The government deducted 10 per cent source tax on profits from savings certificates with cumulative investments up to Tk 500,000 in December and January, instead of the prescribed 5 per cent. The authorities have now initiated steps to refund the excess tax.

According to the rules, source tax on profits from savings certificates with cumulative investments up to Tk 500,000 is 5 per cent. Profits from pensioner savings certificates with investments below Tk 500,000 are exempt from source tax. For investments above Tk 500,000, source tax is 10 per cent in all cases. These rates were set by a notification issued on 28 August 2019 by the internal resources division of the finance ministry and remain in effect.

Despite this, without any new announcement, 10 per cent source tax was being deducted on profits from savings certificates up to Tk 500,000 since December. Investors with less than Tk 500,000 in investment discovered the issue when withdrawing profits from banks. Compared with November, they received Tk 100 to Tk 150 less in profits in December.