The finance bill for the upcoming financial year 2024–25 is likely to be passed in parliament on Saturday, with the government backtracking from the imposition of a 25 per cent duty on car imports by lawmakers.
Finance minister Abul Hassan Mahmood Ali, who placed the finance bill for FY25 on June 6, may also withdraw another proposal of cutting tax holiday facilities for investors at high-tech parks and export processing zones.
However, the much-criticised proposal for legalising undeclared wealth and assets by paying a flat 15 per cent tax without any question about their sources is likely to be retained for the new financial year beginning on Monday.
A proposal to impose a 15 per cent tax on capital gains exceeding Tk 50 lakh for beneficiaries in the share business is also likely to be retained, although investors strongly opposed it.Â
While making his budget speech, the finance minister made it clear that the government wanted to get rid of some waivers mainly provided to privileged groups and businesses.
Of those, the proposal of imposing a 25 per cent duty on the import of cars by the parliament members got special attention.Â
‘Presently, exemption of all types of customs duties and taxes exists on the import of one car, jeep/microbus by the honourable Members of Parliament,’ he said.
‘A noble example will be set if the public representatives amend this privilege and lead everyone to come out of the tax exemption culture,’ he said.
But finance ministry officials claimed the necessary changes to the Members of Parliament (Remuneration & Allowances) Order 1973 for the implementation of imposing duties could not be made because of a shortage of time.Â
Parliament members have been availing of duty-free car import facilities for 36 years, resulting in huge revenue losses for the government.
At present, ordinary citizens have to pay between 45 per cent and 500 per cent taxes for importing cars, depending on the cubic centimetres of their engines.
The proposal for allowing individuals and entities to declare previously undisclosed assets without any questions at a 15 per cent tax on cash, bank deposits, financial securities, or other forms of wealth will remain valid despite criticisms by economists and think tanks.
Economists said that the provision would only encourage undisclosed money owners and tax dodgers while discouraging regular taxpayers.
On June 7, Transparency International Bangladesh, in a statement, said that facilities for legalising undisclosed wealth and assets undermined the ruling Awami League’s election manifesto and its frequently reiterated pledge of zero tolerance against corruption.
The passage of the finance bill will allow the government to collect revenue against the projection of Tk 5.41 lakh crore from the first day of FY25.
Of the overall revenue, the National Board of Revenue has been asked to collect Tk 4.80 lakh crore.
The appropriation bill is expected to be passed in parliament on June 30 to authorise ministries and divisions to spend Tk 7.79 lakh crore in FY25, as projected by the finance minister while announcing the national budget.Â
The finance minister also projected a 4.6 per cent budget deficit to be made up mostly by borrowing from banks.
The Annual Development Programme has been set at Tk 2.65 lakh crore in FY 25.