Exports grew a modest 3.92 percent year-on-year to $28.72 billion in July-April, riding on shipments of knitwear, home textiles, leather products and jute. Month-wise, it also rose nearly 3.49 percent to $2.78 billion in April compared to the same month a year ago, according to the Export Promotion Bureau. However, the earnings fell 4.25 percent short of the target set at almost $30 billion for the 10-month period. April’s earnings were also 3.82 percent shy of hitting the monthly $2.89 billion target.
The Asian Development Bank is upscaling its loan portfolio in Bangladesh to nearly double this year, to keep pace with its economy that is going great guns now. “This year, we’re negotiating with the government to provide loans ranging from $1.8-$2 billion, which is almost double the last year’s amount. That is because Bangladesh is a different country from the past,” said Hun Kim, director general of the South Asia Department at the ADB.
A decision in this regard was made at a cabinet meeting presided over by Prime Minister Sheikh Hasina, Cabinet Secretary Shafiul Alam told reporters after the meeting at the Secretariat in Dhaka. There would be a 15-minute prayer break from 1:15pm. The new timing would be effective for all the government, semi-government, autonomous and semi-autonomous institutions, he said. The Ramadan is likely to begin in the last week of this month.
Govt weighs 3 firms’ bid for equity investment abroad
The authorities are weighing three local companies’ applications for permission to making equity investment worth US$37.44 million abroad under their overseas business-expansion plan, officials said.. The companies are Akij Jute Mills Ltd with a proposed investment of $ 20 million for acquisition of two companies in Malaysia while Ha-Meem Group $ 10.44 million for setting up a garment factories in Haiti and Nitol-Niloy Group for establishing Gambia Commerce and Agriculture Bank Ltd in Gambia with a proposed investment of $7.0 million. Earlier, the three leading companies had applied to Bangladesh Bank (BB) for allowing them to invest foreign remittance in these ventures abroad for business expansion. The BB sent a letter to the Ministry of Finance (MoF) on May 02 for considering the proposals.
The securities’ regulator is likely to approve the IPO proposals, which are awaiting the regulatory approval, under the existing public issue rules as it might be difficult for the companies to submit revised proposals. On April 27 last, the Bangladesh Securities and Exchange Commission (BSEC) approved the revised public issue rules bringing some changes both in fixed price and book building method. The latest amendment will come into effect after taking public opinion. A total of 12 IPOs (initial public offering) worth above BDT 9.71 million are presently awaiting the regulatory approval under the existing book building method. On the other hand, another 12 companies have submitted IPO proposals to raise an aggregate amount of fund worth above BDT 2.10 billion under the fixed price method. Mohammad Saifur Rahman, a BSEC executive director, said the securities’ regulator is discussing the issue regarding approval of pending IPO proposals. As per the existing rules, a company having a minimum paid-up capital of BDT 150 million at par can offer at least 10% of its paid-up capital (including intended offer) or BDT 150 million at par value, whichever is higher. As per the proposed provision of the revised fixed price method, a company willing to go public must have a minimum paid-up capital of BDT 150 million and the size of IPO will be BDT 300 million. As per the proposed provision of book building method, a company must have a minimum paid-up capital of BDT 300 million and the size of IPO will be BDT 500 million, including premium.
The government is likely to provide increased protection to domestic industries from imported commodities and give more comfort to small and medium enterprises while implementing the new VAT law from July this year. Revenue officials said they are working to increase the number of products in the list of supplementary duty (SD) to discourage imports and better safeguard the interests of the domestic industries. They are also working to increase the VAT-exempted threshold and turnover limit for small and medium enterprises. The National Board of Revenue plans to expand the list of VAT-exempted items to ease the burden on consumers who have to pay the consumption tax to buy essential goods and services. “The list will be published soon,” said NBR Chairman Md Nojibur Rahman in a Facebook post on May 7. The new law waives VAT on basic foods and unprocessed agricultural products, education, healthcare and life saving drugs, transport and residence. The move comes amid concerns among businesses and many consumers that implementation of the VAT and Supplementary Duty Act 2012 will increase the cost of living.
Cabinet Okays one-stop service bill to promote investment
The Cabinet on Monday approved the draft One Stop Service Bill-2017 to provide time-bound services to local and foreign investors from a single platform of four government entities to encourage investment in the country. The approval came at the weekly Cabinet meeting held at the Bangladesh Secretariat with Prime Minister Sheikh Hasina in the chair. The Prime Minister’s Office placed the draft of the bill before the meeting. Cabinet secretary Mohammad Shafiul Alam said that four government agencies—Bangladesh Investment Development Authority, Bangladesh Economic Zones Authority, Bangladesh Export Processing Zone Authority and Bangladesh Hi-Tech Park Authority — would have to provide mandatorily at least 16 services at one-stop service center to investors. The services include issuance of trade license, different types of clearance certificates and work permit, giving utility connections, land registration and providing visa-related services, he said. ‘The government took the initiative to enact the law to improve the climate of doing business for encouraging and attracting more local and foreign direct investment in the country,’ Shafiul said at a press briefing after the meeting. Bangladesh ranked 176th, out of 188 countries, in the World Bank’s latest report on the ease of doing business.
The government has decided to develop two industrial corridors along the Dhaka-Benapole and Dhaka-Mongla highways to encourage planned industrialization and save agricultural land in the country. The government has already instructed the deputy commissioners (DC) of the related districts to ensure the use of land stretching two kilometers on both sides of the Dhaka-Mongla highway for planned industrialization and prevent the use of land for different purposes. Bangladesh Investment Development Authority, which will be the responsible agency for developing the corridors, is framing rules in this connection to facilitate industrial corridors in the country. BIDA on Monday arranged an inter-ministerial meeting at its headquarters to finalize the draft of the rules. At the meeting, BIDA executive chairman Kazi M Aminul Islam said that the rules would be finalized at its next board meeting. He said that they had taken the initiative following an instruction from the Prime Minister, Sheikh Hasina, for developing the industrial corridors in the country.
Experts propose cut in number of price slabs: Aimed at stopping tobacco tax evasion
Experts suggested a gradual reduction in number of price slabs for cigarettes, as they found price slab is the key to evading tobacco tax. They also recommended imposing specific tax on cigarette, bidi and smokeless-tobacco items, based on the number of bidi and cigarette sticks and pouch. They made a set of recommendations for tobacco taxation in the budget for the upcoming fiscal year (FY), 2017-18, in a pre-budget press conference on ‘Which Type of Tobacco Tax Demanded’ at National Press Club on Monday. Other recommendations in the pre-budget conference include: gradually market all forms of tobacco products with the same number/volume (stick, grams) and pack/container, and annually adjust excise value of all tobacco products to their ‘real value’ (accounting for inflation and income growth). They also asked for raising tobacco export tax to 25% from existing 10% to strengthen food security, imposing a licensing fee of BDT 5,000 annually for every tobacco-baking furnace, strengthening tobacco tax administration, improving enforcement, and removing duty-free sales of tobacco products in order to reduce tax evasion. They also proposed imposition of a 2.0% health development surcharge on sale of tobacco products (now 1.0%) based on retail price. The revenue collected through the health development surcharge can be spent for various tobacco control programs based on the Prime Minister’s directives.
Changes in new VAT law likely to pacify businesses
The government may finally revise upward the VAT-exemption ceiling for small businesses and widen scope of Supplementary Duty (SD) protection for local industry in the new law. According to sources, the move has been made in the face of concern being aired by cross-sections of people, including businesspeople, economists and consumers, about price effect and sustainability of small businesses after enforcement of the new VAT law. The much-debated fiscal law — which stipulates a flat rate of the value-added tax at 15% — is set to take effect from July 01, 2017. The new piece of legislation would replace the existing VAT law 1991 and have a digitized VAT-collection system. Sources concerned said the draft VAT and SD Act is going through a reappraisal by government high-ups following persistent pleas of the businesses in particular. VAT-exempted turnover limit for small businesses might be raised to BDT 5.0 million while turnover limit for enjoying 3.0% turnover tax may be set at BDT 12.0 million. In the draft VAT and SD act, originally framed in 2012, the VAT-exempted annual turnover for small businesses has been set at BDT 3.0 million. Businesses having annual business turnover up to that limit will not have to pay the tax after implementation of the law. Currently, there is no VAT-exemption ceiling for the traders in the existing VAT law of 1991. All of them across the board have to pay the tax on their business turnover.
The country’s economic growth would see a downward trend in 2017 and 2018 after it reached a decade high of 7.1% in the past year. A United Nations report on economic and social survey of Asia and the Pacific 2017 says that Bangladesh’s growth in the gross domestic product would be at 6.8% in the financial year 2017 and that would be at 6.5% in 2018. The survey conducted by the United Nations Economic and Social Commission for Asia and the Pacific or better known as UN ESCAP found the country’s GDP growth at 7.1% in 2016, similar to the government’s estimate. In October, finance minister AMA Muhith said that the country had obtained GDP growth at 7.1% in the financial year 2016 and the government was confident of obtaining projected 7.3% growth in GDP in the current financial year 2017. The survey report shows that despite a broadly positive economic outlook for 2017, Asia-Pacific economies are vulnerable to rising global uncertainty and trade protectionism.
Prime Minister’s ICT Affairs Adviser for spectrum auction within a month or two
Prime Minister’s ICT Affairs Adviser Sajeeb Wazed Joy yesterday instructed the telecom regulator to arrange the spectrum auction within a month or two with a view to expediting the roll-out of 4G services and improving the mobile operators’ service quality. To allocate more spectrum, the Bangladesh Telecommunication Regulatory Commission will seize different operators’ unused spectrum and put them up for auction, state minister for telecom said. The ICT adviser directed the BTRC to confiscate spectrum of City cell, which has been out of service for more than six months now, and place it in the auction to help the existing mobile operators to improve their service quality, said a senior official who attended the meeting. Joy also directed the BTRC to go for spectrum neutrality, which will help the operators to utilize spectrum in an efficient manner. A charge of USD 5.0 million for spectrum neutrality was also discussed at the meeting but no final decision was taken, the official said. Tarana said every time the mobile operators are quizzed about their poor service quality they blame it on spectrum scarcity.
Government mulls settling SIM replacement VAT issue before 4G auction
The government is considering that it would resolve the VAT related case in connection with SIM replacement ahead of 4G auction through External Resources Division. According to industry insiders, before 3G auction in 2013, the government took such move to resolve the case in the wake of threat that the operators would boycott 3G spectrum auction if the VAT issue was not settled. But later the subject didn’t proceed further. Since Bangladesh Telecommunication Regulatory Commission (BTRC) is planning to float the 4G auction by this year, the government has taken a further initiative to bring four mobile operators into the upcoming auction. Initially, the National Board of Revenue (NBR) is thinking about two options. Primarily, it will request VAT appellate division for quick decision, and secondly, the finance minister can inform law minister as well as attorney general of the case to resolve the case quickly. According to provision 55(3) of VAT law 1991, mobile operators will pay VAT while they sell any SIM.
The Board of Directors of Grameenphone appointed Michael Foley as the company’s Chief Executive Officer (CEO) with effect from 26 May, 2017. Petter-B Furberg, who has been serving as the interim CEO since October 2016, will remain with Grameenphone in the capacity of chairman of the Grameenphone Board of Directors, according to a statement. The Board of Directors also appointed Yasir Azman as the deputy CEO. Azman will remain as Chief Marketing Officer (CMO), while taking on extended responsibilities for the digital and commercial strategy within GP and Telenor’s Emerging Asia Cluster. The announcements were made following the 177th Board Meeting on Sunday. “I am very pleased that Michael is taking on the challenge of leading Grameenphone through the next phases of digitization in Bangladesh,” said Sigve Brekke, President & CEO of Telenor Group.
Qatar has expressed interest to invest in Bangladesh’s liquefied natural gas (LNG) and power generation sectors and deepen the existing cooperation in areas of trade and investment, infrastructure development and exploration of gas. This was stated by Qatari Minister for Energy and Industry Mohamed Bin Saleh Al Sada after talks with Bangladesh’s Foreign Minister AH Mahmood Ali on Sunday when they discussed deepening the cooperation between Bangladesh and Qatar in a wide range of areas, according to a statement. iting the recent success in bilateral talks between RasGas Company, the second-biggest LNG producer in Qatar, and Petrobangla of Bangladesh, the Qatari energy minister said officials of Nebras Power could visit Bangladesh to explore the possibility of investment in the power generation sector. Ali also called on Issa Saad Al-Jafali Al-Nuaimi, minister for administrative development and labour, who informed the Bangladesh minister about the new legislation promulgated by Qatar on manpower recruitment and held out its various positive aspects. Ali appreciated the new reforms in the labour law of Qatar, which he said would ultimately benefit both sides.
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