The association fears the extra tax will discourage clients from keeping deposits in banks
Bangladesh Association of Banks (BAB), a forum of banks’ directors requested the finance minister to withdraw excise duty on deposits, which was proposed in the budget for FY2020-21.
The association made the request to the Finance Minister AHM Mustafa Kamal in a letter on June 15.
BAB Chairman Nazrul Islam Mazumder said in the letter, if the proposed excise duty rate is implemented, depositors may turn away from banks.
This will lead to a financial crisis for banks and the depositors who depend on the interest from deposits would be discouraged to invest in banks, added the letter.
In the budget speech for FY21, Finance Minister AHM Mustafa Kamal proposed a massive hike in excise duty for bank accounts with a balance of more than Tk5 crore – from the previous Tk25,000 to Tk40,000.
In case of a balance of over Tk1 crore but less than Tk5 crore, the duty has been proposed to be increased from Tk12,000 to Tk 15,000.
The excise duty on bank accounts with balances over Tk10 lakh but less than Tk1 crore has been proposed to be increased to Tk3,000 from the existing Tk2,500.
More to follow….