Finance Bill, 2017 passed suspending new VAT law

Parliament Correspondent: The Jatiya Sangsad (JS) on Wednesday passed the 'Finance Bill 2017' with several amendments to the budget proposals, including reducing the rates of excise duty on the deposits of bank accounts and delaying the full enforcement of the Value Added Tax (VAT) and Supplementary Duty Act, 2012.

In his concluding speech in the Jatiya Sangsad, Finance Minister Abul Maal Abdul Muhith said he accepted all proposals of Prime Minister Sheikh Hasina regarding the changes of some budget proposals and urged all quarters to raise above all narrow personal interests and involve themselves in building a happy prosperous Bangladesh as dreamt by Father of the Nation Bangabandhu Sheikh Mujibur Rahman.

The House passed the Bill after Speaker Dr Shirin Sharmin Choudhury placed it for voice vote. The Bill was introduced in the House on June 1 when Finance Minister AMA Muhith placed the TK 4,00,266 crore national budget for fiscal 2017-18 in the Jatiya Sangsad.

According to the finance bill, bank accounts having deposits of Tk 100,000 are exempt from excise duty. But bank accounts having deposits between Tk one lakh and Tk five lakh will have to pay TK 150 as excise duty, between Tk five lakh and Tk 10 lakh will have to pay Tk 500, between Tk 10 lakh and Tk one crore will have to pay Tk 2500, between Tk one crore and Tk five crore will have to pay Tk 12000 and account holders having deposits between Tk five crore and above will have to pay Tk 25000.

The implementation of the Value Added Tax and Supplementary Duty Act, 2012 will be delayed for two years and the government will take steps to enforce it in phases after bringing some amendments to the law, said the finance minister.

According to the finance bill, there will be no VAT on meditation for the next two years. Locally manufactured computers and cellular phones and their parts, motor cycle industry were exempt from VAT. VAT on locally assembly industry of refrigerators reduced to 20 percent from 30 percent and there will be no VAT on plastic and fibre-glass made LPG containers at import level. Import of solar panels is exempt from duty.

In his closing speech about the interest of savings certificates Muhith said he did not say anything about the reduction of the interest rates of savings certificates so that pensioners, middle and lower middle people are not affected. But the sale of savings tools stood at Tk 42,098 crore up to April, 2017 against the government's target of Tk 19,610 crore which has been creating pressure on the government's expenditure management, he said and hinted adjustment of interest rates in future based on the inflation rate.

He said the government has started working on expanding pension facilities so that maximum population can get its protection.

The finance minister expressed the hope that the country will be able to achieve 7.4 percent growth as forecast in the budget for FY18. Macroeconomy is now at a stable position because of comfortable forex reserve, favourable balance of payment, falling inflation rate and the government revenue and monetary policies, he added.

Regarding the criticism of the lawmakers he cited the report of Bangladesh Bureau of Statistics saying the rate of unemployment came down to 4.0 percent in 2015-16 from 4.3 percent in 2013.

About implementation of Annual Development Programme (ADP), he said the capacity for implementation of ADP has been increased over the last two tenures of the Awami League government. The expenditure for ADP was Tk 19, 633 crore in fiscal 2005-06 but it stood at Tk 79, 351 crore in fiscal 2015-16.

risingbd/DHAKA/June 28, 2017/MA Rahman/Amirul