Daily Bangla Times :

Published : 2019-03-03 16:00:00

Daily Bangla Times :

Published : 2019-03-03 16:00:00

Banks demand scrapping of double taxation on balance

Banks demand scrapping of double taxation on balance

BD Online Desk: Bankers on Sunday demanded elimination of double taxation on bank balance claiming that clients were being forced to pay excise duty twice on the same bank balance.

At a participatory dialogue with NBR, representatives from different banks also demanded withdrawal of income tax on provision amount kept against classified loans.
Income Tax Zone-1 in Dhaka organised the dialogue programme at the auditorium of Jatiya Natyashala of Bangladesh Shilapakala Academy to exchange views with private sector companies, including bank and financial institution and aviation, which deduct tax at source on behalf of NBR.

Probashi Kallyan Bank managing director Mahtab Zabin said that depositors had to pay excise duty twice on the same money if he or she transferred the money from one account to another account.

For example, a bank deducts excise duty on balance in a savings account of a client and then it deducts the duty again when the client transfers the money to deposit account, she said.

NBR should exempt the clients from the double taxation on bank balance, including deposits and loans, she added.

NBR imposes excise duty ranging from Tk 150 to Tk 25,000 per year on balance above Tk 1 lakh and above.

She also said that NBR should exempt banks from payment of income tax on provision amount kept against classified loans.

Banks have to keep a large portion of its income for provisioning as most of the banks are suffering from huge amount of classified loans, she said.

NBR considers the provision amount as income instead of expenditure, she added.
Dutch Bangla Bank Ltd senior vice-president for tax management and compliance Md Shahid Ullah recommended that NBR should allow banks to show provision as expenditure to help banks to overcome the capital shortfall, he said.

He also said that banks were forced to deduct excise duty once on loan amount and deduct the duty again when the amount was transferred to deposit account.
NBR chairman Md Mosharraf Hossain Bhuiyan said that they would examine the demand related to tax on provision amount.

He also said that there were many areas, including small and medium businesses and transport sector, from where NBR could not collect tax at proper amount.
Transport sector pays a very small amount as presumptive tax, which should be raised through discussion, he said.

Sonali Bank chief executive officer and managing director Md Obayed Ullah Al Masud said that people felt uncomfortable to visit tax offices to pay tax as the tax payment system was complex.

NBR should make tax payment system easier and digitised to encourage people to pay tax, he said.

NBR member (tax administration and human resource management) Kalipada Halder, Investment Corporation of Bangladesh managing director Kazi Sanaul Hoq, Bangladesh Commerce Bank Ltd managing director Abdul Khaleque Khan, Uttara Finance and Investment Ltd managing director S M Shamsul Arefin, Qatar Airways Bangladesh country manager Jayaprakash Nair, Eastern Bank Limited head of finance Masudul Hoque Sardar, among others, spoke at the programme.