April remittance flow drops 7.0%
Remittance inflow fell nearly 7.0% in April from the previous month’s mark, mainly because of sluggish development activities in the Middle-East, officials said. Besides, devaluation of the currencies of the United Kingdom, Singapore and Malaysia against the US dollar also worked as a damper in this regard. The inward remittances from Bangladeshi nationals working abroad were estimated at USD 1.20 billion in this April, USD 88.19 million down from the level of the previous month. In March, the monthly volume was USD 1.28 billion, and USD 1.13 billion in February, according to the central bank statistics. The remittance inflow also dropped by USD 100.09 million to USD 1.20 billion in April 2016 from USD 1.30 billion a year ago, the BB data showed. Bangladesh received USD 12.25 billion during the July-April period of this fiscal year, FY 16, registering more than 2.0% negative growth over the corresponding period of the previous fiscal. Currently, 33 exchange houses are operating across the globe, setting up 1,134 drawing arrangements abroad, to expedite the remittance inflow, according to the central banker.
BSEC okays financial statements of two closed-end MFs
The trustees of two closed-end mutual funds (MFs) whose liquidation activities have already been completed will have to distribute unit holders’ money within next seven working days, officials said. The Bangladesh Securities and Exchange Commission (BSEC) said this on Wednesday after approving the audited financial statements of these two closed-end MFs. The closed-end MFs are AIMS First Guaranteed Mutual Fund and Grameen One : First Scheme of Grameen Mutual Fund. Both the funds were managed by AIMS of Bangladesh. According to net asset valuation report, the net asset value of each unit of AIMS First Guaranteed Mutual Fund has stood at BDT. 25.93. On the other hand, the net asset value of the units of the Grameen One : First Scheme of Grameen Mutual Fund has stood at BDT. 24.66 each. The securities regulator has imposed a penalty on Vision Capital Management for breaching securities rules by embezzling its clients’ money worth BDT. 0.57 million. The BSEC has imposed penalty worth BDT. 1.0 million on S R Capital and BDT. 0.2 million on its director for breaching securities rules.
Stock regulator to upgrade merger rules
Bangladesh Securities and Exchange Commission plans to upgrade its acquisition and takeover rules as the existing systems have become outdated. The stock market regulator formed a four-member panel on merger and takeover and instructed it to come up with draft rules or recommendations in the next 30 workdays. The decisions were made at a meeting of the regulator with its chief M Khairul Hossain in the chair, according to a statement. Merger seekers find it difficult to comply with the existing system. The Substantial Share Inheritance, Acquisition and Takeover Rules of 2002 are not appropriate for the current market and need to be modernised, a BSEC official said. Fixing share transfer price is one area of concern in the existing rules. The transfer rate should be the historical high price of a company’s stock on a bourse or the last six months’ weighted average price, whichever is higher, according to the existing rules.
Demand for below 10% VAT rate
Representatives from different professional chartered and management accountants have urged the government to fix a uniform value-added tax rate at below 10per cent. They have also requested the revenue authorities to implement the new Value Added Tax and Supplementary Duty Act 2012 in phases, so the consumers do not face the pinch of the VAT hike. The professionals came up with the demand to the revenue authorities at a pre-budget meeting held at NBR headquarters in the city yesterday. NBR Member (income tax policy) Parvez Iqbal presided over the meeting. Representatives from Institute of Cost and Management Accountants of Bangladesh (ICMAB) said: “The VAT rate should not be more than 10% not only to reduce the tax burden but also to increase VAT compliance and encourage taxpayers to pay the VAT voluntarily. The government is all set to implement the new VAT law from July 1 which will have no provisions for package VAT or truncated value-based VAT system. With the introduction of the new law, all levels of business have to pay a unique and a flat VAT rate at 15per cent. The association also proposed the NBR to increase the corporate tax on income of non-listed foreign banks to 45% and reduce the tax rate for non-listed local banks at 40% from the existing 42.5% to keep the tax gap by 5% between the two sectors.
BPC averts account freeze on VAT payment pledge
On a pledge to pay BDT. 8.49 billion out of the default tax, four companies under Bangladesh Petroleum Corporation (BPC) averted a move by government’s revenue authority to freeze their accounts. Officials said the BPC authorities agreed Wednesday to pay BDT. 8.49 billion out of the arrears in Value Added Tax (VAT) due from last July to April 2016 to the revenue board. Senior secretary of the Internal Resources Division (IRD) and chairman of the National Board of Revenue (NBR) Md Nojibur Rahman, Energy secretary Nazim Uddin Chowdhury and BPC chairman Mahmud Reza Khan, among others, attended the meeting. The meeting was convened to discuss payment of VAT arrears by the four oil companies — Padma Oil, Meghna Petroleum, Jamuna Oil and Standard Asiatic Oil Ltd. The arrears were found having accumulated in the period between July 2013 and April 2016. Responding to a query on payment of the due from BPC’s own fund or through book adjustment in the ministry of finance, the NBR chairman said the dues will be paid from BPC’s own fund.
No spectrum auction this fiscal too BTRC tells NBR
The much-awaited auction of the remaining 2G and 3G spectrum will not be held in the current fiscal year as the government is yet to finalize the auction guidelines. The Bangladesh Telecommunication Regulatory Commission in a meeting with the National Board of Revenue on Tuesday confirmed that the auction earnings could not be included in the current fiscal year’s non-tax revenue collection, BTRC officials said. This is for the second fiscal year that the BTRC has failed to hold the auction due to lack of participation by the operators and delay on the part of the government in finalizing the auction guidelines. The NBR in December last year requested the BTRC to speed up the auction process to expedite the government’s revenue from the telecom sector. The finance ministry had also been pushing for holding the auction in the current fiscal year, but the possibility of a merger of two telecom companies made the scene complicated, said BTRC officials. The BTRC projected a revenue collection of only BDT 42.0 billion in FY2015-16 from the operators, as it took a conservative approach, the officials said.
Olympic to invest BDT. 133 million in new cookies line
Olympic Industries, a food and allied sector company, has decided to set-up a new line for producing new premium varieties of cookies, said a disclosure posted on the Dhaka Stock Exchange (DSE) website Wednesday The Board has decided to set-up the line at an estimated cost of BDT. 133 million to be jointly funded with cash and bank financing, to produce new premium varieties of cookies, it added. The new line will have an estimated annual production capacity of 7,200 tonnes, said the company in the disclosure. Olympic Industries was listed on the Dhaka bourse in 1989. The food and allied sector company belongs to the “A” category. The company has reported un-audited third quarter (Q3) earnings per share (EPS) of BDT. 2.5 for January-March, 2016 as against BDT. 1.4 for January-March, 2015.The company’s paid-up capital is BDT. 1,904.18 million and authorized capital is BDT. 2,000 million, while total number of securities is 190,417,987, according to statistics from the DSE.
Pipe leakage cuts gas, power production
A pipeline leakage has substantially cut down country’s production of both gas and power for several days, at a time when many industries and households are starved of the twin energy. However, officials ruled out any link of the Bibiyana pipeline leak to a reported ULFA threat to blow it up. The leak in the pipeline that carries natural gas from US Chevron-operated Bibiyana gas field into the national gas grid has been seeping out gas for several days, resulting in lower electricity generation and industrial production, sources said. Output from Bibiyana, country’s largest gas-producing field, dropped around 50% to around 825 million cubic feet per day (mmcfd), as of Monday, from its regular supply of around 1,250 mmcfd, a senior Petrobangla official told the FE. Gas-guzzling power plants, industries and fertilizer factories across the country pared down their production due to dearth of the natural gas. The country’s overall natural gas output also dropped by around 15.54% to around 2,350 mmcfd Monday due to the supply shortfall, Petrobangla statistics revealed.
Power Division likely to get lesser funds in next ADP
The Power Division is likely to get lesser development funds than what it had sought for the next financial year (FY) 2016-2017, officials said Wednesday. Power Division officials said they had sought nearly BDT. 160 billion from the Planning Commission (PC) in the development budget for the FY 2016-17, but the latter is likely to give less because of fund shortage. “Initially, the PC indicated an allocation of BDT. 156.71 billion for the next FY2017. The allocation was almost close to our demand. But we are now hearing that the PC will cut the preliminary allocation by a good margin due to fund shortage in the next year budget,” a senior Power Division official said. The PC, more than a month ago, started to formulate the ADP for the next FY2016-17, to be implemented between July 2016 and June 2017. The Power Division usually receives the second largest allocation in the government’s development budget. Another PC official said, as per the demand of the Power Division, they primarily allocated total BDT. 156.71 billion in the proposed ADP for the next FY setting aside BDT. 93.75 billion from the government’s own exchequer and BDT. 62.96 billion from the project aid (PA) fund. Of the funds, BDT. 62.44 billion has been proposed to be allocated from the government’s own fund and the rest BDT. 62.96 billion from the external development aid money, the official added.
R-Power gets Bangladesh government nod for LNG-based power plant
The Government of Bangladesh has granted in-principle approval for the first phase of Reliance Power’s project in Bangladesh, reports Times of India. The first phase of 750 MW power plant will be set up at Meghnaghat (Narayanganj district), around 40 km South-East of Dhaka, along with the FSRU terminal at Maheshkhali Island in Cox’s Bazar district of Bangladesh. Land at Meghnaghat will be provided by Bangladesh Power Development Board (BPDB). FSRU-based LNG terminal will supply Re-gasified LNG for the power project and additional RLNG to PetroBangla. This will be the largest foreign direct investment in Bangladesh with a potential investment of over USD 1.3 billion. The company has completed a capital expenditure of INR 500.0 billion; has a strong net worth of INR 210.0 billion and continues to remain financially conservative with a debt to equity ratio of 1.5:1, one of the lowest in the power sector.
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