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Budget FY21: 60% hike in excise duty proposed for bank accounts with over Tk5crore

  • Published at 04:50 pm June 11th, 2020
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Photo: Mehedi Hasan/Dhaka Tribune

No change in excise duty for account holders with balance not exceeding Tk10lakh

The government has proposed to hike 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 way for recovery of economy battered by the Covid-19 pandemic.

In his budget speech for FY21, Finance Minister AHM Mustafa Kamal proposed a massive hike in excise duty for bank accounts with a balances of more than Tk5 crore -- from 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 increase 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 hike from Tk3,000 from the existing Tk2,500.

However, excise duty on accounts with balances less than Tk10 lakh has been proposed to keep unchanged.  The move, however, is unlikely to come as a relief to low and mid-income groups as many of them have saw their income go down as economic activities have been seriously hampered by the coronavirus pandemic.

Until December 31 last year, there were 10.65 crore bank accounts with a balance of Tk12.14 lakh crore.

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 Bangladesh Bank data.