pay extra tax'

The Consumers Association of Bangladesh (CAB) on Saturday urged the prime minister’s intervention to reduce tax on source of savings certificate. 

The government plans to increase tax to 10% from existing 5% on the proceeds from the tools.

The demand came at CAB’s post-budget press conference, held at the Sagar-Runi Auditorium of Dhaka Reporters Unity (DRU), yesterday.

CAB president Ghulam Rahman said that the problem of banking sector can not be solved by doubling the tax on source of savings certificate. We want to intervention of the prime minister for this issue.

“The government is helping some retired and low income people by allowing them to invest in saving certificates, so increasing tax will not be fair.” he said. 

Finance Minister AHM Mustafa Kamal on Thursday placed the budget before parliament, where he said spoke on digitalization of saving tools management but did not say anything about the tax increase.

However, the budget document (Finance Bill for FY2019-20) said that tax at source (TDS) would be 10% on profit from saving tools.

Nation Board of Revenue (NBR) officials said the rule was supposed to be effective from July 1.

Currently people are getting various types of profit rates based on tools category — family savings certificate offers 11.52% profit, pension savings 11.76%, five-year savings certificate 11.28%, three-months profit-based saving certificates 11.04%, and the three-year post office savings certificate offers 11.28%.

Energy advisor of CAB Prof Shamsul Alam and its secretary Humayun Kabir Bhuiyan spoke on the event.

The non-governmental consumer organisation also urged the government to keep all essential commodities out of VAT net for the interest of fixed income consumers.

The CAB called for a discussion in the parliament on import duty surge on essentials like sugar, powdered milk and edible oil in the proposed budget for the fiscal year 2019-20. 

CAB President Ghulam Rahman said that the government has taken steps to implement the VAT Act-2012 in the 2019-20 fiscal year.

“There’re provisions of realising 5, 7.5, and 10% VAT apart from unified 15% one which will force consumers to pay extra tax,” he said.

VAT has been proposed on some essential goods, including edible oil, he said. 

“So, their prices will go up. We hope the government will keep daily essentials out of the purview of the VAT law after discussions in Parliament.” Ghulam Rahman added.

At the event, the consumer has lifted the VAT from essential commodities, taking action to ensure that the VAT vouchers offered to the government treasury, increase the tax-free income limit, ensure the security of the customer's deposit in the bank and establish a ‘Consumer Affairs Ministry’.

CAB president said that dissatisfaction will increase if the incomeis not less than double of people. Income difference will increase between rich and poor. Income inequality is increasing in the country. Needed to control it.

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