BD’s outbound investment more than triples

The outflow of foreign direct investment (FDI) from Bangladesh to other countries surged by more than three times in a year. The outward flow means Bangladeshi business entities or Bangladesh-based multinational companies are investing in other countries across the world. The country’s outbound FDI reached $170 million in 2017, according to the Word Investment Report (WIR) 2018 statistics. The amount was $41 million a year ago. The WIR also showed that the stock of FDI outflow stood at $362 million at the end of 2017. But the inflows of FDI to Bangladesh dropped by 7.8 per cent last year, the UNCTAD’s flagship publication noted. The inflows reached around $2.15 billion in 2017, which was $2.33 billion in 2016. Among the Least Developed Countries (LDCs), Myanmar received the highest amount of FDI from the multinational companies (MNCs). The amount was $4.30 billion, which was 45.20 per cent higher than the previous year, according to WIR 2018.

Source: https://thefinancialexpress.com.bd/economy/bangladesh/bds-outbound-investment-more-than-triples-1528604491

Consumers hit by higher VAT

The burden of value-added tax is set to get heavier from next fiscal year as the revenue authority looks high and low to find ways to collect the major share of its ambitious target from the indirect tax. Of the total revenue collection target of Tk 296,201 crore in fiscal 2018-19, VAT, which is borne by consumers, is expected to bring in 37.32 percent of the amount, followed by income tax, import and supplementary duty. To attain the lofty target, the NBR has increased the VAT and supplementary duty rates on 56 goods and services, meaning consumers will have to pay higher prices. Similarly, consumers will also have to bear the burden of increased prices for hike in SD rates on 17 items, including energy drinks, cosmetics, toiletries, bathtub, jacuzzi, by up to 10 percentage points. Indirect tax has been given more emphasis than income tax in revenue collection, said the Centre for Policy Dialogue in its analysis on fiscal measures for fiscal 2018-19 on June 8. The number of slabs of VAT rates has been brought down to 5 from 9 at present, and in this process of condensation, the VAT on some items becomes lesser too. From next year, VAT for 10 items including drugs for treatment of cancer and kidney disease as well as cheap bread, buns, cakes, biscuits and rubber sandals has been withdrawn.

Source: https://www.thedailystar.net/business/consumers-hit-higher-vat-1589467

Govt proposes hike in penalty

The Bangladesh government has proposed increasing the rate of penalty by 10 times for offences related mainly to tax deduction at source and submission of withholding tax returns under the income tax law in the national budget for the fiscal year of 2018-2019. Finance minister made the proposal incorporating some amendments to the Income Tax Ordinance-1984 in the Finance Bill-2018.
Officials of the National Board of Revenue said that the move had been taken to rationalize the rate of penalty as the existing rates were very low compared to the degree of offences. Taxpayers, mainly withholding tax deducting authorities including employers, will face an additional amount of penalty for various types of noncompliance with the tax law, rules and regulations of the tax authority once the proposal is passed by parliament by the end of June. Muhith proposed raising the principal amount of penalty to Tk 5,000 (one time) for the noncompliance from the existing Tk 500 (one time). Defaulters will also have to pay Tk 1,000 every month for continuous failure in compliance in the case of principal penalty amount Tk 5,000 (one time). Currently, the rate of penalty for continuous failure is Tk 250 per month.

Source: http://www.newagebd.net/article/43388/govt-proposes-hike-in-penalty

Cash incentive for export of pharma raw materials

The government has extended 20 percent cash incentive to pharmaceutical raw material manufacturers as it earnestly looks to boost overseas shipments. The incentive will become effective from July last year, according to a notice from the central bank yesterday. Exporters who manufacture the active pharmaceutical ingredient at their own factories will qualify for the incentive. They will have to apply within 60 days to enjoy the benefit. Those produced in factories housed in export processing zones and economic zones will not come under the purview of the facility. The amount of the cash incentive, which is provided to the unscrupulous persons, would be deducted from the errant banks’ current account maintained with the central bank.

Source:
https://www.thedailystar.net/business/cash-incentive-export-pharma-raw-materials-1589440
http://www.newagebd.net/article/43391/bb-issues-instruction-over-cash-incentives-for-pharma-ingredient-export

LNG distributors seek price hike at retail level

All the state-owned gas distribution and transmission companies including Titas Gas have sought to hike gas prices by 75 per cent on average for different consumer groups at retail level. Thus, the price hike proposals are not for household and commercial consumers. The increase in price will mainly affect large scale consumers like power plants, fertilizer factories, captive power plants, industries, and CNG refueling stations. The official sources said the household and commercial (hotel, restaurants etc.) consumers were kept outside the gas price hike purview considering the upcoming general election billed for December this year. An official document, obtained by the agency, reveals that the largest gas distribution company Titas has proposed to raise 206 per cent price for power plants as it proposed Tk 10 per cubic metre (CM) for power plants in place of exiting price of Tk 3.16. The gas price for fertiliser factories were proposed to hike the highest 372 per cent where it sought the price to be Tk 12.80 per CM against the existing rate of Tk 2.71 per CM. The captive power plants’ gas price was proposed to be Tk 16 per CM against Tk 9.62 while Industries gas price was proposed at Tk 15 per CM against the existing Tk 7.76 per CM and CNG gas price was proposed to be Tk 40 per CM against existing rate of Tk 32.

Source: https://thefinancialexpress.com.bd/trade/lng-distributors-seek-price-hike-at-retail-level-1528633849

BSRM to set up subsidiary company in Hong Kong

Bangladesh Steel Re-Rolling Mills, a concern of Chittagong-based BSRM Group, has decided to set up a subsidiary company in Hong Kong. The name of the subsidiary company will be “BSRM (Hong Kong) Limited”. “This subsidiary company will be engaged in trading of steels products, procurements and inspection of raw materials/spare parts etc. for BSRM Group,” the company said in a disclosure recently. Each share of the company, which was listed on the Dhaka bourse in 2015, closed at Tk 102.40 on Thursday at the DSE. The company disbursed 10 per cent cash and 10 per cent stock dividend for the year ended on June 30, 2017. Sponsors hold 40.94 per cent stake in the company, while institutions 16.43 per cent, foreign investors 22.31 per cent, and general public the remaining 20.32 per cent as on May 31, 2018, according to DSE data. The company’s paid-up capital is Tk 2.14 billion while authorized capital is Tk 5.0 billion and total number of securities is 214.60 million. In nine months from July 2017-March 2018, the company’s total turnover stood at Tk 24.54 billion (un-audited). Profit for the period stood at Tk 1.35 billion in nine months for the period ended on March 31, 2018. The company’s earnings per share (EPS) stood at Tk 3.78 for January-March 2018 quarter as against Tk 1.56 for January-March 2017. The net asset value (NAV) per share was Tk 57.04 as on March 31, 2018 and Tk 55.75 as on June 30, 2017.

Source: https://thefinancialexpress.com.bd/stock/bangladesh/bsrm-to-set-up-subsidiary-co-in-hong-kong-1528614824

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