Savers squeezed by low interest rates

Savers are now counting negative returns on their money once inflation and tax are taken into account. Even the declining inflation rate could not protect the depositors from seeing their savings get squeezed or become negative in real terms. Most of the banks now offer 5-5.75% interest against fixed deposits of one-year tenure. In other words, if a depositor keeps BDT 100,000 at a bank for one year, he will get a maximum of BDT 5,750 as interest earnings on the deposit. And after deducting tax at 15.0%, the amount comes down to BDT 4,887.5, meaning the net interest income stands at only 4.9%. If the depositor is a taxpayer with an electronic tax identification number, he will pay 10.0% tax and his net interest income will be BDT 5,175 or 5.17% a year. The rule of thumb is that after tax, the rate of interest earned on savings must be greater than the rate of inflation in order for the money to actually be growing. And in both the cases here, the depositors’ returns are lower than the inflation rate, meaning their money has lost value in real terms. The latest government figure shows the monthly inflation rate went down to 5.5% in May. It means a product or service that cost BDT 100.0 in May last year now costs BDT 105.5.

Source: http://www.thedailystar.net/business/savers-squeezed-low-interest-rates-1243594

BASIC Bank seeks to raise its authorized capital

Scam-hit BASIC Bank has sought approval from the finance ministry for increasing its authorised capital to BDT 55 billion from existing BDT 25.0 billion, officials said. Khondoker Md Iqbal, managing director of the bank, in a letter sent to the finance ministry sought the approval, they added. The board of directors of the bank in its 385th meeting decided to raise the authorized capital from existing BDT 25 billion to BDT 55.0 billion, according to the bank data. The meeting also decided to change the face value of its ordinary shares to BDT 10.0 from BDT 100.0 each. The proposal will be placed before the 27th Annual General Meeting (AGM) of the bank scheduled for July 14 next. At present, the paid-up capital of the bank is BDT 10.9 billion. However, the bank received BDT 16 billion in two instalments from the government last year to replenish its capital shortfall. The bank was also provided with funds by the government earlier to meet its capital shortage.

Source: http://print.thefinancialexpress-bd.com/2016/06/22/144781

Axe hangs over tax at source for exporters

The government is now set to reduce the proposed tax at source for export-oriented industries for fiscal year 2016-17 following request from the stakeholders and exporters. The tax at source on export bill has been proposed to increase to 1.5%, from the existing 0.6%, in the new budget placed in parliament on June 02 and presently under discussion. Official sources said the tax authority is considering fixing the rate at 1.0% for the upcoming fiscal year (FY). They said in the income tax ordinance the tax rate for export-oriented sector is 0.8 per. The government every year revises the rate through issuing Statutory Regulatory Order (SRO). Last year, the tax rate for apparel exporters was 0.3% while 0.6% for other sectors. Although exporters have been demanding revision in both corporate tax and tax at source in the Finance Bill 2016, only reduction in the tax at source is under consideration of the government. With the increase in the tax at source, the income tax wing estimated BDT 20.0 billion in additional revenue in FY 2016-17. Official sources said the tax authority is considering fixing the rate at 1.0% for the upcoming fiscal year (FY). They said in the income tax ordinance the tax rate for export-oriented sector is 0.80 per.

Subject:
http://print.thefinancialexpress-bd.com/2016/06/22/144787
http://newagebd.net/236824/govt-cut-proposed-tax-source-export/

Inflow of FDI rises by 44.0%: World Investment Report

Inflow of Foreign Direct Investment (FDI) in Bangladesh has increased by 44 per cent in 2015, according to the World Investment Report (WIR). United Nations Conference on Trade and Development (UNCTAD) will officially publish the report across the world today (Wednesday). The Board of Investment (BoI) in Dhaka will organise a press conference to formally unveil the report in Bangladesh. “Thanks to rising FDI in labor-intensive manufacturing, inflows to Bangladesh jumped by 44 per cent to $ 2.2 billion, a historically high level,” said the report. “FDI in the textile and garments industries remains strong in Bangladesh, as does FDI in power generation,” it added. “Reinvested earnings in the country continued to rise, exceeding the value of the equity component.” The report also said total inflows to South Asia increased by about 22 per cent to $ 50 billion due to huge increase in India.

Source: http://print.thefinancialexpress-bd.com/2016/06/22/144785

Exports fetch USD 30.7 billion in outgoing fiscal: Commerce Minister

Bangladesh earned USD 30.66 billion in the outgoing fiscal year till May from exports, 8.95% up from the previous fiscal year, Commerce Minister Tofail Ahmed told the House Monday in reply to a scripted query from treasury bench member Nizam Uddin Hazari (Feni-2), reports BSS. On another question from Begum Washika Ayesha Khan (women seat-31), he said that readymade garment products worth USD 23,762.95 million were exported during the same period. Bangladesh earned USD 25,491.40 million in the last fiscal year (2014-15) by exporting RMG products, he added. Tofail said the government has undertaken various measures to boost the exports of RMG goods.

Source: http://print.thefinancialexpress-bd.com/2016/06/22/144751

No change in VAS revenue sharing until new guideline

Until the finalization of Value Added Services guideline, the cellular phone operators in the country could not change the revenue sharing with the third party VAS providers. The government is going to issue a directive to maintain status quo on VAS revenue sharing against the backdrop of drastic reduction of revenue sharing by the cellular phone operators. Talking to BSS, posts and telecommunications state minister Tarana Halim Tuesday said the VAS Guideline has been posted on the website seeking public opinion for finalisation. But, few operators have taken a move to reduce the revenue sharing with the VAS providers which is not acceptable, she said, adding: ‘to stop the move of revenue sharing reduction, I will ask the telecom regular to issue a directive for marinating ‘status quo’ on it until the finalisation of guideline.’ Third party VAS providers alleged that market leader Grameenphone has issued letter to them saying it will reduce the revenue sharing to 30.0% from the existing 50.0%. If they (third party) do not agree with the condition, it would not renew the agreement, they said. Followed by Grameenphone, another operator Robi has moved to trim revenue sharing to 25.0% from existing nearly 35.0%.

Source: http://newagebd.net/236817/no-change-vas-revenue-sharing-new-guideline/

Petrobangla to pay USD 90.0 million a year to use LNG terminal

Petrobangla will pay about USD 90.0 million a year to use the planned LNG terminal of US-based Excelerate Energy in Moheshkhali, as the government seeks to speed up the import of gas to meet growing demand. The amount will be higher when taxes, value added taxes, insurance and other charges are included. The power, energy and mineral resources ministry may place a proposal today on the use and implementation agreement of the liquefied natural gas terminal at the meeting of the cabinet committee on purchase. In March this year, Petrobangla and Excelerate Energy signed an agreement to set up Bangladesh’s first LNG terminal, known as a floating storage and re-gasification unit, on the Moheshkhali Island in the Bay of Bengal to handle imported LNG. The unit will supply gas to Chittagong that has been facing an acute gas crisis for a long time now. Bangladesh now produces 2,700 million cubic feet of gas a day against a demand of 3,300 MMCFD. As per conditions, Excelerate Energy has set up a separate company — Excelerate Energy Bangladesh Ltd — that will supply 500 MMCFD of gas for 15 years.

Source: http://www.thedailystar.net/business/petrobangla-pay-90m-year-use-lng-terminal-1243585

National Economic Council approves BDT 12.8 billion power line expansion project

The government Tuesday approved a power distribution line expansion project in the western region of the country at a cost of BDT 12.78 billion in a bid to provide electricity to more people. Presided over by Prime Minister Sheikh Hasina, the Executive Committee of the National Economic Council (ECNEC) at its meeting approved two fresh projects including power distribution one and revised three other projects. After the meeting, Planning Minister AHM Mustafa Kamal told journalists that under the BDT 12.8 billion ‘Expansion of power distribution system and up gradation in west zone area project’, the West Zone Power Distribution Company Limited (WZPDCL) would cover new consumers upgrading its distribution system. According to the project proposal, the state-owned WZPDCL will install 33-kilovolt capacity 1054.3 kilometers of distribution lines and 11-kv 62-km lines, 33/1-kv capacity 63 sub-stations and installation of 11/0.4 kv capacity 1722 distribution transformers by June, 2020.

Source: http://print.thefinancialexpress-bd.com/2016/06/22/144776

Finance Minister: Power generation in Rooppur plant to be costly

Finance Minister AMA Muhith said the power generation cost in the proposed Rooppur Nuclear Power Plant will be higher than usual. He said cost of 2,400MW power generation in nuclear power plant is usually USD 3.5 billion, but in the proposed plant the cost will be USD 11.0 billion. “This will be really expensive for countries like Bangladesh, but we are looking into the matter and will assess the per unit cost. There will be a committee to work on the matter,” finance minister told journalists on his return from an investment conference in Russia yesterday. He further said the issue of environment surrounding the Rooppur plant is also important and in Russia he has visited two under construction nuclear power plants and observed the environmental issues there.

Source: http://www.dhakatribune.com/business/2016/jun/22/muhith-power-generation-rooppur-plant-be-costly#sthash.LKVFLtHl.dpu

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