Inward remittance through mobile financial services has declined 2.7% to BDT 75.0 million in April from March, according to the latest Bangladesh Bank data. In March the amount of the country’s inward remittance through MFS was BDT 77.0 million. The data shows that the country received a total of USD 10.3 billion as remittance during the first 10 months of the current fiscal year, which also marked a decline 16.1% year-on-year. Bangladesh Bank Executive Director Subhankar Saha told the Dhaka Tribune that Bangladesh Bank’s recent move against “digital hundi” might also have contributed to fall in remittance through MFS. Besides, the central bank lowered the ceiling of mobile banking transaction in January this year along with other several restrictions intended to bring about discipline into the sector and check the use of “digital hundi.” A maximum of BDT 15,000 can be deposited to a mobile wallet each day and BDT 10,000 taken out — down from the previous daily ceiling of BDT 25,000 for both the purposes. Besides, the central bank directed the mobile financial service providers not to open more than one account with a single national identity card. However, a senior executive of Bangladesh Bank declined to agree with the logic that lowering of transaction limit was responsible for fall in remittance inflow through MFS.
Imports rise by 17.4%in April on Ramadan commodities
Import payments in April increased by 17.4% year-on-year due to a rise in payment of bills for food products imported to meet the demand for the items in the upcoming Ramadan, the fasting month for the Muslims. According to the latest Bangladesh Bank data, the total import bill payments stood at USD 3.5 billion in April this year, while the figure was USD 3.0 billion in the same month of 2016. The businesspeople are now also importing industrial raw materials as political uncertainty in the country eased in recent months. The imports of sugar, dates, edible oil, red lentils, onions and ginger rose significantly in April as the demand for the commodities usually rises in Ramadan, a BB official said. The import payments for pulses, however, decreased in April, but its import volume increased, the BB data showed. The import of sugar and edible oil increased to USD 47.3 million and USD 129.4 million respectively in April, 2017 from USD 7.7 million and USD 107.2 million in April, 2016, the BB data showed. The import payments for dates and red lentils in April, 2017 increased to USD 1.1 million and USD 24.8 million respectively from USD 0.3 million and USD 15.0 million in the same month of 2016. The import payments for ginger in April, 2017 rose to USD 3.8 million from USD 2.6 million in the same month of 2016. The import payments for onions slightly decreased to USD 11.9 million in April, 2017 from USD 11.9 million during the same month of 2016 while the import volume of the food products increased to 95.0 million tonnes from 8.43 tonnes.
The Islamic Corporation for the Development of the Private Sector (“ICD”), the private sector arm of Islamic Development Bank (IDB) Group recently signed a Memorandum of Understanding (MoU) with City Bank, Bangladesh in order to strengthen collaboration for fostering private sector development in the country. The signing ceremony was held at the 42nd Annual Meeting of the IDB Group at Hilton Hotel, Jeddah, Saudi Arabia. The CEO of ICD, Mr Khaled Al Aboodi and Mr Sheikh Mohammed Maroof, Deputy Managing Director and Mr Mohammad Mahbubur Rahman, Chief Financial Officer of City Bank signed the MOU on behalf of their respective institutions.
Bangladesh Association of Software & Information Services (BASIS) and Eastern Bank Ltd. (EBL) jointly organised a launching of Co-branded USD Mastercard Credit Card for BASIS member companies Monday, said a statement. BASIS Member companies are allowed to remit abroad up to USD 30,000 to meet their bonafide business expense in a calendar year. It will accelerate the organization’s foreign spending. This card will simplify the existing complex process for foreign purchase relating to IT/ITES procurement.
Md Enayet Ullah has recently been re-elected as chairman of the executive committee of Al-Arafah Islami Bank Ltd. Salim Rahman has also been re-elected as vice chairman of the executive committee, the bank said in a statement. Md Enayet Ullah is one of the founder directors of the bank. Salim Rahman is also the managing director of KDS Group, the press release said.
Foreign Direct Investment from South Korea remains unchanged
Net inflow of Foreign Direct Investment (FDI) was almost unchanged in the past calendar year (2016), according to the latest statistics of the central bank. It showed that FDI from South Korea stood at $151.33 million in the last year which was $150.23 million in 2015. Thus the inflow of FDI actually increased by less than one per cent during the period under review. In the last year, maximum amount of FDI from South Korea came to textile and wearing which was $100.83 million.
The central bank of the Philippines received around $10.50 million in fine more from the scam-hit Rizal Commercial Banking Corporation for its involvement in the $81-million money heist of Bangladesh Bank. Settling the penalty, RCBC paid the full amount of fine amounting to $21 million (one billion peso) to the Bangko Sentral ng Pilipinas, the central bank of Philippines, in two phases, three months ahead of the payment deadline, reports Rappler.com. Based on its information sheet submitted to the Philippine Stock Exchange, RCBC paid the balance of P500 million this month ahead of the August deadline. The BSP’s Monetary Board slapped the one billion peso in fine against RCBC on August 5, 2016 for non-compliance with banking laws and regulations in connection with the $81-million Bangladesh Bank money laundering scandal. RCBC paid the first tranche amounting to $10.50 million (500 million peso) on August 12, 2016. Based on the terms set by the BSP, the deadline for the second and final tranche was scheduled for August 2017.
VAT-exempted goods, services set to total 1500 from 1200
Essential goods and services under VAT exemption list are likely to be increased to 1,500 in the 2017-18 national budget from existing 1,200. Mild steel rod, edible oil, sugar, purchase of land and apartments might be exempted from payment of Value Added Tax (VAT) from July 01, 2017. Declaration on VAT exemption may come in the budget to be placed in parliament on June 01 next. VAT-exempted goods, services set to total 1500 from 1200 However, the tax authority is set to continue the VAT on English medium schools while all other educational institutions would be exempted from payment of VAT. Mostly essential goods, some 20 types of life-saving drugs, all types of medical services, agriculture sector and training activities are likely to be exempted from payment of VAT. Sources said prices of MS rod might increase substantially after implementation of the new VAT law as the product is currently enjoying tariff value. Earlier, the National Board of Revenue (NBR) said the MS rod is the only product that might be affected due to implementation of the new law.
Government may raise turnover tax ceiling to BDT 10.0 million
The government instead of lowering the VAT rate significantly might incentivize businessmen by raising turnover tax ceiling to over BDT 10.0 million from BDT 8.0 million. Finance Minister A M A Muhith said Wednesday while briefing newsmen after a meeting with visiting JICA President Shinichi Kitaoka at his secretariat office. Mr Muhith also said he will meet Prime Minister (PM) Sheikh Hasina on Thursday (today) for finalizing the new VAT (value added tax) rate. But the minister again turned down the plea of more than one VAT rates. The new VAT rate is set to be 15%, as the government is going to enforce the VAT and SD Act 2012 from July. However, in the face of strong protest by business community the government is considering lowering the rate to some extent.
Commerce minister Tofail Ahmed on Wednesday said that the government would raise the tax at source for the export sector in the upcoming budget for the next fiscal year. He, however, did not specify how much the rate would be increased. ‘Countries like India give many benefits to their export sector. Although we say we give such benefits to our exporters, but we cannot actually give such benefits. For example, the tax at source [for export sector] which is now 0.7% will be raised [in the budget],’ he said while speaking at a roundtable on ‘trade and exchange rate policies for export diversification’ organised by the Policy Research Institute of Bangladesh in the city. He said that like the previous years, exporters would go to the prime minister with demand for reducing the source tax after its increase this year. At the roundtable, experts called for providing equal policy supports to all export sectors to help diversify the country’s export basket. They also suggested an effective exchange rate and policy reform to boost foreign direct investment for export diversification. They said other exporting sectors are not getting the same benefit from the government as enjoyed by the readymade garment sector.
Business leaders said the government should lower the ‘high rate’ of corporate tax on a par with other major economies to attract both foreign and local investment in Bangladesh. “Whereas the corporate tax is following a downward trajectory in every major economy in the world in recent times, it is still hovering around 40-45 per cent in Bangladesh,” former President of the Americ/an Chamber of Commerce Aftab Ul Islam said Wednesday at a meeting in Dhaka. He cited examples of various other countries across the globe slashing their corporate-tax rates to encourage trade and business and investment.
Cabinet body okays Reliance’s 718 megawatt plant at Meghnaghat
India’s Reliance Power Ltd will build a 718-megawatts (MW) imported LNG (liquefied natural gas)-based power plant at Meghnaghat in Narayanganj. The Cabinet Committee on Public Purchase (CCPP) approved awarding the project to the firm on Wednesday. The Indian company will ink a power purchase agreement (PPA) and an implementation agreement to execute the power plant project. The state-run Bangladesh Power Development Board (BPDB) will purchase electricity from the proposed power plant for 22 years at a levelised tariff rate of 7.31 US cents (BDT 5.85) per unit (1 kilowatt-hour), Additional Secretary of Cabinet Division Muksudur Rahman Patwary told newsmen after the CCPP meeting. The total project cost is around BDT 809.5 billion, he said.
Bangladesh has the potential to export footwear, sportswear, denim products, toys, bags and electronic goods along with garment items, a top banker said yesterday. The government can give go-ahead to foreign direct investments in the sectors, said Abrar A Anwar, CEO of Standard Chartered Bangladesh. The government should also find out the reasons why the foreign funds are not coming to the sectors despite having huge potential, Anwar said. He spoke at a programme on export diversification, organised by the Policy Research Institute at its office in Dhaka. As for example, Indonesia and Malaysia have received a lot of FDI in the sectors as many have already relocated their business from China to the two countries because of high cost of production, he said. The cost of production did not decrease in Bangladesh although the local currency appreciated against the US dollar, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry. She marked the inefficiency of the Chittagong port as one of the major causes responsible for the high cost of production. Businessmen have to rely on expensive air shipments due to the poor performance of the country’s premier sea port, Nihad said. She suggested introducing an efficient management for the currency exchange system. Zahid Hussain, lead economist of the World Bank in Dhaka, suggested the local currency should be devalued.
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