NBR to dispel confusion about tax on savings tools

---

FE Report
The National Board of Revenue (NBR) will meet with the management of different banks and relevant authorities to dispel confusion about its directive relating to the imposition of 10 per cent tax at source on interest income from government's saving instruments.
The NBR will soon hold meetings with the managing directors (MDs) of banks and authorities concerned on this issue across the country, said NBR tax policy member Ali Ahmed.
It has been found that some banks are deducting the tax at source from the interest earned during the 2004-06 period, which is a violation of the NBR order.
The board received a very negligible amount from the saving instruments in the last three fiscals because of the taxpayers' reluctance to show the interest income from the same in their tax returns.
"We have imposed the tax at source on the saving instruments to stop the evasion of tax," he added.
The imposition of tax at source on the interest income from saving instruments was suspended since 2004 and the tax payers were supposed to include such income in their annual tax returns.
Earlier, the NBR imposed 5.0 per cent tax at source on savings instruments as final settlement.
Asked whether the deduction of tax from saving instruments would hurt the senior citizens or not, the tax policy member said: "We have tried to maintain a balance from our side and we will not introduce any discriminatory measure."
Recently, the chief adviser also sought clarification about the imposition of 10 per cent tax from the finance ministry.
Asked about the issue, the tax policy member said: "we have clarified it to the CA that the NBR will not impose the tax retrospectively from 2004 on the interest income from saving instruments."
The NBR issued the order on July 10 imposing 10 per cent tax, deductible at source, on annual interest income exceeding Tk 25,000 from savings instruments.