Dhaka, Bangladesh (BBN) – The finance bill 2014 was passed in parliament on Saturday with some major changes, retaining the provision for investing undisclosed money in purchase of flats and imposing fresh surcharge on mobile phone users.

Undisclosed money could be invested in purchase of flats by paying a certain amount of tax in the new fiscal beginning Tuesday, said finance minister AMA Muhith just before the passage of the bill he had placed on June 5 in the house, the New Age, a local newspaper, reported.

He, however, said the provision would not continue for purchase of treasury bonds though economic experts demanded total abolishment of the ‘unethical’ facility as, they said, undisclosed money, better known as black money, hurt honest taxpayers.

Muhith scrapped tax on realised gains from stock investment for individual investors for improvement of the share market that remained hamstrung since the collapse in 2010 and 2011.

Prime minister Sheikh Hasina requested the octogenarian finance minister to consider half a dozen proposals she placed while taking part in the budget discussion.

The prime minister said the government should impose surcharge on mobile phone uses. The funds from the surcharge would be spent on education and health, she said.

The prime minister also wanted cut in import duty on mobile phone and scrapping of the proposed gain tax on individual share investors.

She said 20 per cent supplementary duty on toothpaste, soap, detergent, razor and blades should continue.

Muhith accepted the proposal for surcharge on mobile phone uses and other proposals.

But he did not mention the rate to be imposed on mobile users whose number crossed 100 million last year.

The surcharge would affect poor- and middle-income groups.
The finance bill was passed by voice vote by treasure bench members and without objection from the opposition members led by Raushan Ershad.

Muhith was seemingly pressured by cell phone traders into reducing the duty to 5 per cent from the proposed 10 per cent and waiving income tax on cell phone import.

He is also believed to have been persuaded by tobacco manufacturers into slashing supplementary duties to 60 per cent from the proposed 100 per cent on import of paper.

He also slashed duty on non-refined tobacco to 60 per cent from the proposed 100 per cent for discouraging smuggling of cigarettes. He lowered tax to BDT 55.76 per square foot from the proposed BDT 90 on profit from sales of flat and houses.

The proposed mandatory requirement for joint-stock companies or company to obtain a certificate from chartered accountants if they gain more than BDT 50 million has been cancelled on a request by the apex chamber body FBCCI, said Muhith while highlighting the changes.

He told parliament that he had also cancelled a proposal companies should obtain certificate from cost and management accountants in line with international norm, following strong opposition from chartered accountants.

The finance minister allowed tax holiday for rice bran oil industries and cineplexes outside Dhaka and Chittagong for 10 years instead of seven years.

Muhith said he had brought a series of changes to the original proposals on import duty and Value Added Tax. He waived VAT on cheap biscuits and cakes and reduced VAT on liquefied petroleum gas. He waived duty on industrial raw materials and chemicals for the safeguard of local industries.

He said Shahiduzzman Sarkar and Mohammad Sahabuddin had made 10 and 15 proposals respectively for improvement of his proposed fiscal measures.

He criticised economist Abul Barakat for presenting ‘flawed’ statistics on the amount of undisclosed money and consultancy fees taken away by the donors on various occasions as he was replaying to a statement by a lawmaker.

BBN/SSR/AD-29June14-11:32 am (BST)