The proposed budget of 2019-20 is going to be passed in the Jatiya Sangsad (JS) on Sunday (June30). The money bill will be placed the JS on June 29. There will be some changes in the new budget. The most significant changes will be in advanced tax, source tax on savings certificate and withdrawal of advanced tax in the import of capital machineries.
The taxes on retain earnings and reserve on the listed companies in the capital market is also going to be dropped. There will be no mandatory system of submitting Tax Identification Number(TIN) in taking electricity connections. Five percent tall tax on imports might be withdrawn. VAT on e-commerce also might be withdrawn.
Besides, the VAT will be either reduced or withdrawn on the consumer goods like edible oil, sugar, powder milk etc.
Advanced tax is being withdrawn: Under the VAT law the advanced tax will be exempted. No tax will have to pay on the imports including the import of capital machineries. On Saturday during passing of money fill it might be revised.
If the Finance Minister remains sick then the Prime Minister might present the money bill in the JS for approval and pass.
New VAT law: According to new VAT law in the advanced business the concern will have to pay AT instead of ATV. It means that in the import of capital machineries there will be advanced tall five percent taxes.
It was observed that due to this measure advanced taxes are being imposed on 6500 goods. After submitting VAT return this advanced tax shall be taken returned. However that businessman will have to pay the interest of the bank loan during the mid time of getting back the money earlier paid as advanced taxes. This will enhance the price of the imported capital machineries and imported goods. It will have direct impact on the consumers. After taking consideration of the matter it will be changed at the time of passing the budget.
Immediate after the announcement of budget all classes of businesses have been raising their objections on the imposition of VAT and taxes. They expressed that this will enhance the price of goods and services.
On the import of goods by government, semi-government, autonomous bodies and bonded bodies under VAT law the collection of advanced taxes have been kept suspended till June 30. The duration might be extended.
The enhanced source tax on savings certificate is going to be withdrawn: The most criticized feature of the proposed budget is the imposition of enhanced source tax on the life line of the middle class. In the budget punitive enhancement of 5 percent on the source making it from existing 5 to 10 percent was proposed. If this is passed then it will directly hit the middle class, retired personnel and small savings holders. This matter was seriously criticized in the JS. So the government is going to withdraw the enhanced rate of tax.
However the budget makers have to line of thinking. One is to withdraw the enhanced rate on all types of savings certificate and the second is to withdrawal from only family savings certificates and pensioners savings schemes. However the Prime Minister Sheikh Hasina will take the final decision.
In the proposed budget for flourishing capital market a bunch of incentives have been given. However the most discussed matter is imposition of 15 percent tax on the retain earnings and reserve. The concerned people are scared that if this provision is retained then the formation of capital will be hindered.
TIN in electricity connections: It was proposed in the budget that at the time of taking electricity connection the consumer shall have to submit TIN. This proposal was directly opposed by the State Minister for Power, Energy and Mineral Resources Nasrul Hamid himself. He sent a DO letter to the Finance Minister to reconsider this proposal.
VAT will be withdrawn from e-commerce: Business through social media(Face Book, Twitter etc) and virtual business or on line business and many other sectors a proposal of slapping of VAT at the rate 7.5 percent has been proposed. This VAT rate might be reduced.
In the budget it was proposed to pay VAT at the rate of 15 percent along with payment of advanced tax(AT) on the import of raw materials of cement and MS rod. If this is done then the prices of these two construction materials will increase hampering the development of the country. However at demand of the businesses this AT might be withdrawn.
Consumers Association of Bangladesh(CAB) has demanded to keep the daily necessities including edible oil, sugar, powder milk exempted from the VAT. CAB also suggested the duplication of taxes on the consumer goods.
It is learnt that the Prime Minister might take the floor on this matter. She might reduce or withdraw the VAT on these daily necessities.
Government is going to bring changes in the proposed budget of 2019-20 with the size of Taka 5 lakh 23 thousand 190 crore. Prime Minister Sheikh Hasina might in the continuity of past years bring changes in the most discussed and criticized proposals.
The Finance Ministry and NBR expects that due to these changes the middle class and the traders will be happy. On last June 13 the proposed budget of Taka 5 lakh 23 thousand 190 crore and money bill was placed in the JS. The proposed budget was discussed and criticized both in the JS floor and outside by the law makers as well as organizations and think tanks also.