Business
Reform must to reduce indirect tax burden on lower income groups: Speakers
Speakers at a dialogue said that the income inequality in Bangladesh is widening due to indirect tax burden to lower income groups, while rich people are paying less comparing to their income and wealth.
The speakers said this while speaking at a policy dialogue on ‘Using direct taxation to tackle inequality and boost revenue’ held at BRAC Inn in the capital on Wednesday (December 28, 2022).
Dr. Mohammad Abdur Razzaque, Chairman of Research and Policy integration for Development (RAPID) presented a keynote paper on the topic.
Former chairman of NBR Dr Muhammad Abdul Mazid, Director General of BCS (Tax) Academy MM Fazlul Haque, Professor of DU Dr Abu Eusuf, Finance Division (budget) joint secretary Dr Mohammad Abu Yusuf, ERD Joint Secretary Md Anowar Hossain, among others, spoke in the function.
Read more: Tax return submission deadline extended to January 1, 2023
RAPID Chairman Dr Razzaque explained in the keynote paper that income inequality is widening in society despite growth in manufacturing, agriculture, and other sectors due to an unjust taxation system.
This income discrimination would be more if the reform in the taxation system is not done with a strong commitment to the nation, he pointed out.
“Comparing the small GDP of many other economies in the world, Bangladesh earns only 35 percent of its revenue from direct tax while it is 65 percent from indirect tax. It is expected to be 70 percent revenue from the direct tax, considering the volume of the country’s (Bangladesh) economy like some other countries,” he added.
Dr Razzaque said that recently the NBR announced to increase the share of direct tax from 35 to 70 percent of total revenue – which is a welcome initiative and will drive economic growth and strengthen the government’s ability to provide essential public services.
Read more: Present tax system is not in favour of industrial development: BCI
But the implementation of the target is far behind the projected time, he said.
Dr Abdul Mazid said, “The NBR must be established as a state agency, and not a government agency. As such, NBR should not be dependent on the government. Rather, it should be an independent operator on behalf of the state.”
He emphasized long-term planning to increase revenue collection by reforming Bangladesh's taxation system and the NBR.
Private sector should prepare to face challenges of LDC graduation, FBCCI president says at AGM
FBCCI president Md Jashim Uddin said Bangladesh's graduation from the Least Developed Country will strengthen the image of the country in the international arena along with creating huge trade and investment opportunities.
The president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) said this at the Annual General Meeting (AGM) of the organisation held at a convention hall in the capital on Wednesday.
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Due to Covid-19 Pandemic, the AGM of the session 2020-2021 could not be held as per schedule. As a result, two separate AGMs of the session 2020-2021 and 2021-2022 were held on the same day.
He said, “Bangladesh will lose special trade privileges in several markets including in Europe, one of the top export destinations of the country, as a result of the LDC graduation. The private sector has to face competition in maintaining the price and product quality. This is why emphasis should be given to research, innovation, and product diversification.”
To make sustainable export trading, the government should initiate more bilateral trade agreements including Free Trade Agreements (FTA), and Preferential Trade Agreements (PTA), he said.
Read more: FBCCI urges policy support in tourism development
Jashim emphasized obtaining certificates from various institutions, reducing complexity in its renewal, effective automation, and increasing the capacity of port management to attract more foreign investment.
“The Covid-19 pandemic and the Russia-Ukraine crisis have resulted in an abnormal increase in energy price, food price, agricultural production cost, industrial raw materials, parts, and transportation cost. High inflation is also occurring in currency exchange rates. Rising costs of doing business have made it difficult for local entrepreneurs to survive in the global competition,” he said.
In such a situation, he suggested that the private sector should focus on increasing the use of technology in the industry, creating a skilled workforce, increasing efficiency in business management, and increasing the capacity to produce goods at competitive prices.
In the ongoing situation, the FBCCI President urged the District Chambers and Associations to be more proactive to maintain productivity. At the same time, he suggested identifying sector-wise problems and bringing them up at the policy-making level through FBCCI.
FBCCI former president Abdul Matlub Ahmad, former first vice president Mohammad Ali, Monowara Hakim Ali, former vice president Abu Alam Chowdhury, Dewan Sultan Ahmed, Helal Uddin, and others participated in the open discussion.
India is Bangladesh’s great friend and business partner: Commerce Minister
Commerce Minister Tipu Munshi said India is Bangladesh’s great friend and business partner.
He hopes that bilateral trade with India will increase significantly between the countries if some measures would be taken to make easy trade.
Read more: E-commerce has a billion-dollar prospect in Bangladesh: Tipu Munshi
Tipu Munshi said this during a views exchange with Pranay Verma, the newly appointed High Commissioner of India in Dhaka, in his office at the Bangladesh Secretariat on Tuesday.
Bangladesh is now able to supply international quality products at relatively low prices. For this reason, it is necessary to increase the capacity of the land ports on the India-Bangladesh border and complexity needs to be removed to increase trade, the commerce minister said.
The commerce minister said that the border huts have created a lot of interest among the people of both countries. People of the seven sister states of India have benefited. This makes the people of both countries happy.
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“If visa issuance becomes easier, people's movement will increase. It will benefit the people of both countries. Bangladesh is interested in increasing the export of products to the Indian market, for which the Indian government needs sincere cooperation,” he said.
In response India's newly appointed High Commissioner Pranay Verma said Bangladesh is a good friend of India. The Indian government has always given more importance to Bangladesh.
“India's business, trade, and cooperation with Bangladesh have increased a lot. The communication system has improved. Along with air, road, and sea connectivity has improved. Bangladesh's communication with India's bordering states has become easier,” he added.
As a result, trade between the two countries has increased. Both countries have benefited due to the transportation of goods through containers by rail. The people of both countries have benefited from the establishment of the road as well as train connectivity, Verma said.
Amazon to make big business changes in EU settlement
Amazon will make major changes to its business practices to end competition probes in Europe by giving customers more visible choices when buying products and, for Prime members, more delivery options, European Union regulators said Tuesday.
The EU’s executive Commission said it accepted the legally binding commitments from Amazon to resolve two antitrust investigations. The deal allows the company to avoid a legal battle with the E.U.’s top antitrust watchdog that could have ended with potentially huge fines, worth up to 10% of annual worldwide revenue.
The agreement marks another advance by EU authorities as they clamp down on the power of Big Tech companies, and comes just a day after the Commission accused Facebook parent Meta of distorting competition in the classified ads business.
“Today’s decision sets the rules that Amazon will need to play by in the future instead of Amazon determining these rules for all players on its platform,” the EU’s competition commissioner Margrethe Vestager said at a press briefing in Brussels. “With these new rules, competing independent retailers, carriers and European customers will have more opportunities and choice.”
The agreement only applies to Amazon’s business practices in Europe and will last for seven years. Amazon will have to make the promised changes by June.
“We are pleased that we have addressed the European Commission’s concerns and resolved these matters,” Amazon said in a prepared statement, adding that it still disagrees with some of the Commission’s preliminary conclusions.
Amazon had offered concessions in July to resolve the two investigations. It improved those initial proposals after the commission tested them out and received feedback from consumer groups, delivery companies, book publishers and academics.
The company promised to give products from rival sellers equal visibility in the “buy box,” a premium piece of real estate on its website and app that leads to higher sales. The buy box has two buttons that let customers “buy now” or “add to basket.”
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European customers will get a second buy box underneath the first one for the same product, but with a different price or delivery offer.
“As Amazon cannot populate both Buy Boxes with its own retail offers, this will give more visibility to independent sellers,” Vestager said. Regulators will monitor how the second box performs and ask the company to adjust the presentation if it doesn’t get enough customers attention, she said.
Amazon is also easing access for merchants and couriers to its Prime membership service. It will stop discriminating against Prime sellers that don’t use its own logistics and delivery services and will let Prime members freely choose any delivery service. Currently, couriers can only deliver Prime parcels if they’re approved by Amazon.
The company also pledged to stop using “non-public data” from independent sellers on its platform to provide insights on how to compete against those merchants through its own sales of branded goods or “private label” products..
Amazon uses the data to decide what kind of products to launch, how much to sell them for, which suppliers to choose, or how to manage inventories, Vestager said.
She said the company has committed to stop doing this with seller data, including sales, revenues, shipments, transaction prices, performance, and consumer visits.
Amazon is facing similar scrutiny in the U.S. and Britain.
In September, California Attorney General Rob Bonta’s office sued Amazon, accusing the company of stifling competition and increasing prices for products across the market through its policies. His office said Amazon effectively barred third-party sellers and wholesale suppliers from offering lower prices elsewhere through contract terms that harmed the ability of other businesses to compete.
The company says it considers an item competitively priced when it’s offered at or below a price displayed by other retailers, which can spur higher prices elsewhere. Some vendors who pay more to sell on Amazon could lower their prices on other sites, but they don’t do so out of fear they will lose valuable Amazon real estate or face suspensions, the lawsuit said.
Read more: Amazon hiring 100,000 employees
The settlement comes amid a wider crackdown by regulators in Europe and elsewhere on Big Tech companies. In March, E.U. officials approved a new law that will take effect by 2024 to prevent so-called digital gatekeepers from dominating markets by giving preference to their own products, or using data collected from different services. Violations could result in fines of up to 10% of their annual revenue.
Foodpanda wins national Digital Bangladesh Award 2022
Foodpanda has won this national Digital Bangladesh Award in the institutional category for its contribution in facilitating the digital transformation of the country and enabling income opportunities for thousands of youths.
The award was handed over to Syeda Ambareen Reza, Co-founder and MD and Zubair B A Siddiky, Co-founder and CEO of foodpanda Bangladesh by Prime Minister Sheikh Hasina recently at “Digital Bangladesh Award 2022” event at BICC, which was well attended by ministers, parliament members, senior secretaries and industry leaders.
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The event was chaired by State Minister of Information and Communication Technology Division Zunaid Ahmed Palak.
The e-commerce company started its journey in Bangladesh in 2013 and has been successful in creating a strong digital ecosystem with many stakeholders. Foodpanda is the leading marketplace that connects restaurants and shops with customers and delivery partners. It enables SME and large restaurant partners, shops and home chefs to have a digital footprint without the risks of high investments, said a press release.
The restaurant industry has flourished in the last seven years, bolstered by the marketplace that the platform has cultivated. Customers are benefited by having food, groceries, medicine and more delivered right to their doorsteps within 30 minutes.
Freelance rider partners are presented with an opportunity to earn a livelihood in a flexible way along with access to key benefits such as insurance, training, loan and online education.
With a presence in 64 districts across the country, foodpanda has expanded business units and created over one million direct and indirect earning opportunities in the tech-based delivery ecosystem.
Read more: Foodpanda offers special discount on corporate vouchers
Alongside, foodpanda, over the years, has also taken numerous initiatives to foster the growth of women entrepreneurs. The Homechef program has more than 3000 home chefs currently active on the platform, of which 70 percent are women. Beside working on seven SDG goals, the platform has taken many initiatives to minimize food wastage in partnership with several NGOs including Bidyanondo Foundation.
Ambareen Reza, Co-founder and MD and Zubair B A Siddiky, Co-founder and CEO of foodpanda Bangladesh thanked Prime Minister Sheikh Hasina, State Minister for ICT Zunaid Ahmed Palak, and the organizers for recognising the company’s efforts to facilitate digital inclusion and empowering the youth and SMEs.
Upon winning the award, Co-founder and CEO, Zubair B A Siddiky said, “Foodpanda is at the forefront of building a digital ecosystem. We are committed to continue our contributions in building a digitally inclusive Bangladesh while empowering the youth with income opportunities and supporting the digitization of restaurants, shops, SMEs and home chefs with a marketplace to access millions of customers. I believe this industry holds immense possibility to become a significant part of the country’s continuous economic growth and build a ‘Smart Bangladesh’ by 2041.”
BAT Bangladesh scoops up ACES Awards 2022 as 'top sustainability advocate'
British American Tobacco Bangladesh (BAT Bangladesh) has won the Asia Corporate Excellence and Sustainability (ACES) Awards 2022 as a "top sustainability advocate."
The company has been honoured for its contributions to environment, social and governance (ESG) practices.
Since its investiture in 2014, the ACES Awards, initiated by the MORS Group, has grown to become "one of the most sought-after accolades in Asia."
Read: BAT Bangladesh chairman Golam Mainuddin gets lifetime service award
In honouring the ingenious innovation, capabilities and resilience of the industry trailblazers, ACES has specially handpicked the creme de la creme corporations as the award recipients for its ninth edition.
All award recipients fulfilled a stringent evaluation and judging process spanning over nine months which required various documentation submissions and finalist interviews.
"As a sustainability champion, BAT Bangladesh has demonstrated how the implementation of long-term sustainability strategies allows businesses to capture opportunities and shape their post-pandemic future, where survival alone is not enough." Shanggari B, CEO of MORS Group, said in a statement.
Read: BAT Bangladesh scoops up ‘ICMAB Best Corporate Award’ for sixth time
BAT Bangladesh Managing Director Shehzad Munim said: "It fills us with immense pride to have won this global award for two consecutive years. Such recognition exemplifies our dedication to collaborating with communities and stakeholders to create a better tomorrow."
"For 112 years, BAT Bangladesh has prioritised sustainability in its operations. Unnecessary single-use plastic elimination, zero-waste-to-landfill, water recycling, and carbon neutrality are the company's ESG goals. By 2030, the company aims to have carbon-neutral operations with 100 percent renewable electricity and net-zero emissions across its value chain by 2050," according to a statement.
Bangladesh recognises the severity of the water crisis and acknowledges its responsibility in ensuring good water governance across all levels of the organisation.
Read More: Islami Bank scoops up ICMAB Best Corporate Award
In 2022, BAT Bangladesh became the first company in the country to receive Alliance for Water Stewardship (AWS) core certification for its Dhaka factory and Green Leaf threshing plant in Kushtia.
The company said it has educated farmers on sustainable agricultural methods to improve soil fertility, preserve water, and minimise pollution. Under its ESG endeavour, the nation's largest private sector-driven afforestation programme has provided beneficiaries with 120 million free saplings.
RFL opens bicycle factory in Rangpur
To meet the growing demand for bicycles locally and internationally, RFL Group opened another factory at Gangachara in Rangpur on Thursday.
Commerce Minister Tipu Munshi inaugurated the bicycle factory Thursday.
Apart from manufacturing bicycles, the factory will manufacture frames, forks, tires, tubes, and some other bicycle components. The factory has received an investment of around Tk60 crore and will employ around 1,000 people.
Read: ADB delegation visits Pran-RFL Industrial Park
RFL has been manufacturing and marketing bicycles since 2014. The first bicycle factory of RFL is located at Shayestaganj in Habiganj. The factory now has an annual production capacity of eight lakh pieces of bicycles.
The company said its bicycles are now exported to 15 countries, including England, the Netherlands, Denmark, Germany, Austria and Belgium.
Read: RFL brings Mini Cooper Car toy for children
Ahsan Khan Chowdhury, chairman and CEO of Pran-RFL Group, said: "All the bicycles for the local market will be manufactured from this factory. The factory's annual production capacity will be six lakh pieces once it is fully operational."
'Informal sector workers, women hit hardest during pandemic'
Speakers at a workshop Thursday said informal sector workers, mostly domestic workers, were the ones to lose their jobs first during the pandemic as no households allowed them to work over the fear of the spread of the virus.
Also, people working in the services sector, including construction and the ones working independently, lost their work opportunities due lockdown, they said.
The speakers made the observations at the workshop on "Promoting decent work and women's rights in the backdrop of Covid-19" which revealed the findings of a study on the job situation in the informal sector during the pandemic.
Read: Bangladesh to finish amending labour law by mid-2023, Law Minister tells ILO
The study report was conducted by the Workers Resource Centre (WRC), a labour rights organisation with the support of the International Labour Organisation (ILO) and Japan.
"Support from the government and others from social organisations did not reach these poor and most vulnerable groups. Also, they were deprived of relief support from their local authorities," the study said.
Read: Bangladesh considers labour rights related recommendations from US, EU, ILO with due importance: PM's Adviser
"Women workers had to suffer from more hardship and insecurities at the workplace than male workers during the pandemic. At that time, many incidents of violence and harassment were reported," it added.
Md Moslem Uddin Sadeque, consultant of the International Labour Organization (ILO), Shusuk Oyobe, programme manager of PRS, Gunjan D Dallakoti, ILO official, Saif Mohammad Moinul Islam, senior program officer at ILO Dhaka office, spoke at the programme.
BSEC working to enhance financial literacy for capital market investors: Prof Shibli
The chairman of the Bangladesh Security and Exchange Commission (BSEC) Prof Shibli Rubayat-Ul-Islam has said that the capital market regulator is working to enhance the public's financial literacy so they can invest consciously and profitably.
To this effect, the BSEC is cooperating with the Ministry of Education and the National Curriculum and Textbook Board (NCTB) to include a chapter on the capital market in the secondary and higher secondary levels textbooks.
Talking to UNB, Prof Shibli acknowledged that sometimes people are being influenced to invest their hard-earned money or chasing misinformation.
"If they can become financially literate, then no one can cheat them," he said.
Read more: Under, over-invoicing to stop if commodity exchange is launched: BSEC Chairman
With a nationwide average of 24.6 percent, the financial literacy score in Bangladesh is still quite low, according to a recent survey by the Bangladesh Bureau of Statistics and Brac Business School.
Respondents with an educational qualification below SSC, people aged over 50, self-employed people, Dhaka natives, housewives, and farmers have the lowest scores, according to the 2022 survey report.
The BSEC is working to introduce real estate investment trust, or REIT, Pink, and Orange bonds in the capital markets by 2023. Through Pink bonds, small entrepreneurs can collect money for investment while SMEs and large entrepreneurs can collect money through Orange bonds.
Both the coloured bonds will be introduced to encourage women investors as well as empowering them in the financial sector, Prof Shibli said.
Read more: Visiting IMF team will meet BSEC to discuss capital market on Nov 7
Besides, the BSEC has a special bond plan for the garment and textile sector so that the entrepreneurs can collect money from the capital market to expand their business. At the same time the investors will encourage investment in this secured sector, he said.
Prof Shibli said the country’s development projects cannot be completed depending on revenue only - project-based infrastructure bonds and municipal bonds for fund collection from the stock market would be a diversified funding scope for development.
If the project authority provides dividends of around 12-13 percent, then people will invest money in the project-based bond market instead of depositing their money in FDRs and saving certificates, he said.
He said Bangladesh’s investment demand is over USD $800 billion for infrastructure and other service sector development in line with LDC graduation, which will not be possible to collect from domestic sources. But a large portion is possible through the capital market.
Read more: Takes 6-12 months to identify a share market manipulator in existing system: BSEC Chairman
Replying to a question he said that investors who have the patience to invest in the capital market and who want to secure investment scope should invest in the bond market and get greater dividends than their returns from IDFs and saving certificates.
Mutual funds, Treasury bonds’ and others are trading in the capital markets, where anyone or ordinary people can invest money. He said that the mutual funds are providing dividends of around 10 to 20 percent during the last 10/12 years.
"Those who have financial knowledge can invest in secondary share trading, and try to gain profit. They should prefer bonds and mutual funds," the BSEC chairman said.
The regulator has pushed through dozens of reforms in the capital market, from imposing company audit systems and towards accountability of brokerage houses during his tenure. As a result, the capital market will be well-positioned in the future.
Read More: Financial literacy: BICM reduces master's program fees by 50%
“We just planted the seed, from which the tree or plant will be visible within the next few years,” Prof Shibli said.
FY22: Nagad 3rd highest VAT-paying company in service category, says NBR
The National Board of Revenue (NBR) has declared mobile financial services (MFS) provider Nagad as the third highest VAT-paying company in 2021-2022 fiscal in the service category.
Finance Minister AHM Mustafa Kamal will hand over the "Highest VAT Payers Award" to the MFS at a ceremony organised by the NBR at a Dhaka hotel Saturday, marking VAT Week (December 9 to 15).
The NBR will honour the top nine VAT-paying companies at the national level for the last fiscal year in three categories – production, service and business.
Read: Nagad holds workshop on prevention of money laundering, terror financing
Industries Minister Nurul Majid Mahmud Humayun and Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries, will be present at the event as special guests. Abu Hena Md Rahmatul Muneem, senior secretary to Internal Resources Division and NBR chairman, will preside over the programme.
"We have gained customers at a faster pace because of our innovations in providing services, leading to a gradual rise in transactions. Since our launching, we have onboarded more than 6.5 crore customers," the MFS said in a media statement.
"From the very beginning, we have ensured digitisation in the country's financial sector through ground-breaking innovations like the introduction of the digital Know Your Customer (KYC) to open an MFS account without requiring any paperwork," it added.
Tanvir A Mishuk, founder and managing director of Nagad, said: "Simplification of account opening has not only accelerated financial inclusion but has also played a role in the country's shift towards a cashless society."
Read: Nagad wins Mastercard Excellence Award 2022 in two categories
The MFS provider is now working to set up the country's first digital bank to take cashless transactions to the next level, he added.