Business
BB selling US dollar at Tk 92.5 after further devaluation
Bangladesh Bank (BB) has fixed the exchange rate of US dollar at Tk92.50 by devaluing the local currency by Tk0.50.
The central bank on Monday sold $10.5 crore to banks at the rate of Tk 92.50.
As a result, taka has been depreciated by Tk6 in the last two months in a bid to stabilize the volatile forex market amid a huge rush of import demand.
READ: Banks must focus on digitalization, cyber security: BB Governor
This is the Bangladesh Bank rate. The commercial banks are charging Tk 95 per dollar for opening LCs while banks are paying Tk93 for remitters per US dollar.
Md Serajul Islam, executive director and spokesperson of BB, told UNB that the central bank is not fixing the exchange rate rather the Bangladesh Bank accepting an exchange rate which was fixed by Association of Bankers Bangladesh (ABB).
Budget does not reflect woes of pandemic-hit new poor: SANEM
South Asian Network for Economic Modeling (SANEM) on Monday said that there is no effort to mitigate the woes of the pandemic-hit people whose incomes were severely affected in the budget.
A large portion of the lower middle income group fell below the poverty line losing their income sources during the pandemic, which has been exacerbated by ongoing inflation and price hike. But there is no initiative to support them.
Selim Rahan, executive director of SANEM, said this while addressing post-budget discussion on the proposed budget for the fiscal year 2022-23, which was placed at the parliament on Thursday (June 9).
Selim said the new generation has created helplessness and has become poor due to the impact of the pandemic, but their voice is not reflected in the budget.
Mentioning data mismatch, he said many issues were not included in the budget with clear and updated information, which is also a problem to resolve the issues.
“If we do not identify the problem properly, we will not be able to walk the path of solution,” he added.
The proposed budget did not properly notify the government policy on market monitoring and maintaining market supply chain, or increasing institutional capacity building which is very important, Selim said.
READ: SANEM sceptical about 5.6% inflation target
He said there was no Covid-19-centric government survey. What kind of problems people have had to face, how these problems can be solved has not been identified.
Dr. Sayema Haque Bidisha, professor DU and SANEM research director, research team members Farhin Islam, Tuhin Ahmed, Israt Sharmin, Nadim Uddin Afia, Mobashir Tisha, Samanat Rahman, Kaniz Fatema, among others, present in the function.
WTO Conference: Bangladesh speaks against sudden ban on food export
Commerce Minister Tipu Munshi has urged the WTO to impose an embargo so the exporting countries can’t abruptly stop export of food grains without prior notice to the importers.
The minister placed Bangladesh’s position on the first day of the ministerial-level conference of the World Trade Organization (WTO), highest policy-making forum in global trade, held at WTO headquarters in Geneva, Switzerland.
Tipu said, “The current situation shows a global food shortage, the food issue has become very important for human survival. It would not be right to suddenly impose an export ban on essential food items.”
Also read: Reliable accreditation infrastructure crucial for strengthening export
The importing countries must be alerted so they can take preparation and alternative steps, he said.
The commerce minister said that to minimize risk of food security, LDC countries need to have the opportunity to stockpile food on a large scale at the government level.
Bangladesh will support WTO reforms especially in the agriculture sector. Reforms must be inclusive and transparent, where the concerns of each member must be taken into account, he said.
Also read: Barind region's mangoes to be marketed globally for export
Speaking at a press conference on the first day of the MC-12 summit, WTO Director General Engoji Okonzo Aiwala said the Russia-Ukraine war has made the food crisis a major challenge for the world.
Following the passage of the LDCs, member states have been urged to come to a consensus on other important issues, including the continuation of trade benefits and sudden ban of food grain exports.
Tipu is leading the Bangladesh delegation to the 164-nation WTO meeting.
Read WTO holds big meeting to tackle vaccines, food shortages
BGMEA wants to keep 0.5pc source tax for next 5 years
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the government to keep the source tax on export earnings unchanged for at least for next five years to help the sector overcome difficult moment.
BGMEA president Faruque Hassan made the appeal during a post-budget press conference at a city hotel on Monday.
BGMEA first vice president Syed Nazrul Islam, senior vice president S.M. Mannan (Kochi), vice president Md. Shahidullah Azim, vice president (finnace) Khandoker Rafiqul Islam and BGMEA directors were present.
The government has proposed increasing the source tax on export profits to 1 per cent from the existing 0.5 per cent in the next fiscal year 2022-2023.
Also read: Bangladesh to stay safe, sustainable apparel sourcing destination: BGMEA
“If the industry sustains, revenue and new employments will be generated,” said the BGMEA chief, noting that the export volume is expected to reach US$ 41 billion in the outgoing fiscal year 2021-2022.
Hassan said overall revenue can be boosted without increasing source tax on expert earnings by raising capacity of the industry.
He also said they want to achieve export target of US$ 45 billion in the next fiscal year.
Also read: BGMEA hopes for continued support of German govt to RMG industry
The BGMEA chief also demanded 10 per cent special incentive on non-cotton garments export in an effort to encourage more export through investment in non-cotton sector.
Bangladesh total RMG exports’ 74 per cent are made of cotton while the global share of total textile consumption is only 25 percent.
The apparel makers say demand for non-cotton products is on the rise due to rapid change in consumers’ lifestyle and increasing demand for sustainable and environment-friendly products.
The BGMEA chief said they had a demand to withdraw 10 per cent tax and they still think it is logical to keep the cash incentives out the tax net as it is not an income through business.
Hassan also demanded zero duty on import of solar panels to promote environment-friendly sustainable growth of the industry. The government has proposed 1 percent import duty on solar panels for the fiscal year 2022-2023.
“This is now an industry of US$ 41 billion with government’s policy support,” he said, hoping that the government will consider the recommendations to help the industry grow further.
On BM Container depot fire, the BGMEA president said most of the containers destroyed in the fire were loaded with garment products. “This (fire) caused more damage to our image than financial loss.”
Reliable accreditation infrastructure crucial for strengthening export
Industries Minister Nurul Majid Mahmud Humayun said on Sunday that internationally accredited and reliable national accreditation infrastructure is crucial for strengthening export of local products and services.
The government has established a quality accreditation infrastructure ecosystem, he said at a seminar on the occasion of ‘World Accreditation Day 2022’ organized by Bangladesh Accreditation Board (BAB) and Dhaka Chamber of Commerce & Industry (DCCI) in the capital.
As a part of it, the efficiency of Bangladesh Accreditation Board has also been improved a lot and BAB is now well equipped to provide necessary accreditation. “Government is also considering formulating a national quality policy,” he added.
Also read: In May export income falls to 9-month low at $3.83 bn: EPB
“Our testing labs should be well equipped with modern technology so that our accreditation is accepted in the world market,” said the minister.
State Minister for Industries Kamal Ahmed Mojumder said accreditation is essential for the implementation of sustainable development goals (SDGs) enhancing the technological advancement and reliability.
Consumers’ satisfaction, confidence and export development are very important for our economic progress, he added.
Meanwhile, Zakia Sultana, secretary of the Ministry of Industries, said, “Due to unplanned industrialization worldwide and massive economic activities, we can see a negative impact on climate change where Bangladesh is no different. In that situation, if we are able to comply with the accreditation process for both goods and services, it will help us to ensure a better livable world for the next generation.”
Also read: Govt urged to provide policy support to plastic toy industry for its export-earning potential
DCCI President Rizwan Rahman also urged to implement advanced learning to our industrial sector and emphasized on strong collaboration with the international accreditation and quality assurance agencies to enhance business competitiveness in this changing business environment.
The main theme of this year’s Accreditation day is ‘Accreditation: Sustainability in Economic Growth and the Environment’.
IBTRA Chattogram holds entrepreneurship development programme
Islami Bank Training and Research Academy (IBTRA) Chattogram recently conducted a month-long entrepreneurship development training programme.
Twenty-five entrepreneurs received certificates for completing the training.
Also read: IBTRA 194th internship programme closing ceremony held
Arif Hossain Khan, director of the Bangladesh Bank Chattogram office, was present at the closing ceremony of the programme as chief guest. SM Rabiul Hassan, principal of IBTRA, presided over it.
Meah Md Barkat Ullah, head of IBBL Chattogram South Zone, Mohammad Nurul Hossain, head of Chattogram North Zone, and Mohammad Ataul Hoque Sirazee, head of IBTRA Chattogram office, also spoke at the programme.
Read IBTRA organises workshop on challenges of 4IR
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.
Budget FY23 to put local refrigerator, freezer industry at stake: Experts
Tax concessions given to the refrigerator and freezer assembling industry in the proposed budget for the fiscal year 2022-23 will raise the number of assemblers, instead of the actual producers, according to experts.
Lowering tariffs on the import of spare parts for the local refrigerator and freezer production industry will further boost the assembling industry, hurting the government's plans to reduce overall imports, they added.
Also, investments in the full-fledged local refrigerator and freezer manufacturing industry will be at stake.
Read: Law bars asking questions about laundered money: Finance Minister
Finance Minister AHM Mustafa Kamal said, "We are discouraging imports of products that are locally manufactured. If the products that are produced in the country are used by us, local production will go up. We do not want these products imported from abroad."
However, the Internal Resource Division of the finance ministry issued a statutory regulatory order (SRO) with the budget proposals where the tariff on the import of spare parts has been fixed in two categories of local refrigerator and freezer manufacturing industry.
According to the SRO, a company will be considered a category 1 refrigerator manufacturer if it produces main parts and one or more important parts of the refrigerator.
A company that produces only the body cabinet of the refrigerator will be considered a category 2 refrigerator and freezer manufacturer.
This indicates no difference between the full-fledged manufacturing and assembling industries.
Read: Good governance major challenge to implement budget: FBCCI
The move will discourage the establishment of full-fledged manufacturing industries, the experts said. "Local entrepreneurs will be more interested in setting up assembling plants instead of full-fledged manufacturing ones."
Md Iftekhar Hossain, professor of economics at Dhaka University, said policy and duty support should not be given to the assemblers in the sectors where there are full-fledged manufacturing industries capable of meeting local market demands.
"The government has always given importance to boosting the domestic industries. It is also good for the country's economy. However, the decision has to be made according to the production volume," Economist Abu Ahmed, honorary professor at the economics department of Dhaka University, said.
"If the finished products are contributing more than the production in the assembling industry, then the producers' benefits should be increased."