Bank-Insurance
Bangladesh Observes National VAT Day Today
National VAT Day in Bangladesh, observed from December 10 to December 15, stands as a significant occasion, symbolizing a pivotal moment in the country’s fiscal calendar.
This dedicated period serves to recognize the importance of Value Added Tax (VAT) and its role in sustaining economic growth and development. The commemoration not only highlights the significance of VAT in revenue generation but also serves as an opportunity to educate the public on the tax system’s broader impact.
Bangladesh’s National VAT Day is an acknowledgment of the critical role VAT plays in bolstering the national economy. VAT, as a consumption-based tax, contributes substantially to the country’s revenue stream, funding essential public services and infrastructure development. The observance underscores the need for a robust VAT system to ensure financial stability and support the government’s socioeconomic initiatives.
Beyond its financial implications, National VAT Day serves as an avenue for public awareness and education regarding the importance of VAT. Initiatives during this period include workshops, seminars, and outreach programs aimed at elucidating the intricacies of VAT to the general populace. By fostering a better understanding of the tax system, the government aims to promote voluntary compliance and discourage tax evasion.
The Day also provides an opportunity to address the challenges associated with VAT compliance. Small and medium-sized enterprises (SMEs) often encounter difficulties in navigating the complexities of VAT regulations. As part of the commemoration, the government may announce measures to simplify compliance procedures, ensuring that businesses of all sizes can adhere to VAT requirements seamlessly.
In an era of digital transformation, National VAT Day serves as a platform to highlight the role of technology in efficient VAT management. The government may showcase technological advancements in VAT administration, emphasizing the adoption of digital platforms for filing returns and conducting transactions. Such initiatives not only streamline processes but also contribute to minimizing tax fraud and ensuring transparency.
During National VAT Day, success stories of businesses that have excelled in VAT compliance may be showcased. Recognizing and lauding enterprises that demonstrate exemplary adherence to VAT regulations not only motivates others but also sets a benchmark for ethical and responsible business practices. These stories serve as inspiration for businesses striving for excellence in financial integrity.
The observation of National VAT Day comes at a time when nations worldwide are grappling with economic challenges. In this context, Bangladesh may use the occasion to reaffirm its commitment to fiscal prudence and responsible economic management. The government can communicate strategies aimed at navigating global economic uncertainties while ensuring the continued effectiveness of VAT as a revenue tool.
As National VAT Day unfolds, there may be discussions and presentations forecasting future trends in VAT management. Anticipated changes in VAT regulations, alignment with international standards, and the incorporation of environmental considerations into the tax framework could be topics of interest. These discussions underscore the government’s commitment to adaptability and responsiveness in the ever-evolving fiscal landscape.
National VAT Day is also an opportune time for inclusive dialogues involving various stakeholders, including business leaders, policymakers, and the public. Engaging in constructive conversations ensures that the perspectives of all stakeholders are considered in the ongoing efforts to refine and enhance the VAT system for the benefit of the broader economy.
In conclusion, the celebration of National VAT Day in Bangladesh transcends mere fiscal recognition. It serves as a holistic endeavor to promote awareness, encourage compliance, and pave the way for an economically resilient future. By commemorating VAT, Bangladesh reinforces its commitment to responsible fiscal management and lays the foundation for sustained economic growth.
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As the nation reflects on the accomplishments of the past and the challenges ahead, the resonance of National VAT Day extends beyond the designated period. It signifies an ongoing commitment to fiscal integrity, public education, and collaborative efforts for a thriving economic landscape. Through continued dedication to these principles, Bangladesh charts a course towards a future where the benefits of a robust VAT system permeate every facet of its dynamic economy.
Bangladesh Bank Governor Ahsan H Mansur has announced that the central bank will increase the policy rate twice within the next month to combat rising inflation. During a press briefing on Monday, Mansur said, “We will follow a contractionary monetary policy until inflation is brought under control. The policy rate will be raised next week and again next month.”
The governor expressed optimism about inflation stabilizing by March or April, although he did not specify the expected inflation rate. “While we can’t predict the exact level of inflation, we will tighten policies to bring it down. Our exchange rate remains stable, and remittances are on the rise, which should help ease inflationary pressures,” Mansur added.
Recent Rate Hike Follows a Series of Increases
On 25 August, the central bank raised the policy rate by 50 basis points, bringing it to 9% as part of its efforts to tackle high inflation. This marked the third increase in the key interest rate this year. Mansur had previously indicated that the policy rate, or repo rate, could potentially rise to 10% in phases.
Plans to Merge Smaller Islamic Banks
The governor also discussed the possibility of consolidating smaller Islamic banks. “Merging smaller banks would be beneficial. While no formal decision has been made, we are considering the option,” he said. Mansur explained that past irregularities had caused some bank owners to lose their ownership, which could make the process of consolidation easier.
He assured that depositors’ funds would be safeguarded, even if the banks are merged. “We will take actions based on the situation, but depositors’ money will be returned,” Mansur promised.
Task Force Established for Banking Sector Reform
Mansur further outlined that a task force has been formed to address issues in the banking sector, focusing on identifying distressed assets and recovering them. Initially, the task force will work with three banks, followed by an additional six. The team consists of 14 Bangladesh Bank officials, divided into three groups, with six members specifically overseeing larger Islamic banks.
Development partners will provide funding for these efforts, with external and international auditing firms assisting in the process. “Our first step will be to assess how much money has been withdrawn, both in name and covertly. If funds have been transferred abroad, we will work on bringing them back under international law,” Mansur explained.
Liquidity Support for Weaker Banks
The governor noted that some depositors were shifting their funds from weaker banks to stronger ones, creating liquidity challenges for the former. To address this, the central bank will provide funds from more liquid banks to those in need, ensuring that Bangladesh Bank covers any shortfalls if weaker banks are unable to repay.
Potential Changes in Bank Loan Targets
Mansur also mentioned the possibility of reducing the budget target for bank loans by Tk50,000 crore. This move could potentially boost private sector investment. “If we can reduce inflation to around 4%-5%, we will have the opportunity to lower interest rates,” he stated.
Bangladesh Bank (BB) has received a loan proposal totaling $2.5 billion from the World Bank (WB) and the Asian Development Bank (ADB) in several packages, aimed at supporting structural reforms, policy implementation, and investment projects.
The proposal was presented today during a meeting between Bangladesh Bank Governor Ahsan H Mansur, senior officials, and delegations from both the WB and ADB at the BB headquarters. The information was confirmed by BB spokesperson and Executive Director Husne Ara Shikha.
“The World Bank has proposed a $1 billion loan, which includes a $750 million policy-based loan requiring the central bank to implement specific policies. Additionally, a $250 million investment loan is currently in process,” said the BB spokesperson.
Similarly, the ADB has proposed a $1.5 billion policy-based loan, which will be disbursed in three phases, including a $200 million investment loan. According to the central bank spokesperson, $500 million of the loan could be received by 2025.
Additionally, a visiting US delegation, led by Brent Nieman, Assistant Secretary of the US Treasury Department, met with the central bank governor today. During the meeting, the delegation was briefed on the country’s macroeconomic conditions, though no specific loan amount was discussed by the US treasury team.
Parvez Tamal, Chairman of NRBC Bank, once known as a close ally of former Prime Minister Sheikh Hasina, has reportedly shifted his stance following the resignation of the Awami government on August 5. Tamal, who had been accused of exploiting political power for financial misdeeds during the Awami regime, is now aligning himself with student activists in a bid to protect his position.
Previously, Tamal had threatened NRBC Bank employees with termination if they supported or joined the quota reform movement. He also warned of administrative harassment for any Facebook posts or comments related to the movement. However, after the fall of the Awami government, Tamal has been providing financial support to the very student protesters he once opposed, in an attempt to distance himself from his controversial past.
An investigation by Orthosongbad revealed that during the anti-quota movement, Tamal worked on behalf of Sheikh Hasina, even monitoring NRBC Bank staff to ensure they did not participate in the protests. On July 17, under his directive, a warning was sent to all branch managers of the bank, cautioning them about the movement. Documents related to this have surfaced during the investigation.
A directive from NRBC Bank instructed all its officers and employees to refrain from joining any assembly related to the quota reform movement or sharing any comments, posts, or information about it on social media. The email from the bank’s HR department, titled ‘C,’ warned that any violation of this order would result in administrative action in accordance with HR policies. The directive also emphasized ensuring maximum security in and around the bank and required employees to be punctual in reporting to work.
Sources suggest that NRBC Bank Chairman Parvez Tamal, in an attempt to secure his position, has been trying to win over the coordinators of the anti-discrimination student movement. This speculation gained traction after a recent event where Tamal handed over a cheque for 5 million BDT from the bank’s Corporate Social Responsibility (CSR) fund to Hasanat Abdullah, one of the coordinators of the student protests. The donation, aimed at providing treatment and rehabilitation for injured protesters, has sparked widespread criticism on social media. Many are questioning Tamal’s sudden shift, given his previous ties to former Prime Minister Sheikh Hasina and his outspoken opposition to the student movement.
At the donation event, Parvez Tamal remarked that NRBC Bank would support the dreams of those building a “new Bangladesh.” In addition to providing medical assistance to the injured, he pledged future employment opportunities and scholarships for injured students. NRBC Bank also committed to offering jobs to able-bodied members of families affected by the protests. These promises mark a stark contrast to Tamal’s previous stance, where he had vocally supported Sheikh Hasina and opposed the student protests.
Attempts to reach Hasanat Abdullah, one of the coordinators of the anti-discrimination student movement, for a comment were unsuccessful. Despite multiple calls from Orthosongbad office to his mobile phone, there was no response. Similarly, efforts to contact another coordinator, Sarjis Alam, also failed to yield any comments.
However, former law student of Dhaka University and social media figure Syed Abdullah shared his thoughts on Facebook, stating that NRBC Bank Chairman Parvez Tamal is on a mission to secure his position by ingratiating himself with the students, thereby improving his image. Abdullah urged immediate investigations by the Anti-Corruption Commission (ACC) and journalists into the activities of Tamal and his associates.
Orthosongbad made several attempts to contact NRBC Bank Chairman Parvez Tamal for comments, but no response was received.
Sources claim that Parvez Tamal, in his efforts to support the Hasina government, has distributed various donations through the bank, both publicly and covertly. Among these are scholarships in the name of Bangabandhu, a special issue of “Planet” magazine focused on Sheikh Mujibur Rahman’s life and legacy, donations to the Bangabandhu Memorial Trust, contributions to the Bangabandhu Youth Fair, and charity books and iftar events around Bangabandhu’s birthday. Additionally, the bank had provided significant funds for Sheikh Hasina’s Ashrayan Project.
Parvez Tamal, who claims to be a Russian oligarch and served as the president of the Russia Bangabandhu Parishad, has been implicated in various financial irregularities, including loan fraud, commission schemes, recruitment corruption, stock manipulation, money laundering, and the embezzlement of funds. During the tenure of former Prime Minister Sheikh Hasina, Tamal reportedly leveraged his connections with senior leaders of the Awami League to engage in these activities.
The Anti-Corruption Commission (ACC) had previously launched an investigation into Parvez Tamal, chairman of NRBC Bank, following allegations of irregular salary increases for select officials. The investigation stemmed from a complaint by a sponsor shareholder of the bank. Tamal reportedly bypassed the banking regulations, awarding significant salary increments to 27 officials while ignoring over 3,800 employees. Additionally, Tamal and his personal secretary, Asif Iqbal, allegedly pocketed excessive fees from board meetings, violating the country’s banking laws. Furthermore, the investigation revealed that Tamal had set up an unauthorized entity, NRBC Management, without approval from Bangladesh Bank. However, the investigation was abruptly halted, allegedly due to Tamal’s political influence.
In a separate case filed on July 11, 2023, the ACC accused 14 individuals, including 11 NRBC Bank officials, of money laundering and providing unlawful loans. The lawsuit alleges that the accused embezzled approximately 78 crore BDT (including interest) by issuing loans without proper collateral. Additionally, 5.97 crore BDT worth of export proceeds were reportedly laundered without being repatriated to Bangladesh. Tamal was implicated in this fraudulent activity but reportedly used his political connections to suppress the investigation.
Further details of this ongoing investigation will be disclosed in subsequent reports by Orthosongbad.
