On 29 June 2017, the parliament of Bangladesh has passed a Tk 4,00,266 crore national budget with some changes to the excise duty on bank accounts and Value Added Tax (VAT) proposals for the fiscal year 2017-18.
On 1 June 2017, the Finance Minister, Mr. Abul Maal Abdul Muhith presented the annual national budget with targeted a GDP growth rate of 7.4 per cent.
In accordance with the budget for fiscal year 18, Taka 2,41,253 crore has been allocated for non-development expenditure along with other expenses and Taka 1,53,331 crore has been earmarked for Annual Development Programme (ADP). The target of overall revenue collection for the next fiscal has seen set at Taka 287,990 crore of which Taka 248,190 crore will come from the National Board of Revenue (NBR) sources.
Following the changes in the Finance Bill, corporate tax in garment sector will drop to 12% from the proposed 15%, but the tax on earnings from apparel exports will be 1%, up from 0.7 percent in the outgoing fiscal.
The income tax rate for green garment factories has been fixed at 10% and that of other garment factories at 12%.
The government has postponed the uniform 15% VAT plan for next 2 years, so the multiple rates of the indirect tax will continue until fiscal year 2018-19 under the 1991 VAT law.
Prime Minister Sheikh Hasina said “As the new VAT law received a lukewarm response from the business community, I will urge the finance minister to keep it like it was before and not to implement it for the next 2 years”.
In accordance with PM’s suggestion, the finance minister proposed some changes in the tax measures, which the House passed unanimously in voice vote.
Finance Minister also gave VAT waiver for meditation, mainly to Quantum Foundation, for the next 2 years.
Excise Duty on Bank Account
After the proposal to increase excise duty on bank accounts the government has faced extreme criticism from the general public as well as ministers, economists and business leaders. Finally, Finance Minister made the following changes:
|Thresholds||Proposal (Tk)||Final (Tk)|
|Upto Tk 1 Lakh||0||0|
|Above Tk 1 Lakh – Tk 5 Lakh||800||150|
|Above Tk 5 Lakh – Tk 10 Lakh||800||500|
|Above Tk 10 Lakh – Tk 1 Crore||2500||2500|
|Above Tk 1 Crore – Tk 5 Crore||12000||12000|
|Above Tk 5 Crore||25000||25000|