Published: 02:37 AM, 26 June 2019
10 percent tax on savings schemes upsets people
A large number of people, mostly senior citizens who rely on savings schemes, thronged the central bank governor’s building on Monday noon to draw the profit on savings certificates. -Collected
Millions of people across the country deposit money through saving schemes. Most of these people belong to middle class. These people depend for their livelihood on the profit they get from the saving schemes.
The government has imposed 10% tax on saving schemes in the proposed budget for 2019-2020 fiscal year. This decision has heavily upset and angered the masses who rely on saving schemes for survival.
In most cases retired government employees save their pensions through saving schemes. They spend this money for the education and marriages of their children.
Thus saving schemes are a vital part of their life. It has been announced in the budget that 10% duty would be slapped on saving schemes if profits are not drawn before 30th June 2019.
Thousands of people have gathered at Bangladesh Bank and Sonali Bank recently to get the profits of their saving schemes to avoid 10% tax. People prefer saving schemes because saving papers offer higher interest rate than bank deposits. The government takes loans from saving schemes.
Different banks have meanwhile urged the government to reduce the interest rate of saving schemes. Authorities of Dhaka Stock Exchange and Chittagong Stock Exchange have also called upon the government to curtail interest rate of saving papers.
Shakil Rizvy, President, DSE Brokers Association of Bangladesh has said that higher interest rate for saving schemes is one of the reasons behind the recession stock markets are suffering from.
Interest rates for saving papers range from 11.4% to 11.76% while interest rate for bank deposits is around 6%. Saving schemes of 75 thousand crore taka were sold during July to April period of 2018-2019 fiscal year.
The government borrowed 43,475 crore taka from saving schemes during July to April of 2018-2019 fiscal year.Many struggling widows in towns and villages also depend on saving schemes for their livelihood. These women will face immense hardship if the duty on saving schemes is increased.
10% duty on saving schemes comes into effect from 1st July 2019.Economists have said that the government should curb source tax on saving schemes and should not raise duty on saving papers to make saving schemes more beneficial for the country's people.
