Draft of new industrial policy gets cabinet nod
The cabinet yesterday approved the draft National Industrial Policy-2016 aimed at increasing industrialization and investment in the country. Foreigners will have to double investments in Bangladesh to get Bangladeshi citizenship, according to the proposed industrial policy. Any foreigner who will invest USD 1.0 million in Bangladesh or transfer USD 2.0 million to any recognized financial institution in the country will get Bangladeshi citizenship, Cabinet Secretary Mohammad Shafiul Alam told reporters after the meeting. The amounts, as per the National Industrial Policy-2010, were USD 0.5 million and USD 1.0 million respectively. In addition, the amount of investment to get temporary residency in Bangladesh while doing business in the country has also been increased to USD 200,000 from USD 75,000 in the past, he said. The new policy has been framed by updating the 2010 policy. The industrial sector has been divided into five categories — high priority, priority, service, reserved and controlled industries. The draft policy has a guideline to set up infrastructure for industrial clusters and industrial parks in the underdeveloped areas in order to establish economic zones, Alam added. As per the policy, Bangladesh Bank will provide incentives and assistance to women entrepreneurs to encourage them to establish micro, small and cottage industrial units.
World Bank advises government to introduce carbon tax
World Bank has advised the government to impose carbon tax. It said the tax would be a “fiscally prudent measure” by protecting the country’s revenue. World Bank’s new country director for Bangladesh Qimiao Fan made the advice in a letter to Finance Minister AMA Muhith on March 17. A carbon tax is usually defined as a tax based on greenhouse gas emissions generated from burning fuels. “A carbon tax will be a fiscally prudent measure by protecting revenues when domestic prices are linked with the currently low international prices, given a stable nominal exchange rate against the US dollar,” Qimiao Fan’s letter read. Referring to a note on petroleum products pricing, he said: “Essentially the note argues that the best approach is to let domestic prices follow international prices while using a tax instrument to account for carbon pricing.” “This can be done through periodic automatic indexation of domestic petroleum prices to reflect changes in international oil prices and the nominal exchange rate.” Fan said a protracted period of low oil prices such as the one the world was experiencing currently was also ideal to introduce carbon tax. In the global market, the price of crude oil has gone down by 70% since the summer of 2014, and is expected to stay in the range of USD 30-40 a barrel in the next few years.
China wants to build expanded production base in Bangladesh
China held out offer to substantially invest in Bangladesh and cooperate with other countries in building the country’s first deep-sea port at any location in the Bay of Bengal. The world’s second-largest economy also wants to help build expanded production base in Bangladesh so it could share trillions of dollars worth of imports China makes and thus cut a huge trade gap. “There remains a huge trade gap between the two countries and it cannot be offset by simply doing trade,” said Chinese Ambassador in Dhaka Ma Mingqiang at a talk show styled “DCAB Talk” at the National Press Club Monday. To reduce the widening trade gap, the Chinese envoy stressed the need for more Chinese investment in Bangladesh and strengthening the country’s manufacturing base to produce goods to cater the Chinese needs. At present, the two-way annual trade accounts for USD 9.0 billion with the balance heavily tilted towards China. The ambassador, however, mentioned the figure as USD 14.6 billion.
FBCCI hopes further lowering of interest rates
The country’s apex trade body FBCCI on Monday hoped that the rate of interest of bank loans will be reduced further after it came down to single digit in some cases. “The interest rate of bank loan has come down to single digit in some cases because of joint efforts of FBCCI and central bank. Since the rate of inflation remained under control during the last couple of days, FBCCI hopes that further lowering of interest rate will be possible through joint efforts,” it said in a statement. In the statement president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Abdul Matlub Ahmad also congratulated the newly appointed governor of Bangladesh Bank Fazle Kabir. He said the apex trade body is also interested to work with the central bank on development of small and medium enterprises sector, taking effective steps for women entrepreneurship development, taking appropriate steps about non-performing loans, and starting works to form housing fund for apparel sector workforces.
Redline, CAAB ink deal on HSIA security
Civil Aviation and Tourism Minister Rashed Khan Menon Monday dispelled the ‘misgiving’ that the overall security management of Hazrat Shahjalal International Airport (HSIA) is being given to a foreign firm. The minister said the contract awardee, Redline Aviation Security Services Ltd, which got airport security management jobs for two years, will do advisory, operational and supervisory works in relation to security of Dhaka airport. “It is not true that the total security management of the airport has been handed over to any foreign company. They are providing advice and services and their performance will be reviewed after every six months under a two-year contract,” said Menon. The civil aviation minister was talking to the newsmen prior to the signing the agreement between Redline Aviation Security Services and Civil Aviation Authority of Bangladesh (CAAB) at CAAB office in the city. Redline chief executive Paul Mason and acting director of HSIA Nurul Islam signed the agreement on behalf of their respective sides when Rashed Khan Menon and outgoing CAAB chairman Air Vice-marshal Sanaul Huq were present.
Keep present VAT pack until 2021
Dhaka Chamber of Commerce and Industry (DCCI) proposed that the government keep the existing package Value Added Tax (VAT) until 2021 by upward revision of the amount. The package VAT system is scheduled to stand scrapped from July 1, 2016 with the implementation of the new VAT and Supplementary Duty Act. In its budget proposal for fiscal year (FY) 2016-17, the chamber maintained that small and medium enterprises (SME) have yet to develop their infrastructure to adapt to the VAT system like developed countries. The DCCI recently placed the proposals to the National Board of Revenue (NBR) for its consideration in the next national budget. In an alternative proposal, the trade body proposed 3.0% VAT to be levied for SME business and 7.0 for large businesses. Currently, small businesses and shop owners in Dhaka and Chittagong city corporation areas pay BDT 14,000 as VAT annually while those in other city corporations BDT 10,000 and district city municipality areas BDT 7,200 and other areas BDT 3,600.
US firm plans to pump USD 200.0 million into Bangladesh: IT, e-commerce, and healthcare sectors to get priority
Fenox Venture Capital, a US-based venture capital firm located in Silicon Valley, has shown interest to invest some USD200 million in potential sectors of Bangladesh through a 10-year plan. According to official website, Fenox VC provides early stage and final round funding, targeting opportunities in areas like IT, healthcare, artificial intelligence, internet of things (IoT), robotics, big data, virtual reality, augmented reality, FinTech and next generation technologies. Anis Uzzaman, general partner and president of Fenox VC, recently visited Bangladesh and talked to the FE about his company’s plan to invest in the country’s potential firms. He said Fenox VC has set its initial target to make investments in the companies of IT, e-commerce and healthcare sectors. Mr Anis Uzzaman, also the CEO of Fenox VC, said his company has already made some investments in three local companies – Prio.com, Shohoz.com and HandyMama.com.
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