a year ago

Sales of savings tools see negative growth in H1

Mandatory tax return submission key reason

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The net sales of government's savings tools have registered a negative growth in the first half of the current fiscal year (2022-23) due to different factors including making tax return certificate mandatory for the savers.

Such negative growth was the result of higher encashment of savings tools than that of their fresh investments during the period, official figure reveals.

The Department of National Savings (DNS) sold savings tools worth Tk404.71 billion while the savers enchased Tk435.78 billion in the July to December period of the Fiscal Year (FY).

And the net sales have stood (negatively) at Tk31.06 billion during the period.

On the Other hand, the net sales was much higher amounting to Tk95.89 billion in the matching period of the previous FY 2021-22.

The number of fresh investments has declined and many of those who are enchasing their savings certificates after maturity, they are not reinvesting in the schemes.

The government has made mandatory tax return submission for the purchase of savings tools of over Tk500,000 (Tk 0.5million) in the current fiscal year.

This measure has laid an impact on the sales of savings certificates, officials close to the process said.

Submitting tax returns is a hassle for small investors whose income is not taxable; hence they are getting discouraged to buy savings certificates, they viewed.

In this case, the objective of providing financial security to the small investors of the government is likely to be disrupted, they observed.

Md Shah Alam, director of the DNS, said obtaining TIN certificate is not a big problem for small investors.

But giving tax return is a problem for them, because many do not have their own income.

For example, many women, when they get funds from any source, buy savings tools with it. They are now in a trouble, he said.

He also predicted that as there is no ceiling of bank deposit rate now, if banks give a good rate, it seems that the sale of savings certificates will decline further in coming days.

The government's target of net borrowing from savings tools is Tk350 billion for the FY2022-23.

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