75 lakh more small depositors to gain excise duty exemption next fiscal

The National Board of Revenue (NBR) is set to ease excise duty for small and middle-income bank depositors by raising the tax-free threshold from Tk1 lakh to Tk3 lakh in the upcoming fiscal year, benefiting additional 75 lakh depositors.

Analysis of central bank data shows the total tax burden for these depositors will decrease by Tk112 crore.

Officials at the National Board of Revenue (NBR) said the move aims to enhance banking services for low- and middle-income people. It should also encourage small depositors to save more despite rising inflation.

They said many small and micro depositors currently prefer to keep their money in banks. The government wants to expand financial inclusion and bolster confidence in banks by raising the threshold.

For bigger depositors, however, excise duty rates may increase to ensure higher contributions from them.

There are 16.32 crore bank depositors in total, according to Bangladesh Bank data at the end of 2024. These accounts hold deposits of Tk18.83 lakh crore. Of these, 15.47 crore accounts hold deposits between Tk1 and Tk3 lakh – roughly 95% of all bank accounts.

Md Arfan Ali, former president and managing director of Bank Asia, said this is a good move, which will bring more small depositors into the banking system and boost financial inclusion.

"People don't like paying small charges. When depositors know no excise duty will be deducted from their small savings, it will spark fresh interest in banking," he told The Business Standard.

Excise duty rates on deposit amounts

Under the new structure, deposits up to Tk3 lakh will be excise-duty-free. For deposits between above Tk3 lakh and Tk5 lakh, the duty will be Tk150. From above Tk5 lakh to Tk10 lakh, it will be Tk500.

Deposits between Tk10 lakh and Tk50 lakh will attract a duty of Tk3,000, while those above Tk50 lakh to Tk1 crore will pay Tk5,000. Deposits above Tk1 crore to Tk5 crore will incur Tk10,000 in duty, and those above Tk2 crore and Tk5 crore will pay Tk20,000.

The excise duty is charged only once a year. If the deposit crosses a threshold at any time in a calendar year, the duty is levied only once. No duty applies to accounts holding less than Tk1 lakh.

NBR officials said the new rules provide relief for small account holders while collecting higher excise duty from those with larger deposits.