Parliament on Wednesday passed the Finance Bill, 2016 with some changes and curtailing tax at source on export earnings. The tax at source on export earnings will be 0.70 percent, down from 1.50 percent in the proposed budget for 2016-17 fiscal. It was 0.60 percent in the outgoing fiscal year.Besides, the proposed 15 percent VAT was fully withdrawn on the rent or place and establishments of the ICT-related service organisations.Finance Minister AMA Muhith moved the bill which was passed by voice vote.Before the passage of the bill, the Finance Minister joined the general discussion on the proposed budget for 2016-17 fiscal. Muhith expressed his high hopes to implement the budget and achieve the target of 7.2 percent GDP growth in 2016-17 fiscal.Noting that 7.05 percent growth was achieved against the target of 7 percent GDP growth in the outgoing fiscal year of 2015-16, the minister said, “We’ve showed a conservative attitude towards projection of the GDP growth rate.”Mentioning that the private investment falls slightly to 21.78 percent of GDP in 2015-16 fiscal from 22.07 percent in 2014-15 fiscal, he said the government is cautious about that.”Though the investment has declined, the growth rate is on the rise, which is in fact the sign of investment efficiency,” he said. “I have no hesitation to admit that there’re still many barriers when it comes to private investment. I believe if the budget can be implemented properly, there’ll be dynamism in private investment,” he added. Muhith said human resource development, including the education and health sectors, have been given the highest importance in the budget. Among the top 10 ministries, the Education Ministry got the highest allocation in 2016-17 fiscal, but it got the 3rd highest allocation in the outgoing fiscal, he said.Besides, the Primary and Mass Education Ministry got the 2nd highest allocation in 2016-17 fiscal that got the 5th highest in the outgoing fiscal, he added.Muhith said one percent import duty would be kept for flourishing capital machineries in the industrial sector and also to extend such facility to some other machineries and equipment, keeping effective the existing duty exemption and rebate facility in the next year for the essential commodities like edible oil, sugar, pulse, onion, garlic, keeping the duty exemption facility for the import of machineries and rides for constructing children’s parks and amusement parks while the imposed duty rate would be reduced on the materials for making SIM cards, smart cards, server bank, fiber optic cable in the ICT sector.The Finance Minister also informed the House that the imposed 5 percent import duty on life saving drugs has been withdrawn, proposed to increase the import duty to 10 percent from the existing 5 percent on the medical and surgical products and giving proper definition of e-commerce.Besides, no VAT would be imposed on e-commerce, making the import duty 5 percent for ensuring the availability of composite LP gas cylinder, the universal income year of July-June would not be applicable for the multinational companies, keeping the existing provision of tax at source for cigarettes, medical services would be exempted from VAT following demands from various quarters, he said.
