Tax on savings certificates to affect elderly

Imposition of tax at a rate of 5-10 per cent on profit of Sanchaya Patra or savings certificates (SCs) has shocked investors. They fear that their purchasing power will decline especially when prices of commodities and services they are buying are going up. These people, mainly elderly citizens, invested their money in SCs to receive periodical profit for meeting the family expenses including medical services. Purchase of the savings instruments and encashment of profit and principal work as a bond between seller and purchaser. While the investors in SCs provide funds for financing budget deficit, the government considers this instrument as some sort of social safety net for the elderly people who retired and invested the money they saved earlier. Although the government has the authority to bring changes in it, the investors in SCs were not in a position to anticipate such cut on their income. The children of the retired people, whose income is extremely limited, would also be affected by the tax imposed.

A retired banker

Dhaka