Tax benefit to spur growth of oceangoing shipping sector
Bangladesh’s fleet of oceangoing vessels is expected to expand in the coming years after the National Board of Revenue eased age rules for ships to qualify for VAT exemption during imports and cut advance income tax. The revenue authority said it would extend the value-added tax (VAT) exemption to import up to 25-year-old ships in the next fiscal year from the existing 22 years. It also relaxed the restriction on the sales of vessels over 5,000 deadweight tonnages. Importers will be able to sell ships after three years from the current five years from the next fiscal year. The NBR brought down the advance income tax (AIT) on vessel imports to 1 per cent for FY22 from 2 per cent in the outgoing fiscal year. Bangladesh spends $7-8 billion as freight charges every year to carry goods for its imports. The country has the opportunity to retain a portion of freight charges, ship owners earlier said. Currently, entrepreneurs have 70 ships plying on the international waters. The number of vessels, dry cargo vessels, tankers and container vessels doubled from 35 five years ago. Bangladesh had 85 oceangoing ships. But the owners sold off most of them in the face of declining freight rates, higher operating costs and removal of the VAT exemption on the imports and manufacturing of ships from fiscal 2014-15. Private investors showed renewed interest in buying ships after the NBR reinstated the VAT exemption in 2018 to accelerate the shipping industry’s growth.
Euro zone production stronger than expected
Euro zone industrial production was stronger than expected in April, driven by a more than doubling of durable consumer goods output from a year earlier as economies steadily reopened after COVID-19 pandemic lockdowns, data showed on Monday, reports Reuters. The European Union’s statistics office Eurostat said industrial output in the 19 countries sharing the euro rose 0.8 per cent month-on-month for a 39.3 per cent year-on-year surge. Economists polled by Reuters had expected a 0.4 per cent monthly and a 37.4 per cent annual jump. The biggest production gain in April against March was in durable consumer goods, where output rose 3.4 per cent after 1.2 per cent monthly declines in both February and March. In year-on-year terms, the gain in durable consumer goods output was a spectacular 117.3 per cent after a 34.5 per cent annual rise in March, with capital goods also surging 65.4 per cent year-on-year and intermediate goods up 38.7 per cent.
ACI stocks soar on news of Tk 84cr foreign investment
ACI stocks soared yesterday when news broke that its subsidiary ACI Motors is set to receive Tk 83.99 crore in foreign investment for the expansion of its vehicle manufacturing capacity. Stocks of ACI closed 2.51 per cent higher at Tk 269 at the Dhaka Stock Exchange (DSE). The plants in question are of Yamaha motorcycle and agro machinery. The company is also planning to set up a plant to assemble Foton-branded commercial vehicles. With the investment, the motorcycle plant’s annual production capacity will reach 1,40,000 units from 1,08,000. The ACI will issue 15.55 lakh convertible, non-cumulative preference shares worth Tk 100 each at a premium of Tk 440 per share. The new investment will reduce ACI’s shareholding in ACI Motors from 52.70 per cent to 46.80 per cent, the company added. ACI Motors is one of the market leaders in the distribution of agricultural machinery in Bangladesh and the sole distributor of Yamaha motorcycles in the country. The FMO will support access to mechanisation for farmers and help ACI Motors increase local value creation in the motorcycle segment, the FMO said about the investment in its website. Earlier, in 2020, the FMO bought 23.33 lakh convertible non-cumulative preference shares worth Tk 126 crore. Of the total foreign fund, including the previous investment, around 65 per cent will be used as capital expenditures while the remaining as working capital. Revenue of ACI Motors rose 1.67 per cent year-on-year to Tk 970 crore in the nine-month period of the current fiscal year, from July 2020 to March 2021. During the same period, its profit before tax was Tk 91.74 crore. Its asset was Tk 1,381 crore and liabilities Tk 849 crore as of March 31, 2021, according to the financial reports.
NCC Bank signs deal with iclique solutions
NCC Bank has signed an agreement with iclique solutions Ltd to upgrade its payment system to comply with international “PA-DSS 3.2” guideline. NCC bank’s credit and debit card holders will enjoy faster, convenient and secured card services through implementation of this up-graded software. Moreover, it will help to integrate with different channels relating to digital banking platform, said a statement. Mohammad Mamdudur Rashid, Managing Director & CEO of NCC Bank, and Maruf Alam, Chairman of iclique Group exchanged the agreement on behalf of their respective organisations.