Cut in banks' corporate tax rate under review: Muhith

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Finance Minister AMA Muhith dismissed Tuesday the bankers' plea to cut interest on government savings certificates, but took into cognizance their request to reduce the rate of corporate tax on the commercial banks, reports UNB.
"The interest rate on government savings certificates will not be reduced this year," he told reporters at the Cabinet Division on a meeting with Bangladesh Association of Banks (BAB) at the Finance Ministry.
The Finance Minister said he is not sure about the decision in this regard even next year because of the involvement of the interest of pensioners.
He invited the bankers to express his gratitude for the funds they had donated for the families affected by the BDR carnage at the call of Prime Minister Sheikh Hasina, and for their contribution to the financial stimulus package.
The BAB delegation, led by its chairman Nazrul Islam Mazumder, urged the minister to cut the government savings certificate rates, as they considered the same as a hurdle to their deposit mobilisation efforts.
The BAB also raised afresh the long-standing demand for reducing the corporate income tax on banks from the present level of 45 percent.
"The corporate income tax on the earnings of the commercial banks is under consideration," Muhith said, adding that a decision in this regard would be taken through consultation with the Bangladesh Bank Governor and the NBR chairman.
He also invited the bankers to invest in the Public-Private Partnership (PPP) projects to enjoy some tax waiver, which the next budget is going to announce with a separate allocation. "It will be a sort of relief for them."
The Finance Minister said the country's economic situation has remained good despite the global recession, as the government estimates still show that the GDP would be around 6.0 per cent during the current fiscal year with satisfactory outlook for agriculture output, and strong inflow of export earnings and remittance.
"But the situation would be tougher next year," he added.
The Annual Development Programme (ADP) for the next fiscal would be of Tk 305 billion under a three-tier budget, including the new Public-Private Partnership (PPP) budget, the Finance Minister AMA Muhith said.
The development budget will be 16 per cent higher than the original ADP of Tk 256 billion for the current fiscal year and more than 24 percent higher than the revised ADP of Tk 230 billion.
"This is an ambitious ADP that we have just finalised for two reasons. We'll have to implement the pre-election pledges and also take measures in improving capacity to implement big projects," Muhith said while replying to a question whether the government machinery has the capacity to implement such a large ADP when it could not implement even a smaller ADPs.
According to figures available, only 41 percent of the projects of the current fiscal year have been implemented during July-March period.
"The ADP should be ambitious. Because, it's shameful that public investment is only 15 per cent out of the total public expenditure," Muhith said, adding that the annual public investment should be, at least, 20 per cent, which the government would do in its 5-year tenure.
He said the private sector would bring projects on their investment while the allocation would be spent to facilitate the projects mainly in the health, education and infrastructure sectors - power, energy, port, roads, highways, expressways and elevated expressways.
"If the private sector considers that the project won't be a profitable one, the government will try to remove the problem."
Muhith said the PPP projects would not require approval from the Executive Committee of the National Economic Council (ECNEC) while the private sector would implement the projects and operate them having both options -- BOO (build-operate-own) and BOOT (build-operate-own-transfer).
He said the commercial banks have expressed their interest to take part in the PPP projects.