local-business
Social stability a must to implement budget: Planning Minister
Planning Minister MA Mannan on Sunday said the economy is facing tough challenges now, and social stability is a must in such a situation to implement a budget whatever its size.
Bangladesh Bank and National Board of Revenue are working under pressure to control inflation and keep fortunes of fixed and lower-income segment stable, he said.
Also read:Growing per capita income contributed to reduce child marriage: Planning Minister
Mannan said this while speaking as the chief guest in the post-budget discussion organized by American Chamber of Commerce in Bangladesh (AmCham), held in a hotel in Banani on Sunday.
Former adviser of a caretaker government AB Mirza Azizul Islam, Ahsan H. Mansur, Executive Director, Policy Research Institute of Bangladesh (PRI), and Masrur Reaz, Chairman of Policy Exchange, Bangladesh spoke on the occasion.
Mirza Aziz said the budget size is acceptable but allocation in different sectors needs to be revised considering present economic challenges.
He also urged reform of the NBR and bond market, both of which need modernization and reformation to attract investment as well as foreign direct investment.
Ahsan H Mansur presented a keynote paper on different sides of the proposed budget and illustrated that two major problems have emerged: sharply widened trade account deficit due to a surge in imports leading to an unsettled foreign exchange market, and inflationary pressure.
Also read:Now is good time to invest in Bangladesh: Planning Minister
Global price shock in the aftermath of the pandemic due to the ongoing Russia-Ukraine war has led to a decline in inflow of workers’ remittances following reopening of international travel and the widening of the gap between the kerb market and interbank “exchange rate,” he added.
Slow and inadequate flexibility in the exchange rate and the inability to use monetary policy given the interest rate caps on the lending and deposit rates, are acting as restraints on policy, he said.
Banks must focus on digitalization, cyber security: BB Governor
Bangladesh Bank governor Fazle Kabir on Sunday said banks have to raise attention to digitalization along with investing more to protect financial operations from hackers.
He said with the development of online banking technology, threats are also being increased globally, banks have to monitor and vigilance round the clock on the security issues.
Also read: Inflation, unstable forex rate major challenges: BB governor
Kabir was addressing as the chief guest the opening of two-day cyber security summit titled 'Building Cyber Resilience for Banks' to make bankers aware about cyber security and prepare them for the future.
“As cybercrime grows in this age of digital banking, we must prepare ourselves to take risks. We believe that strong collaborative responses and knowledge sharing are essential to address these risks,” he added.
Also read:BB to set uniform exchange rate to stabilize volatile dollar
He hoped that the participants will return to their respective workplaces with sufficient knowledge about cyber security and prepare themselves for future challenges.
Selim RF Hussain, Chairman of Association of Bankers Bangladesh (ABB) presided over it. It was also addressed by Debdulal Roy, Bangladesh Bank Executive Director, Md Ataur Rahman Prodhan, ABB Vice-Chairman and Sonali Bank MD, Mohammed Haider Ali Miah, ABB Vice-Chairman and EXIM Bank MD, Khondoker Rashed Maqsood, ABB Secretary-General and Standard Bank MD, among others, spoke in the function.
NBR to install 10,000 EFD to prevent VAT evasion
The National Board of Revenue (NBR) will install 10,000 Electronic Fiscal Devices (EFDs) in Dhaka, Chattogram and other big cities in the fiscal year 2022-23 in a bid to prevent Value Added Tax(VAT) evasion.
Finance minister AHM Mustafa Kamal in the proposed budget of 2022-23 kept an allocation to install EFDs in different chain and super shops.
Also read: NBR slaps additional duty on 135 luxury items to discourage import
EFD is an improved version of Electronic Cash Register or ECR, which is imported by the NBR.
If EFD is used in business, VAT money will be automatically transferred to the main server of NBR.
In this system, the traders cannot hide the sale information and the real information of daily transactions will be transferred to the NBR server which will help to reduce fraud, NBR sources said.
In the budget speech, the finance minister said, "In order to increase revenue collection in various types of retail and wholesale businesses, two years ago, in the budget of 2020-21, for the first time, a state-of-the-art electronic fiscal device system was introduced."
Since then 4,595 machines have been installed. A total of 10,000 EFD machines are planned to be installed in various businesses by June 2023.
"We are in the process of setting up the machine through outsourcing as well as keeping the programme running. As a result of this step, I hope that the collection of VAT will reach the desired level by 2026,” he added.
In this year's budget, the target for total revenue collection through NBR is Tk 3.70 lakh crore. Of this, Tk1.36 crore will come from VAT, which is 37 percent of the total collection.
Also read:Income Tax Wing of NBR racing to meet target in last 4 months of fiscal
Officials at the NBR's VAT department said huge amounts of VAT are evaded at the retail and wholesale levels.
Revenue earning will be increased all retail and wholesale businesses are brought under the machine system, they said.
Good governance major challenge to implement budget: FBCCI
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Saturday said good governance is a major challenge in implementing the proposed budget for the fiscal year 2022-23.
FBCCI president Md. Jasim Uddin came with the remark at a press conference on post-budget reaction held at FBCCI Building in Motijheel.
He said, "The size of the budget is very timely to implement the government's commitment to meet the needs and aspirations of people in face of inflation due to Covid-19 pandemic and the Russia-Ukraine war.
He noted the importance of ensuring clear direction and planning for the continuous development of efficiency, transparency, accountability and quality of supervision in the implementation of the proposed budget.
He proposed to include in the budget- employment growth, increased domestic investment, increased food production and continued fertilizer subsidies, emphasis on health, education and human resource development, export diversification, job creation and rural development and completion of PM incentive packages and expansion of social security initiatives.
Read: FBCCI to work for restoring confidence in e-commerce sector
Jasim also expressed his dissatisfaction for not implementing the FBCCI’s recommendations related to tax and VAT.
Replying to a query, the FBCCI president said the trade body does not support money laundering and it brings back the process by paying a nominal tax. This will discourage honest business in the country, he said.
FBCCI senior vice president Mostafa Azad Chowdhury Babu, BKMEA president Mohammad Hatem, DCCI president Rizwan Rahman and leaders of various organizations were present at the press conference.
Finance Minister AHM Mustafa Kamal placed the budget of Tk 6.78 trillion for the fiscal year 2022-23 on June 9.
The proposed budget’s expenditure for the fiscal year 2022-23 is 14.25 percent more than the revised budget for the outgoing fiscal year. The proposed budget is 12.32 percent more than the original budget of fiscal year 2021-22.
Law bars asking questions about laundered money: Finance Minister
Finance Minister AHM Mustafa Kamal has said the government is obliged by a law that those who will bring back their laundered money home will not be questioned any more.
Defending his move, announced in the national budget for FY2022-23, he said most of such money is undeclared and smuggled out due to the faulty system.
He made this remark while addressing a post-budget press conference at Osmani Memorial Auditorium in the city on Friday.
Also read: Budget offers no good news for lower, middle income groups: CPD
Fielding a volley of questions on the issue, he said many countries in Asia, America and Europe have declared amnesty for the money launderers.
According to a provision declared in the newly placed national budget, no authority, including the income tax collectors, shall raise any question as to the source of any asset located abroad if a taxpayer pays extra taxes on such assets.
The proposed rate is 15 per cent for immovable property not repatriated to Bangladesh, 10 per cent for movable property not repatriated to Bangladesh and 7 per cent for cash and cash equivalents repatriated to Bangladesh. This will take effect from July 1.
A question was asked by a reporter that in the past the government had declared a "Truth Commission" and provided scope for legalising illegal money through paying tax, but later the names of the persons who took the opportunity were disclosed.
So, how could people trust the new assurance and take the opportunity?
Answering the question, Kamal said the government will use some tools so that people will be encouraged to bring the smuggled illegal money back.
"But this will not discourage or undermine those people who regularly pay taxes", he added.
Supporting his view Agriculture Minister Abdur Razzak, who present on the occasion, supported the government move in this regard and said that the Truth Commission was formed during the caretaker government which was a non-constitutional government.
"But Awami League is a constitutional government and the relevant law is passed by the government to give the guarantee to the people not to raise any question in future", he added.
The finance minister claimed that the newly unveiled national budget will bring benefits for all the segments of the society, specially, for the poor.
"I was born in a poor family and raised up from poverty. So, I do feel the pain of the poor", he said, adding that so many measures including allocation for social safety-net programmes were increased in the new budget.
Budget offers no good news for lower, middle income groups: CPD
The Center for Policy Dialogue (CPD), a private think-tank, has found no good news for lower and middle-income groups in the newly announced budget, voicing doubt about government’s ability to lower the inflation rate at 5.6 per cent.
Finance Minister AHM Mustafa Kamal placed the budget for FY2022-23 expecting inflation rate to come down to 5.6 per from over 6.29 per cent (in April as per BBS).
Also read: Budget to make economy stronger: Finance Minister
Experts and economists believe the inflation has hit over 10 per cent.
As a result, lower, middle class and fixed income groups will face challenges to run a family as the commodity prices are unlikely to come down if the inflation trend remains higher.
The CPD made the observation at a press conference in a city hotel on Friday, a day after presentation of Bangladesh’s national budget of Tk6.78 trillion for the upcoming fiscal year starting from July 1.
“The prices of all kinds of goods including fuel oil and food products are increasing in the international market. Commodity prices have been rising in the world market since the Covid-19 situation began to normalize,” said Dr Fahmida Khatun, executive director of CPD.
She said, "The budget has not taken adequate steps to reduce the prices of essential commodities. It was necessary to reduce the prices of 29 commodities including rice and pulses, but it did not happen. The CPD had recommended a reduction in taxes to reduce the prices of commodities. But that too was not kept.
Budget FY23: Lower allocation for key mega projects worries FICCI
The Foreign Investors' Chamber of Commerce and Industry (FICCI) has raised concerns about the reduced allocation for some key mega projects in the proposed national budget for the fiscal year 2022-23.
The move will result in slowing the implementation of the projects as well as raise the total cost of the projects, according to FICCI.
"We feel instead of reducing the allocation in mega projects, the government could concentrate on enhancing the quality of spending, which could bring further efficiency as well as generate employment," the apex chamber of multinational companies doing business in Bangladesh said.
It also expressed concern about financing the deficit from banking sources, as that may tighten the liquidity situation.
Also, FICCI has said an entity is required to pay the Workers Profit Participation Fund (WPPF) as per the provision of labour law.
"It is not a dividend but rather an expense, a portion of which is also payable to the government. It is an expense not at the discretion of the company but a compulsion. Moreover, an individual is required to pay tax on it for an amount exceeding Tk50,000. Disallowing such a legitimate business expense will increase the tax burden of the compliant businesses," FICCI said.
"No significant changes have been made in section 56 of the ITO, 1984 except for bandwidth and other payments. The current TDS rate in section 56 is extremely high which should have been rationalised."
"Considering the overall existing macroeconomic scenario and increasing inflation rate, we feel the tax ceiling for individuals should have been increased, which has not been changed for the last two fiscal periods," FICCI said.
The budget proposed amnesty on the declaration of foreign assets in tax return by paying tax at different rates.
"We do not encourage this kind of amnesty, but as the foreign minister mentioned to bring the undisclosed monies from abroad back to the country to shore up reserves as a reason we appreciate. However, out of the three options, the one where cash and equivalents are brought back to Bangladesh seems to be the only one that supports the intention."
"The other two options where moveable and Immoveable properties are kept outside of Bangladesh may well go against the stated objective, in fact, these two may result in more money going out of the country," the chamber said.
The corporate tax rate for certain listed and non-listed companies will be cut by 2.5 percent subject to certain conditions.
"Corporate tax reduction has become a consistent change in tax policy which is welcoming. But considering the current economic condition and infrastructure, the proposed cash transaction limit must be increased," FICCI said.
"Tax deduction at source from payment to raw material suppliers will be reduced to 4 percent from 7 percent which will minimize the gap between statutory tax and an effective tax rate of those suppliers. We still believe TDS should not be made applicable for the supply of raw materials."
"Reduced tax rates at 10/12 percent have been introduced for all general industries exporting goods and services. Insertion of the definition of export will reduce the complexities of the export of goods and services. We also believe that this sort of export-friendly initiative will bring export diversification and bring down the trade deficit with other countries."
IBBL signs MoU with BRB Hospital
Islami Bank Bangladesh Limited (IBBL) recently signed an agreement on corporate facilities with BRB Hospital.
Under the deal, IBBL cardholders, the bank's officials and their family members will get a discount, up to 25 percent, from the hospital.
Read: NOVOAIR offers two nights free hotel in Cox's Bazar
JQM Habibullah, deputy managing director of IBBL, and Dr Md Monsur Ali, director of BRB Hospital, signed the MoU in the capital.
Bangladesh yet to reap full benefits of Chinese market facilities: Speakers
Despite obtaining almost 98 per cent duty-free market access in China, Bangladesh cannot take the opportunities properly yet due to lack of aggressive export promoting activities, building a solid B2B linkage, establishing a local presence, and participating in online sales, speaker said on Wednesday.
They suggested focusing on product quality and diversification, and signing a trade agreement to boost Chinese investment-backed export expansion.
The observations came from the seminar on ‘Making the Most of Market Access in China: What Needs to be Done?’ jointly organized by Bangladesh China Chamber of Commerce and Industry (BCCCI) and Research and Policy Integration for Development (RAPID) in the city on Wednesday.
Ambassador of China to Bangladesh Li Jiming hoped that Bangladesh would be member of Regional Comprehensive Economic Partnership (RCEP) soon which will help Bangladesh to promote export and welfare by trade and investment facilitation.
“The relationship between Bangladesh and China is well in trade and investment. However, Chinese commercial bank can be set up in Bangladesh for the sake of financial cooperation more. There are a lot of projects under taking by Chinese companies in Bangladesh. Many mega projects will also complete soon,” he added.
Jiming also said Bangladesh has a brighter future. There is a meaningful industrialisation. “China government provides Bangladesh zero tariff export facilities. It’s a very crucial. We are working G2G as well.”
Read: Chinese investors can maximise profits by setting up industries in Bangladesh: Envoy
Commerce minister Tipu Munshi said, “Our apparels are exported more to the USA and European countries but the volume is lower in Chinese market. We have to work and make proper strategy to take the opportunities.”
He said Bangladesh is going to graduate LDC by 2026 and now they need a comprehensive action plan. “Besides, the gabs in different sectors should be addressed soon. And, more and more fairs and branding of our products are also requirement,” he added.
Presenting key-note paper, RAPID chairman Dr. Mohammad Abdur Razzaque said despite obtaining zero-tariff market access facility to most products, Bangladesh’s exports to China remain rather modest. Since 2021, China has provided Bangladesh duty-free market access in almost 98 per cent of tariff lines.
Prior to that, Bangladesh used to get similar market access in 61 per cent of Chinese tariff lines.
“Bangladesh exported to China $680 million in 2021 FY while Bangladesh imports around $13 billion from China each year. Bangladesh’s potential exports to China should be at least $3 billion,” the economist said.
He said China imports products from different countries every year worth around $2.7 trillion dollars. So, it has huge market.
“Bangladesh’s duty-free benefits will end with LDC graduation. Bangladesh should negotiate a trade agreement with China. As part of the agreement, China can consider Bangladesh as a regional manufacturing hub to supply to other markets,” the economist also said.
Read: 5,161 more Bangladeshi products to enjoy zero tariff benefits to Chinese market from July 1
He added that Chinese consumers are focusing more on high-quality products. Bangladesh should develop a long-term strategy for export promotion to Chinese as China will soon emerge as the world largest retail market.
RAPID executive director and also Dhaka University professor Dr M Abu Eusuf moderated the function and with BCCCI president Gazi Golam Murtoza in chair.
BCCCI Acting Secretary General Al Mamun Mridha said the trade gap between the two countries should be reduced. “Bangladesh can take the opportunities through product value addition and sipping cost should be reduced to facilitate trade.”
He also urged China investors to invest more in Bangladesh’s potential sectors like e-commerce and agriculture.
Vice Chairman of Export Promotion Bureau (EPB) AHM Ahsan said they scrutinise how to increase Bangladesh’s export volume.
“Our main exportable item is RMG. Our export growth is low in Chinese market despite obtaining more tariff facilities there. We have to work as per the demand of Chinese market,” he added.
NOVOAIR offers two nights free hotel in Cox's Bazar
NOVOAIR announced two nights of the free hotel on purchasing two return tickets to Cox’s Bazar route.
To enjoy this offer, tickets must be purchased from the NOVOAIR sales counter by June 30, and travel must be completed by July 31, said a media release.
NOVOAIR offered free room hotels in Cox's Bazar are:
Ocean Paradise Hotel & Resort, Hotel The Cox Today, Seagull Hotel, Neeshorgo Hotel & Resort, Windy Terrace Hotel, and Grace Cox Smart Hotel. Apart from this offer, NOVOAIR announced attractive holiday packages with other renowned hotels.
Also Read: NOVOAIR celebrates its 9th anniversary
NOVOAIR operates daily flights from Dhaka to Cox's Bazar at 7:45am, 8:45am, 10am, 11am, 2:20pm, and 4pm.
Similarly, flights from Cox's Bazar to Dhaka are operated daily at 9:20am, 10:20am, 11:35am, 12:35pm, 3:55pm and 5:35pm.
Apart from Cox's Bazar, NOVOAIR operates daily flights from Dhaka to Chattogram, Jashore, Saidpur, Sylhet, Barishal, and Rajshahi and international destinations in Kolkata, it added.
Read Novoair may resume flights to Kolkata from March 27