The government will collect no additional taxes on the profit of savings certificates and the taxes at sources realised from profit will be considered as the final tax liability.
The National Board of Revenue (NBR) issued a circular to this end on Wednesday, disclosing its decision on not to include the profit of savings certificates in tax payers’ income.
The new Income Tax Law passed in June 2023 incorporated a provision on the inclusion of the profit of savings certificates in tax payers’ income. In that case, tax payers are likely to face a pressure of additional tax burden. This new provision frustrated people depending on profit of savings certificates, which is why the NBR moved to repeal the provision.
Sources at NBR said, previously, tax at source that was realised from the profit of savings certificates was considered as the final tax liability of a tax payer, but the profit was free from taxes. With issuing the new gazette, NRB returned to that previous rules.
Say, a tax payer earns Tk 1 million annually and received Tk 200,000 in profit from his/her investment in savings certificate, and a tax of Tk 20,000 at sources is realised from the profit. Had the new law been enacted, entire profit of Tk 200,000 minus the source tax of Tk 20,000 would be considered as tax payable money. As the NBR repelled the provision of the law, from now on, entire profit of Tk 200,000 will not be considered as tax payable money and a tax of Tk 20,000 at sources will be the final tax liability.
Besides, the new law also incorporated a provision stating that cash assistance provided by the government in export sectors will also be included in exporters’ earnings. The NBR also amended to this through the Wednesday’s circular. As a result, from now on, cash assistance in export sectors will also be included in exporters’ earnings, and tax at sources against the cash assistance will be considered as final tax liability.
Other than this, for tax payers who are not obliged to submit tax return, source taxes realised from the profit of bank savings and permanent deposits will be considered their final tax liability, according to the circular. Public universities, education institutions enjoying MPO (monthly payment order) facility, Bangladesh Bank and various government agencies are not obliged to submit tax return.
Officials concerned of the NBR, on condition of anonymity, said this facility has been provided considering the disadvantage of the tax payers.