Shawdesh Desk:

Finance minister AHM Mustafa Kamal on Monday made a delayed announcement to withdraw additional 5 per cent tax on income from the saving certificates conditionally.

The waiver will affect the saving certificate holders having invested not more than Tk 5 lakh, he said at an impromptu briefing at the ministry.

Mustafa Kamal, however, brought no change to the provision of cutting 10 per cent tax on the saving certificates that matured by June  30 but their holders were yet to realise the interest.

Legal experts termed the government exercises to the saving certificates ‘unethical’ and unfriendly towards its holders.

Shah Bakhtiar Elias, a company lawyer, said imposition of tax on saving certificate income is unethical since the holders already paid income tax against their incomes before investing in the saving certificates.

Moreover, increasing tax on unrealised gain is pathetic, he observed.

Jurist Shahdeen Malik said many saving certificate holders could not realise their gains on their certificates that matured before June 30 for various reasons and they stand to lose because of the recent government decision.

Besides, old widowers and housewives who rely heavily on income from the interest will also be big losers, he said.

Mustafa Kamal said the national board of revenue would take necessary steps on his new announcement on waiver against the saving certificate soon.

NBR chairman Mosharraf Hossain Bhuiyan was present at the briefing.

The government has been looking for options to check the high growth in saving certificates sales for getting rid of heavy burden of payment in interest.

According to a finance division document, the government had to pay interest worth Tk 55,472 crore against the projection of Tk 41,457 crore in 2017-18 fiscal, amounting 2.5 per cent of the county’s gross domestic product in that year.

The finance ministry projected that the government would pay an interest of Tk 51,340 crore to the saving certificate holders in the recently concluded fiscal.

Responding to a question, Mustafa Kamal said that the government wanted to check investment abuses in saving certificates.

He also said the government wanted to create a bond market so that saving certificate holders can invest there.

Mustafa Kamal asked the expatriate Bangladeshis not to be confused with the implementation of the budgetary proposal of 2 per cent cash incentive against remittance.

He said there have been confusions regarding the cash incentive.

Many speculated that cash incentive would not be given if remittance was sent now, he noted.

The finance minister said he wanted to assure the expatriate Bangladeshis that 2 per cent cash incentive will be given even if somebody sent the remittance now and even six months later.

He said a guideline on cash incentive is being prepared by Bangladesh Bank and it would take two to three months to complete.