Bangladesh Bank cuts interest rate on farm loan
Bangladesh Bank has reduced interest rate on agricultural and rural credit to 10.0% after considering downward trend in lending interest and deposit rates. The new interest rate will be effective from July, 2016, according to a circular issued on Tuesday by the central bank. The present rate is 11.0% which was set as maximum limit of interest rate on farm and rural loans in December, 2014. According to the data as of April this year, the rate is higher than the average lending rate of 10.7%. In December, 2014 Bangladesh Bank had set interest rate on farm loans at 11.0% from 13.0% when the average lending rate was nearly 13.0%. Bangladesh Bank set a target of disbursing BDT164.0 billion farm loans this fiscal year.
DSE deposits BDT 347.04 million to government coffer
The Dhaka Stock Exchange (DSE) has deposited above BDT 347.04 million to the government exchequer as tax at source against the cash dividend received by the shareholders, officials said. The premier bourse recommended 10.0% cash dividend in early March, 2016 for its shareholders for the first time after the exchange was turned into a profitable entity through the demutualization process. After getting approval to the cash dividend at the annual general meeting (AGM), the premier bourse recently disbursed 10.0% cash dividend among the shareholders. As per the declaration, the DSE shareholders received BDT 7,215,106 each as dividend. After deducting the tax at source equivalent to BDT 1,443,021.2, each shareholder got the cheque of BDT 5,772,084.8 as dividend. Presently, there are 250 shareholders in the premier bourse. The DSE’s earning per share (EPS) was BDT 0.75 for the year ended on June 30, 2015. The company’s EPS was BDT 0.7 for the year ended on June 30, 2014.
Tax hike at source to hurt export
The proposed 1.5% tax at source for export-oriented industry would badly hit the sector especially the promising ones, like plastics industry, furniture and garment accessories manufacturers and the like, exporters say. In the proposed budget for the fiscal year 2016-17, the government has proposed to raise the tax at source on exports, including that of the garment sector, to 1.5% from 0.6%. Currently, the apparel makers and other export-oriented sectors pay 0.6% tax at source. Talking to the Dhaka Tribune, the leaders and manufactures of export-oriented industries argued that the proposed tax at source will not only cast shadow on new investment but also lead the sector to face tough competitions as the prices of product would go up further. In last fiscal year, Bangladesh earned USD 100.5 million. In the first 11 months of the current fiscal year, it earned USD 81.5 million, which is 11.5% less compared to USD 92.0 million in the same period a year ago. On the other hand, the expansion of existing business will be stuck and new investment would be discouraged due to fall in net profits, the exporters claimed. In the last fiscal year, furniture exports earned USD 39.0 million.
ACI inks deal with Yamaha Motors
Advanced Chemical Industries (ACI) Limited has informed that ACI Motors, a subsidiary of ACI having 66.5% stake, signed a business deal with India Yamaha Motors Private Limited. The agreement was signed recently for three years terms-2016, 2017 and 2018 with a total sales target of BDT 6.35 billion, said a statement posted on the Dhaka Stock Exchange (DSE) website Wednesday. “Under this agreement, ACI Motors will sell and distribute Yahama brand motorcycles and parts in its Bangladesh territory with an estimated sales target of BDT 502.0 million, BDT 2,445.0 million and BDT 3,400.0 million during the year of 2016, 2017 and 2018 respectively,” said the statement. ACI, one of the leading conglomerates in Bangladesh with a multinational heritage, was listed on the Dhaka bourse in 1976. The pharma & chemicals sector company belongs to the “A” category.
NBR surpasses revised target by BDT 30.5 billion
The National Board of Revenue (NBR) has surpassed its revised target by BDT 30.5 billion until May of the current fiscal year (FY) with increased effort and intensified monitoring. The board has collected BDT 1.3 trillion tax revenue in the first eleven months of the current FY against its target of BDT 1.3 trillion. Earlier, the government had revised the aggregate tax revenue collection target to BDT 1.5 trillion from its original target of BDT 1.8 trillion. Officials said the tax revenue target is expected to surpass its revised target in the current FY if such trend continues in June.
Experts oppose proposed cut in investment tax
Speakers have strongly opposed the proposed cut in investment tax rebate facility for individual taxpayers saying that the measure would increase income tax liability for them in the next fiscal year (FY). They opposed the proposal while speaking at a seminar organized by the Institute of Chartered Accountants of Bangladesh (ICAB) titled ‘An Analytical Study of Significant Amendments by the Finance Bill 2016 and Amendments Enacted through SROs on Income Tax and VAT Regulations’ in the city Wednesday. The speakers said that the government should apply income tax measures with prospective effect instead of retrospective effect. The ICAB recommended upward revision of investment tax credit scheme considering the tax planning of individual taxpayers. The leading professional accountants’ body recommended the government for reduction of the rate of tax at source on export to 0.80% from the proposed 1.5%, withdrawal of tax on investment income of several funds including gratuity fund, provident fund and workers participatory fund and reduction of minimum tax for companies from the proposed 0.60% to 0.40%.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$47.43||(0.58)||(1.21%)|
|Crude Oil (Brent)*||$48.97||(0.86)||(1.73%)|
|Dow Jones Industrial Average||17,640.17||(34.65)||(0.20%)|
|USD 1||BDT 78.37*|
|GBP 1||BDT 111.25*|
|EUR 1||BDT 88.28*|
|INR 1||BDT 1.17*|
*Currencies and Commodities are taken from Bloomberg.