Four new fiscal measures, including taxes on cigarettes and mobile phone use, are expected to fetch nearly Tk 110 billion in additional VAT and excise duty in the upcoming fiscal year.
The National Board of Revenue or NBR, has projected around Tk 15 billion additional taxes from Supplementary Duty on mobile phone uses alone.
While announcing the budget, the finance minister imposed 5.0 per cent in additional supplemental duty on mobile phone uses, which was 10 per cent earlier.
The NBR received Tk 67 billion revenue as SD on mobile phone uses in the last fiscal year.
The measures came into effect from June 11, the day the budget was unveiled according to the Provisional Collection of Taxes Act, 1931.
The value added tax or VAT wing also projected an additional Tk 80 billion by hiking taxes and prices of all types of tobacco items, officials said.
The government received a total of Tk 270 billion revenue last year from tobacco users.
The VAT wing expects an additional Tk 9.0 billion VAT in the upcoming fiscal from local motorcycle manufacturing companies.
Motor cycle manufacturers and assemblers will no longer enjoy the VAT exemption facility, which will expire on June 30.
In the Finance Bill-2020, the finance minister did not propose extension of the benefit that was offered in 2010 for 10 years, he said.
"The local motorcycle manufacturers have been able to build their capacity enjoying the VAT exemption during the last decade. Now, they have the ability to contribute to the public exchequer," he added.
The VAT wing expects Tk 3.0 billion additional revenue from excise duty on bank deposits, the amount of which was Tk 13 billion last year.
Economists found the fiscal measure on mobile phone uses and bank deposits to be easier way to collect taxes.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute, PRI, said the tax should be collected by expanding the number of mobile phone user rather than punishing existing users.
"It was an easy way to collect money. But tax could be raised in phases through accelerating growth in the telecom sector," he said.
Now, Tk 59 out of Tk 100 of mobile phone uses would be deposited to the public exchequer as tax, which Tk 54 in the past.
Such a measure will discourage foreign investment, thwart the telecom sector's expansion and capital infusion into the next-generation 5G network rollout, Dr Mansur said.
On excise duty for bank deposits, Dr Mansur said it will discourage bank depositors as tax is deducted from their principal amount.
"Tax should be collected from income only. All taxes should be withdrawn from financial intermediaries," he added.
He argued the Excises and Salt Act, 1944 under which tax is deducted from bank depositors should be abolished.
Meanwhile, the Bangladesh Telecommunication Regulatory Commission sent a letter to the telecom operators seeking clarification on why call rate was hiked just after the announcement of budget.
Responding to FE's query, AMTOB or Association of Telecom Operators Bangladesh, secretary-general S M Farhad said operators have acted following the rules of the government.
In this case, the regulatory order was issued on the day of the announcement of the budget, which is supposed to be effective immediately.
