Govt to withdraw condition of inscription of bond facility

http://www.thefinancialexpress-bd.com/more.php?news_id=85688

Govt to withdraw condition of inscription of bond facility
Doulot Akter Mala

The government is set to withdraw the condition of 100 per cent bank guarantee equivalent to customs duty or mandatory inscription of bond facility on import packets of plastic raw materials to help the backward linkage industry.

The National Board of Revenue (NBR) has taken the move to ease hassle and reduce additional cost on import of plastic raw materials, a backward linkage industry for readymade garments export.

“It is a long-drawn demand of the plastic raw materials importers who have been bearing the additional cost due to imposition of the measure,” said a senior customs official.

The NBR in principle agreed to withdraw the condition for the benefit of plastic raw materials importers who are enjoying bond facility, he said.

The caretaker government has imposed the condition of providing 100 per cent bank guarantee on import of plastic raw materials under the bond facility if the exporters failed to inscribe the statement ‘Imported under bond, not for sale’ in indelible ink.

“It is not possible for exporters to inscribe the statement as the machine is not available in the exporting countries. So, plastic raw materials importers have provided bank guarantee,” he said.

It escalates cost of production of the backward linkage industry that is affecting RMG export, he added.

“We have to help the exporters to stay competitive in the international market rather than imposing tough conditions on them,” he said.

Talking to the FE, Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) president Ferdous Wahid said: “The imposed condition is benefiting neither the government nor the exporters, only banks are getting advantage of the measure.”

Plastic raw materials importers have been paying millions of taka as bank interest because of this condition that escalates cost of production, he added.

“We are also facing liquidity crisis as a big chunk of money is blocked for such bank guarantees,” he said.

The government should withdraw the irrational measure immediately to make the country’s RMG competitive in the international market, he said.

The government has imposed the condition to thwart abuse of bond facility and market distortion.

“Customs can apply other ways to check abuse of bond facility rather than imposing irrational conditions on exporters,” the BPGMEA president said.

The government has imposed the measure in 2007 which saw several changes in the last two years.

In the budget for fiscal 2007-08, the government made it mandatory to mark the bags containing plastic raw materials as ‘Imported under bond, not for sale’ in red, using the punching method.

But the importers had been facing a problem in import as marking the bags with seals containing the statement by using the punching method is not possible in case of petro-chemical products.

Later, the government changed the rules incorporating the provision of indelible ink instead of punching method. It has also given an option of providing 100 per cent bank guarantee in case of failure in inscription of the statement.

Tax cut for industrial raw materials

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Tax cut for industrial raw materials
Sayeda Akter

The National Board of Revenue (NBR) has reduced taxes on some industrial raw materials in a new tariff structure to help local manufacturing industries and real estate to grow faster.

The VAT Department of the NBR issued a statutory regulatory order (SRO) in this regard yesterday.

In the new tax structure, tariff on production of corrugated iron (CI) sheet from hot rolled (HR) coil has been reduced from Tk 25,500 to Tk 18,500.

Cold rolled (CR) coil, galvanised plain sheet and CI sheet are the sub-products of HR coil, a basic raw material for making tin, window, door, steel cupboard, ceiling fan and tube light box.

Earlier manufacturers had to pay tariff of Tk 10,000 for producing CR coil from HR coil, and Tk 15,500 for making CI sheet from CR coil, totalling Tk 25,500.

The NBR has reduced tariff in every stage of production of CR coil or CI sheet from HR coil.

The tax administration has fixed different tariffs to create a level-playing field for those companies who have to pay more tax for not having the facilities to produce CI sheet directly from HR coil.

“We have reduced tariff, as local manufacturers have been demanding it for long. We hope this reduction will help importers and manufacturers cut their production cost,” said a high official of the VAT (value added tax) Department.

“Now the government will be able to collect more revenue than before,” he said.

He said the manufacturers would be able make high quality products, including CI sheet (tin), window, door, steel closet or cupboard, ceiling fan and tube light box that have a huge demand in the local market.

Kazi Salahuddin Ahmed, deputy general manager of Galco Steel (BD) Ltd, said they were facing uneven competition with imported finished products.

“Earlier the production of CR coil and CI sheet from HR coil was under the same tariff and VAT registration, which led to uneven practices over the cost of production,” he said, adding: “It often compelled us to pay excess VAT.”

“Now we will be able to compete with the imported finished products and make things at lower costs that will increase production.”

Mohammad Nasir Ullah, vice president of Bangladesh Iron and Steel Importers’ Association, said the government decision would help the importers of HR coil, ultimately benefitting the steel product manufacturing and the real estate sectors.

Abdur Razzaque, president of Bangladesh Engineering Industry Owners’ Association, said the prices of raw materials will witness a decline, helping the sector grow faster.

sayeda@thedailystar.net

Bangladesh Development Bank eyes January launch

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Bangladesh Development Bank eyes January launch
Md Hasan

The much-awaited formation of state-owned Bangladesh Development Bank Ltd (BDBL) has reached the final stages with its registration completed with the Office of the Registrar of Joint Stock Companies and Firms.

The central bank also approved a plan for BDBL to run as a scheduled bank.

The registration was completed on November 16.

A merger between Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangstha (BSRS) shaped up into BDBL.

Officials say BDBL will be able to launch operations in January 2010, with industrial financing, commercial banking and merchant banking at the heart of its services.

“This is a good step taken by the government,” said Md Mizanur Rahman, managing director of BSRS. “We expect BDBL to compete with other commercial banks.”

The incorporation and business of commence have been permitted by the government, he said. It will sign a vendor agreement with the government soon.

BSB and BSRS, with almost similar functions, were established in 1972 to provide loans and facilities to industrial institutions, help set up new industries and expand investment in Bangladesh.

But the two companies failed to meet expectations. In 1992, the government moved to privatise BSRS, which remained unaccomplished due to some complexities.

The companies’ board will sit on December 8 to fix a vendor agreement schedule with the government, the BDBL organogram, employee pay structure and select office space for the bank’s headquarters.

As per merger plans, the accounts of the two organisations will be consolidated by December 2009.

The paid-up capital of the merged company will amount to Tk 400 crore. The present paid-up capital of BSB is Tk 200 crore, and Tk 70 crore for BSRS. Making adjustments to the reserve funds of the two companies will raise the capital. In the meantime, BSRS raised its funds to Tk 200 crore.

As per BDBL’s operational plans, the banks will operate across the country by setting up branches at district levels. At present, BSB has 15 branches while BSRS has two.

BSB and BSRS have financed 174 and 69 projects so far, according to the companies’ websites. As many as 1,000 officials are working for the two organisations.

hasan@thedailystar.net

Monetary policy to focus on raising domestic demand

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Monetary policy to focus on raising domestic demand
Sajjadur Rahman

The central bank in the upcoming monetary policy will focus on driving domestic demand until the global economies recover, said a senior Bangladesh Bank (BB) official.

The BB for the first time is consulting different stakeholders, including chamber bodies, banks and businesses, before formulating the new biannual monetary policy to be announced in January.

“The policy will focus more on raising domestic demand. We didn’t formulate such a detailed policy before,” said Habibullah Bahar, economic adviser to the central bank.

The BB released in July an expansionary monetary policy statement for a six-month period up to December.

The policy took a stance to extend credit to agriculture, small and medium enterprises (SMEs), rural economy, housing, shipbuilding and rural energy.

However the country is facing a sharp decline both in global and domestic demand despite the BB’s expansionary monetary policy. Banks are overflowed with cash and finding no avenues to invest in, mainly due to energy crisis.

According to BB statistics, private sector credit growth went down to below 14 percent in September, the lowest in the last two years. The credit growth was 14.26 percent in August.

The banks lent private sector, including companies, flat buyers, consumers, farmers and traders, Tk 27,200 crore in September this year, while the figure was over Tk 41,800 crore in the same month a year ago.

Even a sharp cut in repo rate from 6.5 percent to 4.5 percent could not stimulate private sector demand. By repo the central bank sells money to the commercial banks.

Inflationary pressure is also mounting in the wake of a hike in commodity and fuel prices in the global markets. International Monetary Fund has also hinted a rise in inflation that may reach a double-digit level at the end of the year.

“The new policy will help generate inward-oriented demand and employment,” the BB economic adviser said.

He said raising domestic demand will be prioritised as the global recovery is lingering.

The policy will give importance to the SMEs and agriculture to boost demand, he added.

sajjad@thedailystar.net

Tk 1,000 crore extra stimulus for export

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Tk 1,000 crore extra stimulus for export
Govt announces the package to help the sector offset global meltdown fallout

Staff Correspondent

The government yesterday announced a series of additional fiscal and policy stimulus packages worth over Tk 1,000 crore for export sectors to offset bad impacts of global recession from the domestic economy.

The facilities the exporters are enjoying at present will continue as usual, Finance Minister AMA Muhith said at a press briefing at his secretariat office.

“This is the second stimulus package of the government. We have announced the package so that the country remains unhurt from any bad impact of the global recession. But, things will change soon as the economies of advanced countries are peaking up,” Muhith said.

Under the new package, the government will pay the licence renewal fees of captive power plants used in industrial units from November 1, 2009 to June 2010 to compensate for the power crisis, he said.

The government will need Tk 7 crore more to pay the renewal fees, the finance minister said, adding that his ministry will pay the amount from the stimulus package of Tk 5,000 crore, an option kept in the national budget for the 2009-10 fiscal year.

In the package, the government has extended the bank loan re-scheduling facility without any down payment up to June 30, 2010 from October 2009 at a 10 percent interest rate instead of the current 13 percent for the RMG and textile sectors, Muhith said.

If any borrower defaults a loan during the proposed timeframe, extension of the re-scheduling facility will be considered under the bankers-clients relationship, he said.

Under the package, exporters will receive 5 percent cash incentives for new export destinations for three years while all export destinations, except the US, EU and Canada, will be considered as new, the minister said.

The exporters will get 5 percent cash incentives in the first year, 4 percent in the second year and 2 percent in the third and final year.

According to the package document, members of Bangladesh Textile Mills Association (BTMA) will receive this facility only for direct export of yarn.

Forward exchange booking is a must for exporting home textile in other currencies rather than dollar. This sub-sector will also receive the bank loan re-scheduling facility, the document says.

The government has also decided to give a special benefit to small and medium enterprises (SMEs). Companies that exported up to $3.5 million in FY2008-09 will be brought under the SME category, it says.

Such SMEs will receive 5 percent cash incentives if they can export more than the actual export of the last fiscal year in FY2009-10, Muhith said.

The government will also give 10 percent electricity bill to SMEs that do not have their own captive generators up to June 30, 2010, but the facility is subject to some conditions including non-availability of bank loan re-scheduling facility, not being an enterprise of the owner of a large industry and the basis of acceptance of real information, the finance minister said.

The government will introduce a uniform bank service charge after discussing with Bangladesh Bank and the Bankers’ Association of Bangladesh.

From now, an individual exporter can receive $10 million from the Export Development Fund through three banks; an exporter gets $1.5 million at present. The bank interest rate in this case will be London inter-bank offer rate (LIBOR) plus 2.5 percent and Bangladesh Bank will take necessary actions in this connection.

The BTMA members that import cotton and other fibres for producing yarn will also get the same benefits against a few conditions, the minister said.

He suggested forming a joint contributory fund for the export sector for improving market and quality of the products.

He said the government is ready to give Tk 300 crore to this fund and the private sector exporters have been asked to contribute at a rate of 0.1 percent on their free-on-board value of exportable products up to June 2010 and at 0.2 percent from July 2010.

The government will bear 50 percent cost of the operation of the National Institute of Textile Training, Research and Design from FY2010-11 although it bore 100 percent cost of the institution for FY 2008-09 and 60 percent for FY2009-10.

The government will also give cash incentives to shipbuilders and crust leather exporters as these sectors have potential. It has also declared bank loan moratorium facility for these sectors for a certain period, Muhith said.

On November 10, former finance minister M Syeduzzaman, chief of the working committee on recession, recommended that the government provide different facilities to exporters to offset the bad impacts of global recession from the domestic economy.

Special economic zones on cards: Barua

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Special economic zones on cards: Barua
Star Business Report

The government will soon develop special economic zones (SEZs) to lure both foreign and domestic investments, said Industries Minister Dilip Barua yesterday.

“Bangladesh is a unique place for investment. Foreign investors can invest in the special economic zones with modern technology and help accelerate economic activity and generate employment,” he said.

“Foreign investors can come and invest in the various thrust sectors, such as ceramics, light engineering and shipbuilding.”

Barua made the call to foreign investors at the inauguration of a new production unit of ‘Maggi’ noodles by Nestle Bangladesh Ltd. The new unit has been set up at Nestles’ factory in Sreepur, Gazipur.

Deputy Head of Mission of Switzerland Gabriele Gerighetti and Nestle Bangladesh Chairman Latifur Rahman and Managing Director Laurent Therond were also present.

Nestle Bangladesh officials said the company invested about Tk 13 crore to set up the new production unit to meet growing local demand for noodles.

Officials said the new unit would raise the noodles production capacity almost threefold — from about 3,500 tonnes to over 10,500 tonnes a year.

“Nestle’s expansion is an important initiative. Such investment will allow us to realise our dream of making Bangladesh an industrially developed nation,” said Barua. “In the new Industrial Policy, we will focus on facilitating foreign and non-resident Bangladeshi investors.”

The minister said the government would take steps to safeguard foreigner’s investments and facilitate easy transfer of their profits and remittance.

“We want foreign investors to be our development partners,” he said.

Barua also said the government will protect worker interests, encourage companies to carry out their social responsibilities and develop the green industry.

Gerighetti said Bangladesh is truly a unique place for investment and tourism.

“The potential of Bangladesh is huge,” he said, adding that Swiss investors are investing here. “Some of them are also waiting to invest.”

Nestle Bangladesh Ltd, a subsidiary of health, nutrition and wellness company Nestle SA, began operations in Bangladesh in 1994.

The company manufactures and markets various brands, including Maggi Noodles, Maggi soup, Nescafe, Nido power milk and various infant cereals.

Therond said the expansion would help Nestle fulfil rising demand for noodles among consumers. “Thanks to the Bangladeshi consumers, our new production unit will certainly be able to meet demand. We will also bring some new products for Bangladeshi consumers.”

Local companies to get forex loans from PCBs

http://www.newagebd.com/2009/nov/23/busi.html#1

Local companies to get forex loans from PCBs
Asif Showkat

The private commercial banks are actively working to bring the credit system at a competitive level offering loans in foreign currencies to local businesses at the interest rate of global market standard, official sources said.

‘We have advised the local business conglomerates not to take costly credit from the international sources,’ said Atiur Rahman, governor of the Bangladesh Bank recently.

Biman Bangladesh Airlines will save nearly seven million dollars taking loan from local private commercial bank instead of foreign sources, he mentioned.

According to a recent bidding, Eastern Bank Limited has won the bid to finance Biman with $117 million beating foreign Citibank NA while Apexadelchi Limited will take a credit of 7 million Euro from the Bank Asia Limited.

Interest rates for the loans will be EURIBOR (European Inter-bank Offered Rate) plus 3.5 per cent, a source at the Board of Investment said.

The scrutiny committee on foreign loans of the BOI last week has approved the Apexadelchi loan to enhance the working capital of the company which exports footwear to Europe and China, the source added.

The EBL sources said that the loan agreement with Biman is likely to be signed in December next.

‘This is for the first time in history that a Bangladeshi bank has taken the initiative to enter into a deal, which was earlier done only by foreign banks,’ Ali Reza Iftekher, managing director and chief executive officer said referring to the agreed loan for Biman.

The central bank’s recent lifting of restrictions on offshore banking or foreign currency loans for local banks has broken the monopoly that foreign banks enjoyed earlier in case of banking outside the country’s export processing zones.

Only foreign firms in the EPZ were entitled to foreign exchange loans before the lifting of the restriction by the central bank.

Now there are nearly a dozen local and foreign banks providing offshore banking services to investors and businessmen in EPZ and all its transactions are in foreign currencies, mainly in US dollar.

Providing all credits to the Bangladesh Bank, the EBL’s Ali Reza Iftekher said, ‘It has helped a lot as the central bank has agreed to use its foreign exchange reserve for national interests.’

Irteza Reza Chowdhury, senior executive vice-president of the Bank Asia Limited told New Age that his bank would arrange the foreign loan signing ceremony with the Apexadelchi today.

BB chief says exporters will get incentive to enter new markets

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BB chief says exporters will get incentive to enter new markets
Star Business Report

Bangladesh Bank Governor Atiur Rahman said yesterday additional incentives would be offered to exporters to enter new markets with diversified products.

“We are ready to assist entrepreneurs. If needed, we will support our exporters from foreign exchange reserves,” said Rahman at a seminar on fallout of the global financial crisis on international trade financing.

Bangladesh Institute of Bank Management (BIBM) organised the programme where a study, conducted by BIBM academics — Dr Toufic Ahmad Choudhury and Dr Shah Md Ahsan Habib — observed that the meltdown has not left any significant impact on trade financing in Bangladesh.

Garment, the main export item, did not suffer significantly rather it gained a market share in large and developed economies compared with Bangladesh’s competitors.

But falling demand due to the global recession had earlier cast a negative impact on some major exporting sectors such as frozen foods, leather and jute.

“Despite challenges, the global recession has opened up a lot of opportunities. We have become number one in apparel exports to the US,” Rahman said.

The recent data shows signs of a fall in garment exports. Presenters at the seminar feared that garment exports might face pressure in the coming months, as there are instances that the volume of orders has declined.

“In Bangladesh, one observable change in export letters of credits (LCs) received by domestic traders is that the number of deferred LCs has increased remarkably over the last few months,” said BIBM Director Toufic Ahmad Choudhury.

Researchers suggested that a sufficient flow of credit should be ensured in the backdrop of falling export orders.

The BB governor said the central bank has increased the size of the Export Development Fund to facilitate exports.

“We will also give additional incentives to exporters for an entry to new markets.”

“At the same time, we will also help troubled exporters to return from losses, based on the suggestions from the task force,” he said.

“But our exporters should not depend on state assistance. They should have in mind that we want to win by competing with others.”

Referring to the issue of incentives, Centre for Policy Dialogue (CPD) Executive Director Mustafizur Rahman suggested offering economy- or region-wise incentives to encourage exports.

“We should look at economy-wise incentive policy.”

The CPD executive director also suggested the central bank enhance foreign exchange loan limits in favour of exporters.

He referred to the problems of loan rescheduling by small and medium exporters and importers and said: “We should also have a window for rescheduling their loans.”

BIBM Director General Dr Bandana Saha, Managing Director and Citi Country Officer Mamun Rashid, Prime Bank Managing Director Ehsanul Haque also spoke.

Stimulus-plus of Tk 2,000cr soon

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Stimulus-plus of Tk 2,000cr soon
Ship building, frozen food, apparel sectors to get the recession package
Rejaul Karim Byron

The government is likely to announce an additional recession package of Tk 2,000 crore within this month to promote different sectors suffering from the global meltdown.

Finance ministry sources say they are considering allocating the money to the new areas like product diversification, ship building, frozen food and apparel sector.

A committee, recently formed by the government and headed by former finance minister M Syeduzzaman, already submitted its report on the issue to the finance ministry.

The finance ministry is now finalising the stimulus package on the basis of the report.

Subsidy under the new recession package might be given to the readymade garment exporters and their backward integration only for new export destinations as per the recommendation of the committee, finance ministry sources said.

The committee recommended giving five percent cash incentive to the readymade garments including knitwear and woven garments for the next five years.

According to the committee, all the export destinations except EU, the US and Canada will be considered as new markets.

The ministry is also considering forming a fund for product diversification and small and medium apparels sector affected by the global recession.

In the last fiscal year, the government had allocated additional 2.5 percent subsidy to jute, leather and frozen shrimp sectors to tackle the fallout from global recession, but no subsidy had been given to the readymade garment sector.

But, exports in the readymade garment sector have decreased by 20 percent in the first three months of the current fiscal year and that is why the government is considering giving incentive to this sector.

The shipbuilding, evolving as a potential export-earning sector in the country, may get 7.5 to 10 percent export subsidy.

Besides, the government is considering to give banking facilities to help export sector overcome the pinch of global economic downturn.

The finance ministry, however, decided to increase the term of loan rescheduling by three months for the export oriented industries including frozen food, leather and leather goods, jute and jute goods, apparel (spinning) and RMG sectors without any down payment.

The term for loan rescheduling without any down payment fixed till September earlier may now be extended to December, sources said.

Finance ministry sources said a total of Tk 5,046 crore was allocated for giving subsidy and incentives in this year’s budget and Tk 3,046 crore was fixed for those sectors, which are already getting the export subsidy.

The ministry has already released Tk 1,311 crore out of Tk 3,046 crore for the sectors, sources added.

More income tax returns this year

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More income tax returns this year
Star Business Report

The National Board of Revenue realised Tk 859.93 crore this fiscal as income tax through tax returns from individuals, registering a 36.28 percent rise over the last fiscal year.

In FY 2008-09, such income tax collection was Tk 623.67 crore.

The disclosure came at a press conference at the tax authority’s office yesterday by NBR Member Aminur Rahman. He said such a growth in individual income tax manifests taxpayers’ increased trust in the service-orientation of tax collectors.

The deadline of submission of tax returns was November 12.

As many as 7,57,964 individuals have submitted their tax returns this fiscal, while the figure was 6,56,193 the previous year, marking a 15.51 percent growth.

At present, there are 22 lakh tax identification number (TIN) holders across the country. But, still around 14 lakh TIN-holders do not pay income tax, the data on the latest tax returns show.

The NBR top official said such non-payment of income tax by TIN-holders is almost a common feature. However, he pointed to the rise in the number of people who submitted income tax returns this year.

Aminur Rahman also spelt out an NBR plan to go for a drive against the TIN-holders who did not submit tax returns. “The defaulters will face legal action,” he sounded a note of warning.

As per rules, such defaulters will have to pay regular fine of Tk 1,000 along with Tk 50 for every day for delaying submission of their returns.

NBR statistics show 11.90 percent up in NBR’s overall tax collection during July-October. The total collection was Tk 16,630 crore in the period. Of the amount, at import level the collection increased 2.02 percent, at local level 18 percent and income tax 24.31 percent.

Farm, SME get priority in BB’s 5-year plan

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Farm, SME get priority in BB’s 5-year plan
Staff Correspondent

Reaching out baking services to commoners across the country to give them maximum benefits of financial activities will be a key component of the Bangladesh Bank’s vision for the next five years.

The motto of ‘financial inclusion’ of the masses through increasing disbursement of farm loans and promotion of small and medium will be the core theme of the central bank’s five-year strategic plan now under preparation.

‘We want to establish a strong, dynamic and credible central bank. Apart from its traditional function, we want to serve the people in the best possible manner for giving them fruits of economic development,’ Murshid Kuli Khan, a deputy governor of Bangladesh Bank, said briefing journalists about the plan.

Food security of the people and generation of more income opportunities through jobs and self-employment would be possible if the goals to be set under the strategic plan can be attained, he told a questioner about the key objectives of the plan.

The five-year strategic plan, envisioned by the present central bank governor, Atiur Rahman, also development economist, is expected to be prepared and made public in the first half of January 2010.

The central bank organised a two-day workshop titled ‘Strategic Planning and Management Strengthening Workshop’ in Dhaka on November 13-14 and received inputs for preparation of the strategic plan.

Explaining the theme of financial inclusion, the deputy governor mentioned that the Bangladesh Bank might promote ‘one upazila, one product’ concept to encourage entrepreneurs of small and medium enterprises to take ventures based on specialisation of knowledge and skill in each locality and region.

‘Guava of southern region or mango of Rajshahi may be considered for supporting the projects. The central bank will play the role of a guardian in encouraging commercial banks to act accordingly,’ said Khan.

BB to roll out strategy for efficient banking

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BB to roll out strategy for efficient banking
Bss, Dhaka

Bangladesh Bank (BB) has prepared a five-year strategic plan to ensure efficient banking.

The plan, first of its kind in the country, focuses on stable monetary policy, automation, skilled development, capacity building and prudent credit policy.

BB Governor Atiur Rahman will disclose further details at a press conference at the central bank headquarters today.

The plan that received final touches at a weekend meeting at Jamuna Resort will be effective from January.

“We have prepared a strategic plan to face future challenges and make the central bank more efficient to support and develop the sector,” said Rahman who presided over the meeting.

“At the meeting, we have noticed that BB should continue its support to the agriculture sector and increase financial assistance to small and medium enterprises by two to three times than now,” the BB chief said.

Rahman said the overall investment would get more attention in the plan and BB will encourage more investment in agriculture and SMEs.

Low interest BB foreign currency loan for local investors

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Low interest BB foreign currency loan for local investors
Staff Reporter

Local exporters have been offered a unique opportunity of saving around 10 per cent interest on borrowing foreign currency, thanks to a healthy foreign exchange reserve that crossed US$ 10 billion-mark on Wednesday.

Three big enterprises have so far availed themselves of the facility Bangladesh Bank has extended, taking the advantage of the rising trend of reserves for sometime now, to help exporters become competitive in the international market, a senior Bangladesh Bank official told The Independent.

He said Pran Group, Apex Group and Biman Bangladesh Airlines have been the pioneers in borrowing foreign currency at an interest as low as 3.5 per cent, as compared with a maximum lending rate of 13 per cent under a central bank cap imposed on the commercial banks.

It would help the Pran Group to save interest amounting to Tk 7-8 crore from what they would have to pay if the money borrowed in terms of local currency at an interest of 13 per cent.

Bangladesh Bank recently relaxed rules for Offshore Banking Units (OBUs) of local commercial banks to get foreign currency from the central bank and to allow local exporters to borrow foreign currency at lower rates.

Earlier, the OBUs could only provide loans to foreign investors like those in the export processing zones (EPZs) from fund also mobilised from the foreign sources.

“The recent upward trend of foreign exchange reserves has made it possible for the central bank to offer local exporters the low cost foreign currency loan,” said another official of Bangladesh Bank.

Bangladesh Bank Governor Dr Atiur Rahman had announced that the central bank would make some arrangement to invest from the comfortable reserve position so that it could contribute to the economic development, as the central bank cannot directly invest into the market.

“We’re investing from the reserves into the market, but indirectly, through the commercial banks,” deputy governor Ziaul Hassan Siddiqui said, adding that this had given the commercial banks some extra confidence to lend foreign currency.

He said the central bank was also considering raising the export retention quota for the exporters and to increase the export development fund (EDF) so the exporters could get some more low-cost funds.

The deputy governor said the apparel sector was getting huge export orders in the recent days, after signs of a turnaround from the global economic recession, which at one stage would occupy the existing production capacity and prompt the entrepreneurs to increase their capacity.

“At some point of time, we’ll have to import capital machinery. There’ll be no fund constraints to finance the imports,” he said.

Tax payment goes online in January

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Tax payment goes online in January
Star Business Report

The National Board of Revenue (NBR) will complete the tasks for introducing an online tax payment system within next month to streamline the existing tax return submission procedure, said the chairman of the board yesterday.

“We have already signed a memorandum of understanding (MoU) with the International Finance Corporation (IFC) to initiate the online tax payment system. In this process, taxpayers will be able to submit tax returns online from January,” said Nasiruddin Ahmed.

“We are trying hard to enhance the board’s transparency and accountability further by initiating ‘digital NBR’. Once the system is introduced, the tax collection strategy of the board will be strengthened,” he added.

He was speaking at a press briefing at the NBR office in Dhaka after signing the MoU.

The NBR and Bangladesh Investment Climate Fund (BICF) signed the MoU yesterday. The BICF is run by the IFC, the UK Department for International Development (DFID) and the European Union.

The BICF will also provide technical assistance to the NBR initiative.

In line with the MoU, there are two other methodological tasks to be done within the period to introduce the online tax payment system.

One of the tasks is to ensure online business registration of all companies and single registration number for income tax, VAT, customs and Registrar of Joint Stock Companies and Firms.

The other is introduction of an effective online system to resolve complexities and weaknesses related to ‘tax at source’.

The NBR chairman said they would set up a national data centre and ensure that paying tax is no more a hassle.

He said the number of taxpayers has exceeded 6.45 lakh until November 8. Out of around 2.4 million taxpayer identification number (TIN) holders, 7,40,906 submitted their returns last year.

The NBR chief said a move is underway to set up ‘dedicated benches’ in the Supreme Court to handle NBR-related cases and promptly collect the revenues in due.

He also said the government plans to introduce Alternative Dispute Resolution to settle cases outside the court.

NBR may get 30pc higher tax from individual taxpayers

http://www.thefinancialexpress-bd.com/more.php?news_id=84154

NBR may get 30pc higher tax from individual taxpayers
Doulot Akter Mala

The National Board of Revenue (NBR) is expected to receive higher tax from the individual taxpayers this year as both the volume of tax collection and number of tax returns submitted has crossed the previous year’s level until Wednesday, the penultimate day.

Time for submission of individual income tax return will expire today (Thursday).

The NBR has received 0.65 million income tax returns until Wednesday. Income tax officials expect another 0.1 million tax returns will be filed on the last day.

Last year, the revenue board had received 0.64 million tax returns worth Tk 7.39 billion.

“The board is yet to compile the final data of tax collection until Wednesday, but we can say it confidently that the final tax collection will be 30 per cent higher than last year following the trend of income tax payment through pay orders,” said a top revenue board official.

Strict monitoring of the income tax offices forced people to reveal actual incomes without concealing, he said.

The board expects to receive 10 per cent higher tax returns from the individual taxpayers in the current fiscal as the government has netted a number of new taxpayers through external and internal surveys, the official said.

“Usually, income taxpayers rush in the tax offices on the last day. We hope the trend will be same this year,” said a tax official.

On the last day, the tax offices will receive tax returns from all who will be in the queue, he said.

A number of taxpayers also file application seeking more time citing specific reason, he said.

Deputy tax commissioner of different tax zones can extend time from three to six month if any taxpayer submits application with valid ground before expiry of deadline.

There is a law to impose penalty of Tk 1000 at a time and Tk 50 per day for those who will fail to submit tax returns within deadline.

The NBR has extended time twice in line with requests from cross section of people.

Actual deadline for tax return submission was September 30, that was extended to November 1 and later to November 12.