Finance Minister AMA Muhith Wednesday ruled out the possibility of revising the yield rates of the government saving certificates since the bank deposit rates are now almost equivalent to those.
"So we don't need to revise it (yield rate of saving tools). We will settle it in a meeting," Muhith said at a pre-budget discussion with members of the Economic Reporters' Forum (ERF) at his secretariat office.
The minister said the government has a policy to fix the yield rates of savings tools at rates slightly higher than the bank deposit rates. The decision was taken so since the savings tools were floated for resource mobilisation.
Mr Muhith had been under pressure from experts and banks for revising the yield rates of savings tools vis-a-vis those of deposit rates because of the large difference between the two.
But due to aggressive deposit hunting by banks, the interest rates of deposits have gone up considerably and those are now close to the rates offered by the savings tools.
While presenting the salient features of the national budget for the upcoming fiscal year briefly, Mr Muhith said the budget size will be something around Tk 4.6 trillion and priorities will be given to human resources development.
Similarly health, education, sanitation, and housing sectors will get special priorities, he said.
However, he said, major allocation will go to transport and energy sectors. "They will lead. The major chunks of investments will go to transport and energy sectors.
The minister said this year the corporate tax rate will see a change. "Our corporate tax rate is the highest in the world. We are trying to rationalise it."
Mr Muhith said the process of legalising black money was stopped long ago. "Our law permits that any person can pay taxes against their undeclared income any time by paying 25 per cent penal tax."
"So this is a normal law, and this will operate for many more years. Because, in many cases black many is created, and if the undisclosed money comes to the govt coffer, that is good," he said replying to a query.
The minister said the extent of hullabaloo raised over the outflow of money, is not justified since the outflow of fund actually does not take place to that level.
"Once smuggling of money took place when there was lots of scope for having second home in Malaysia. Now that type of outflow is reducing, because we asked for information to Malaysia, and they gave us the proper information. Now even no money is smuggled out to Dubai. Because, buying apartments in Dubai now has become tough," he said.
Mr Muhith said there was hartal and many other unwanted events back in 2015. "After three years, I see better flow of private investment now. The private investment ratio is going to be higher this year."
Replying to another query he said tobacco taxation will be very different this year. "We will have a meeting with the Prime Minister where stakeholders will remain present. The issue will be decided there."
Mr Muhith said he was considering to further expansion of tax net since the number of taxpayers is now 3.3 million. He said now the target can easily be set at 4.0 million. Replying to another query he said the government wants to withdraw the tariff value in phases because the tariff value in Bangladesh is extremely low.
But, he said, it will take time since withdrawal of tariff value at once will raise price of commodities between 100 per cent and 200 per cent.
Citing an example he said: "One of them are steel. Steel is very cheap in Bangladesh. Big companies have kept the tariff value of steel at low through persuasion. Tariff value is a distorting element."
ERF president Saif Islam Dilal led the ERF delegation at the discussion.
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