Economy
BGMEA, BKMEA for lowering tax at source at 0.5p
BGMEA: Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Tuesday (7th March) urged the government to reduce the tax at source on export of RMG items at 0.5 percent from the existing 1 percent and thus keeping it for the next five years.
The leaders of the two major associations also demanded of the government to waive the 10 percent income tax on cash support against exports as well as make the corporate tax at 10 percent for the green RMG factories.
The leaders of BGMEA, BKMEA and Bangladesh Textiles Mills Association (BTMA) raised such demands at a pre-budget meeting with the National Board of Revenue (NBR) held at the NBR Bhaban in the capital’s Agargaon area.
Presided over NBR Chairman Abu Hena Md Rahmatul Muneem, leaders of BGMEA, BKMEA and BTMA attended the meeting.
Explaining the rationality of their demands, BGMEA President Faruque Hassan said that the foreign buyers have reduced the work orders due to the impacts of the COVID-19 pandemic and the Russia-Ukraine war.
He said although the exports have increased in terms of value, the volume of exportable items has reduced. Under the circumstances, Faruque proposed for re-fixing the tax at source at the previous 0.50 percent to face the evolving challenges and thus keeping such facility for the next five years.
However, the BGMEA president demanded of the NBR to increase the number of authorized economic operators (AEO) to ensure speedy shipment and unloading of goods.
The other notable demands from BGMEA include giving VAT exemptions to some 12 RMG related firms to increase the export competitiveness, resolving the HS code-related complexities, reduction of duty on import of washing dry machines and fire extinguishing equipment.
Echoing the demand of BGMEA to reduce tax at source against exports, BKMEA executive president Mohammad Hatem urged the NBR to reconsider the issues related to tax at source.
Hatem also requested the NBR to exempt the RMG factories on mandatory submission of zero VAT returns, fixing the duty and VAT at zero percent on import of chemicals for setting up solar panels and ETPs.
The leaders of BTMA proposed for waiving all types of duty and VAT at import stage on all types of fibres including recycled fibre and man-made fibre.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
