[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Govt to promote value-added products for post-LDC era

The government is considering further incentives while emphasising ICT and advanced technology in order to increase the production of value-added products as part of preparations for graduation from least developed country (LDC) status, Chairman of the National Board of Revenue (NBR) Abu Hena Md...

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Govt to promote value-added products for post-LDC era​

NBR chairman says

The government suspends an assistant commissioner of taxes (ACT) for allegedly helping taxpayers evade tax through forgery. Photo: NBR website.

The government is considering further incentives while emphasising ICT and advanced technology in order to increase the production of value-added products as part of preparations for graduation from least developed country (LDC) status, Chairman of the National Board of Revenue (NBR) Abu Hena Md Rahmatul Muneem said yesterday.

"The IT sector and car manufacturing sector benefited last year and more opportunities will be given in the future. The work of the government is to create the environment, but you have to implement it," he said.

Muneem made the comments while addressing as chief guest a pre-budget meeting, organised by the Chittagong Chamber of Commerce and Industry (CCCI) at the Bangabandhu Conference Hall of the World Trade Centre in Chattogram's Agrabad area.
He also said that the industries of the country must become self-sufficient and proficient in order to confront the obstacles that come with transitioning from LDC status to the developing country status.

To this end, he emphasised the need for industries to become capable of not only confronting tax and VAT challenges, but also various other obstacles in order to compete in the global market.

He added that the nation would be unable to overcome these challenges if industries which require assistance through tax and value added tax (VAT) rebates were not adequately supported.

He also urged to move into more advanced sectors, saying: "Now is the time to turn our attention to the shipbuilding sector instead of the shipbreaking industry. Bangladesh cannot be the destination of foreign waste."

The CCCI earlier submitted around 12 proposals for the NBR for consideration in the next national budget.

CCCI President Omar Hazzaz, who chaired the meeting, proposed to raise the tax-free income limit for individual taxpayers from Tk 3.5 lakh to Tk 4 lakh considering the current global situation and persistent inflation.

He also proposed to reduce VAT on different goods from 15 percent to 8 percent since businesses and the general public are suffering due to the dollar crisis and inflation.

Managing Director of BSRM Group Aameir Alihussain mentioned that businesses face long delays in getting refunds after paying advance tax and VAT, underlining that businesses urgently need such refunds since they are currently facing a liquidity crisis.

In his speech, Muneem said they were working to solve these problems.

NBR member Md Masud Sadik said some traders were misusing government benefits.

"The government has given duty exemption of Tk 750 crore on various food products in the past year but the benefits have not reached the people. They (traders) have kept the price high, showing various reasons," he said.

Leaders of different business bodies, including the Bangladesh Garment Manufacturers and Exporters Association, Real Estate and Housing Association of Bangladesh, Bangladesh Frozen Food Exporters Association, Shop Owners Association, Clearing and Forwarding Agents Association, Rubber Garden Owners Association, and others also spoke.​

 

[Saif]

Dollar, energy crises, NPL hold back growth

Businesspeople and economists said on Sunday that extortion, non-performing loans, the gas crisis, and dollar shortages were holding back the country’s private sector growth. They...

www.newagebd.net

Dollar, energy crises, NPL hold back growth​

Staff Correspondent | Published: 00:12, Feb 19,2024

Businesspeople and economists said on Sunday that extortion, non-performing loans, the gas crisis, and dollar shortages were holding back the country’s private sector growth.

They also urged the government for sustainable policy reforms and a long-term roadmap for achieving the country’s target of a trillion-dollar economy.

The Dhaka Chamber of Commerce and Industry organised the seminar on ‘Bi-annual economic state and future outlook of Bangladesh’s economy: private sector perspective’ at its auditorium in the capital.

DCCI former president Shams Mahmud, also Shasha Denims Limited managing director, said that the government had to ensure energy at an affordable price and uninterrupted gas supply to the industries to boost private sector investment in the country.

‘After LDC graduation, we must look into establishing import substitute industries to be self-sufficient,’ he said, proposing a rationalised taxation system and continued special support for cottage, micro, small, and medium enterprises.

He said that the dollar crisis had created an adverse impact on the country’s private sector for doing business.

Policy Research Institute senior economist Ashikur Rahman said that macroeconomic instability was not good for the private sector.

‘NPL always has a negative impact on businesses. So it is time to take a serious decision against NPL,’ he said, adding that the country’s tax-to-GDP ratio, which is hovering around 10 per cent, is not up to the expected level.

He also said that the government should take the initiative to check the decline of the country’s foreign currency reserve and ensure that inflation comes down.

Bangladesh Institute of Development Studies research director Mohammad Yunus said that sometimes extortion at the retail market becomes one of the main reasons behind rising inflation.

He asked why the business had to pay extra money to do business in the market.

DCCI president Ashraf Ahmed requested that the government lower corporate tax, complete the automation of the taxation system, increase the tax net, and reform supplementary duty and value-added tax to promote private sector growth.

‘As NPL has an impact on increasing some intermediary costs for the private sector, I suggest reducing NPL. Reducing the cost of doing business, uninterrupted energy supply at an affordable price, and logistic sector development will help the private sector re-investments,’ he added.

He also urged the government to reduce the cost of doing business, ease doing business, improve regulatory efficiency, install appropriate infrastructure, ensure energy security, improve logistics, and ensure access to finance for the private sector for the long-term growth target of achieving a trillion-dollar smart economy.

He noted that the private sector investment target was 27.4 per cent of GDP in FY2024, while it was 21.8 per cent in FY2023.

‘Required policies considering the LDC graduation will expedite private sector investment,’ the DCCI president added.

Speaking as chief guest, the economic affairs adviser to the prime minister, Mashiur Rahman, said that the country’s economy had experienced fundamental changes during the past decade, and the private sector had also flourished remarkably.

‘Policies should be formed considering the problems and prospects of the private sector,’ he added.

He stressed export diversification and value addition to export products and acknowledged that reforms were needed in the taxation system as there are still some problems and challenges.

‘We should also tap into the huge potential of the blue economy,’ Mashiur added.

Bangladesh Bank chief economist Md Habibur Rahman said that due to global geopolitical instability, the price of essentials had increased, and the central bank had already taken the necessary measures to tackle the situation.

‘Bangladesh Bank will introduce a Clawing Peg system to keep the exchange rate under control. The central bank has underscored a roadmap to bring NPL in the industrial sector down to 8 per cent within the next 2 years,’ he said.

He also said that the Bangladesh Bank would maintain contractionary monetary policy until inflation came down to 6 per cent.​

 

[Saif]

Foreign Loan: Repayment crosses $4b for first time

Foreign loan repayment, which was hovering around $3 billion since fiscal 2012-13, crossed the $4 billion-mark for the first time last fiscal year on the back of high interest payments and short-term loans in the power and energy sector.

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Foreign Loan: Repayment crosses $4b for first time​

Amount expected to soar in coming years

Foreign loan repayment, which was hovering around $3 billion since fiscal 2012-13, crossed the $4 billion-mark for the first time last fiscal year on the back of high interest payments and short-term loans in the power and energy sector.

In fiscal 2022-23, foreign loan repayment stood at $4.78 billion, up 32.8 percent year-on-year, according to the Economic Relations Division.

The repayment increased $1.18 billion from fiscal 2021-22. In previous years, the repayments increased between $100-$400 million.

Going forward, the repayments are expected to increase further because of exchange rate volatility and the possibility of LIBOR/SOFR and EURIBOR rates ticking up, the ERD said in its latest report.

Of the repayment amount last fiscal year, $2.67 billion was thanks to the government's loans and $2.11 billion was for the state-owned enterprises' borrowing.

Both the segment's loans increased by 32 percent, but the state-owned enterprises' increase is substantial as its total outstanding debt is only $8 billion. The government's total outstanding foreign loan is $62.4 billion.

As of June last year, the total public sector outstanding debt is $70.8 billion.

The state-owned enterprises took short-term loans in this fiscal year, whose interest rate is more than long-term loans, said finance ministry officials. As a result, the repayment amount went up.

"Even two years ago, the interest rate was below 1 percent on such loans. Now, it is more than 8 percent," they said.

Of the repayment amount, the interest payment was $1.3 billion, up 99.23 percent year-on-year, the ERD report showed.

The highest loan was repaid against short-term loans taken to import crude oil: $1.12 billion, which is an increase of 40 percent from the previous fiscal year.

The power sector's loan repayment increased by 27 percent to $679 million.

The government has paid $85 million for loans taken to purchase aircraft earlier, up 49 percent year-on-year increase.

However, the ratio of the government's external debt stock is 15.59 percent of the GDP while the threshold is 40 percent, indicating the foreign loan position is in the safe territory, the ERD report said.

The ratio of debt service to revenue and grant will cross 100 percent this fiscal year, said Zahid Hussain, former lead economist of the World Bank's Dhaka office, citing a recent report of the International Monetary Fund.

"It does not mean that there is no concern."

There are two main concerns now in the current context of historically low revenue collection and ongoing dollar crisis.

"The loan repayment pressure is still heavy and we can't see the pathway to get rid of the situation," he said, while calling for increasing the revenue collection and the foreign currency reserves.

Besides, the government should try to get low-cost foreign loans in the future, Hussain added.

The ERD report -- titled "Flow of External Resources" -- said few loans have recently been mobilised at variable interest rates.

"The interest rate risk is high when the variable interest rate-dominated debt portfolio exists," it added.

Though the report acknowledged the interest-related risks, it said all the other indicators are below the level of threshold.

"According to the present classification by the World Bank, Bangladesh is categorised as a 'less indebted' country."

Though the Bangladesh Bank has taken several initiatives, the foreign currency reserve has been declining in the last one and a half years.

As of February 14, foreign currency reserves stood at $19.9 billion.​

 

[Saif]

PM for doing business with India using taka, rupee

Prime Minister Sheikh Hasina today stressed the need for expanding business between Bangladesh and India using their own currencies

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PM for doing business with India using taka, rupee​

Photo: BSS

Prime Minister Sheikh Hasina today stressed the need for expanding business between Bangladesh and India using their own currencies.

"We can do our business through exchanges of Bangladeshi Taka and Indian Rupee. It has already started, but we have to expand it further so that we can increase our businesses," she said while Indian External Affairs Minister S Jaishankar paid a courtesy call on her.​

​

The meeting was held on the sidelines of the Munich Security Conference (MSC) 2024 at Hotel Bayerischer Hof this morning.
Foreign Minister Hasan Mahmud briefed journalists about the outcome of the meeting upon its completion.

Hasan said the prime minister and Jaishankar attached importance to doing business between the two friendly countries through their own currencies to reduce dependency on other currencies like the US dollar.

He said Bangladesh and India have excellent bilateral relations and it has elevated to another height under the leadership of the prime ministers of the two countries.

"The relations between the countries are getting stronger day by day," he said, adding that the two leaders discussed the issues during the meeting.

Quoting Jaishankar, Hasan said, "Our relations will further be closer in the days ahead."

Bangladesh Ambassador to Germany Md Mosharraf Hossain Bhuiyan and PM's Deputy Press Secretary Md Noorelahi Mina were present during the briefing.

Hasina arrived in Munich on February 15 on a three-day official visit to join the Munich Security Conference 2024.

Upon completion of the tour, she will leave tomorrow night and is scheduled to reach Dhaka on February 19.​

 

[Saif]

Titu seeks Japan’s cooperation to make ‘One Village, One Product’ successful

State Minister for Commerce Ahasanul Islam Titu has sought Japan’s cooperation to make the “One Village, One Product” programme a success. “The prime minister has declared ‘Handicrafts’ as the product of the year. The government is working to increase employment

thefinancialexpress.com.bd

Titu seeks Japan’s cooperation to make ‘One Village, One Product’ successful
UNB
Published :
Feb 19, 2024 21:00
Updated :
Feb 19, 2024 21:14

State Minister for Commerce Ahasanul Islam Titu has sought Japan’s cooperation to make the “One Village, One Product” programme a success.

“The prime minister has declared ‘Handicrafts’ as the product of the year. The government is working to increase employment and export goods through the ‘One Village, One Product’ programme. We look forward to Japan’s cooperation and experience to make this programme a success,” he said, according to a press release.

The state minister said this when Japanese Ambassador to Bangladesh Iwama Kiminori paid a courtesy call on him at the former’s office on Monday.

At the time, the Japanese ambassador appreciated the programme, assured cooperation, and said Japan wants to strengthen relations with Bangladesh.

“Japan is keen to work as a partner in Bangladesh’s development journey. We hope that Bangladesh will participate in the ‘World Expo 2025’ to be held in Japan next year,” he said.

Titu mentioned the friendly relations between Bangladesh and Japan and said, “We hope to extend all cooperation to expand trade and commerce between the two countries.”​

 

[Lulldapull]

I meet Bangladeshi here in Japan every now n then and they pretty shy and keep to themselves. They talk to the Nepali community here a lot more than they talk to us the handful of Turkish/ Irani/ Pakistani here.

 

[Saif]

I meet Bangladeshi here in Japan every now n then and they pretty shy and keep to themselves. They talk to the Nepali community here a lot more than they talk to us the handful of Turkish/ Irani/ Pakistani here.

In that case, they are Awami supporters. When I was in America, I used to feel comfortable with mixing Muslims from all over the world(including Indian Muslims).

 

[Lulldapull]

W

In that case, they are Awami supporters. When I was in America, I used to feel comfortable with mixing Muslims from all over the world(including Indian Muslims).

Whats Awami?

 

[Saif]

W

Whats Awami?

Awami means Awami League.

 

[Saif]

Dhaka trade fair logs Tk 392 crore in export orders

The month-long Dhaka International Trade Fair ends today

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Dhaka trade fair logs Tk 392 crore in export orders​

The month-long Dhaka International Trade Fair ends today

The 28th edition of the Dhaka International Trade Fair (DITF) has fetched export orders worth Tk 392 crore, up 17 percent from the previous year, according to the commerce ministry.

Additionally, it was found that customers spent around Tk 400 crore at the month-long event, indicating that sales have risen by roughly 15 percent year-on-year.

Organised by the Export Promotion Bureau, the DITF came to a close at the Bangladesh-China Friendship Exhibition Centre in the Purbachal area of Dhaka today.

Of the 304 stalls and pavilions set up at this year's fair, around nine were operated by foreign companies from five countries, namely India, Singapore, Hong Kong, Indonesia and Turkey.

Speaking as chief guest, State Minister for Commerce Ahsanul Islam Titu said the DITF will be diversified from next year to increase the country's exports.

"Seminars and symposiums will be organised next year to attract more foreign buyers," he added.

Titu also said they will ensure all necessary arrangements for foreign and local business representatives to increase their participation in the event.

"If we do everything right, the country's target of reaching $100 billion in export earnings by 2030 can be achieved faster," he added.

A total of 41 stalls were honoured with crests in different categories for their exemplary performance at this year's DITF.

Tapan Kanti Ghosh, secretary of the commerce ministry, chaired the closing ceremony.

Among others, Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industry, and AHM Ahsan, vice-chairman of the Export Promotion Bureau, also spoke.​

 

[Saif]

Forex reserves go above $20 billion

Bangladesh's foreign currency reserves have gone past the $20-billion mark again, central bank data showed.

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Forex reserves go above $20 billion​

Bangladesh's foreign currency reserves have gone past the $20-billion mark again, central bank data showed.

The reserves stood at $20.19 billion on February 20. It was $19.94 billion a week ago and $20.03 billion on January 24.

The slight increase in the reserves came a week after the Bangladesh Bank introduced currency swaps with banks for the first time in order to meet the net reserve condition set by the International Monetary Fund (IMF) with its $4.7 billion loan programme.

Usually, the central bank has to buy the greenback if it needs to raise the reserve to meet the condition. Now, it may get foreign currencies from banks for a certain period in exchange for only interest.

Recently, the reserves have also received a boost riding on loans from the development partners as well as a pick-up in exports and remittances and a fall in imports.

Merchandise exports rebounded strongly in January as manufacturers shipped goods worth $5.72 billion, the highest in a single month.

Similarly, the remittance flow rose to a seven-month high in the first month of the year. Imports fell 22.41 percent in November, the latest for which data from the central bank was available.

In December, the IMF and the Asian Development Bank provided $689 million and $400 million, respectively.

Amid higher import bills against moderate remittance and export receipts, the gross international reserves slipped to $24.3 billion in 2022-23 from $36 billion in 2019-20.

It stood at $46.4 billion in 2020-21, the highest on record.​

 

[Saif]

MFS transactions grow fourfold in five years

People made Tk 4,100 crore MFS transactions in 2023's December

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MFS transactions grow fourfold in five years​

People made Tk 4,100 crore MFS transactions in 2023's December

Bangladesh is registering a consistent growth in transactions through mobile financial services (MFS) and it grew four times to over Tk 4,100 crore in the last five years to December 2023.

In December 2018, the daily average transaction through the digital platform was Tk 1,070 crore, according to data from Bangladesh Bank (BB).

The popularity of MFS increased as it made available a number of activities in the palm of hand such as money transfer, talktime purchase, payment of utility bills and for online and offline purchases.

At the end of December 2023, overall transactions through MFS surged 30 percent year-on-year to Tk 124,548 crore, according to the BB data.

In that month, cash-in and cash-out grew by 29 percent and 31 percent year-on-year respectively.

Even, transaction through MFS rolled out in 2011 in Bangladesh posted a two-year high growth in the 12th month of last year.

"Due to convenience in digital transactions, the MFS industry has been experiencing a substantial growth in cashless spending by the customers for the last couple of years," said Shamsuddin Haider Dalim, head of corporate communications and public relations at bKash Ltd, the largest MFS provider in Bangladesh.

In general, he said, people spend more during festival seasons, special days, holidays and at the beginning and end of a year.

"The month of December falls within the holiday season when many people travel and spend."

Moreover, social gatherings, family reunions, weddings also take place during this time, he said.

The higher spending by people in such occasions fuel the overall growth in MFS transactions too, he said.
"Expatriates send more remittance at the yearend through MFS channel as well."

The central bank data showed that the government's distribution of money through MFS for social protection schemes skyrocketed in December 2023 from a year ago.

At the same time, people also showed increasing interest to shop and pay through MFS.

For example, merchant payment through the mobile financial services shot up 53 percent year-on-year to Tk 5,518 crore at the end of December 2023 when remittance sent through MFS grew 51 percent year-on-year to Tk 586 crore.

"MFS is not just a money transfer tool anymore, rather it has evolved into a platform of different financial services designed to meet people's day-to-day needs," said Muhammad Zahidul Islam, vice-president and head of media and communications at Nagad Ltd, one of the major MFS operators.

"From mobile recharge to utility bill payments to shopping, all now can be done on our MFS wallets."

"That is why people are now turning to more and more MFS services which are convenient, secure, and affordable," he added.

In December last year, MFS operators recorded a 49 percent year-on-year spike in payment of utility bills, which hit Tk 2,903 crore.

Money transfer from person-to-person soared 25 percent year-on-year to Tk 34,277 crore in that month.

Salary disbursement through MFS platforms increased too. But its growth was lowest among all the major services provided by the operators.

Islam said the way mobile money operators are now coming up with new and diversified financial services for customers, MFS transactions will continue to surge in the days to come.

In 2023's December, daily average transactions through Nagad stood at Tk 1,400 crore, mainly riding on government disbursements, various payments and mobile recharge, he added.

At present, the country has over 22 crore MFS accounts and more than half of them belong to people living in rural areas, according to BB data.

"The growth so far is positive. There is enough reason to be hopeful," said Md Nehal Ahmed, professor of Bangladesh Institute of Bank Management, adding that digital transaction will increase in near future.

"Convenience here is the main factor and the Covid-19 pandemic was a turning point for the spike in MFS-based transactions."

However, challenges are still there, he said.

The lack of awareness on the benefits of digital transaction, the fear of being defrauded and the popularity of paper documents of transactions are some of the many reasons which have slowed the growth of MFS transaction, he added.

The transaction cost is another reason, Ahmed said.

Many people want to avoid making big MFS transactions to keep service charges lower, he added.

At present, the users have pay up to Tk 20 to withdraw every Tk 1,000 from the MFS agents.

Ahmed said digital banks, for which the central bank has started giving permission, might throw a challenge to the MFS providers by offering lower transaction fees than the current rates.​

 

[Saif]

PM underscores maritime resources for country's progress

Prime Minister Sheikh Hasina on Thursday stressed extracting marine resources from Bangladesh’s vast maritime zones, and maintaining friendly relations with the neighbouring countries to tap the potential of the "Blue Economy" for the country's socio-economic advancement, reports BSS. "We ha

thefinancialexpress.com.bd

PM underscores maritime resources for country's progress​

​

Published :​

Feb 22, 2024 13:46

Updated :​

Feb 22, 2024 13:53

Photo: BSS

Prime Minister Sheikh Hasina on Thursday stressed extracting marine resources from Bangladesh’s vast maritime zones, and maintaining friendly relations with the neighbouring countries to tap the potential of the "Blue Economy" for the country's socio-economic advancement, reports BSS.


"We have to explore the marine resources from the maritime areas we achieved. I believe the announcement of the blue economy will be implemented. We have to use the vast marine resources for the socio-economic development of Bangladesh" she said.

The premier made the remarks at a function marking the golden jubilee of enacting the law titled "The Territorial Waters and Maritime Zones Act, 1974" at Bangabandhu International Conference Centre (BICC) here this morning.

She said: "We will have to be cautious in extracting our marine resources and in continuing business and trade using seaways maintaining our foreign policy "Friendship to all, malice to none."

She also urged the overseas companies to come up with investment to explore resources in Bangladesh's maritime zones.

Sheikh Hasina said conflicting situations are being seen in many areas across the globe. But there is no conflict in this region, she said.

"This zone is very safe as there is no mess with each other here," she added.

The prime minister said the Bay of Bengal is a part of the Indian Ocean and it is very important marine way as international business and trade have been continuing using this way since ancient times.

"All our countries have been doing trade and commerce equally using the seaway. International commerce is also going on. No conflict has ever been seen. I want such peaceful situation always," she said.

She expressed her hope that this zone will remain peaceful for trade and commerce in the days to come.

The prime minister reiterated that Bangladesh always believe in peace, adding, "We don't want war rather we want peace. Peace shows the path of development and progress and helps the nation march forward".

She said, "We will never engage in war. But, we have to have capability to protect our sovereignty."

She later visited different stalls of the maritime stakeholders at the BICC.

State Minister for Shipping Khalid Mahmud Chowdhury spoke at the function.

Secretary (Maritime Affairs Unit) at the Ministry of Foreign Affairs Rear Admiral (Retd) Md Khurshed Alam presented the keynote speech and Chief of Naval Staff Admiral M Nazmul Hassan gave the address of welcome.

An audio-visual documentary to mark the celebration of golden jubilee of adopting "The Territorial Waters and Maritime Zones Act, 1974" was screened at the function.

Sheikh Hasina said Awami League government always followed the foreign policy formulated by Father of the Nation Bangabandhu Sheikh Mujibur Rahman and at the same time, took initiative to establish rights on the marine resources in line with "The Territorial Waters and Maritime Zones Act, 1974."

The prime minister said Bangladesh had established its rights on the vast marine areas and its resources by winning legal battles with Myanmar and India in the international court in 2012 and 2014.

She said Bangabandhu had first taken the initiative to establish rights on marine areas by enacting the maritime law in 1974 which the United Nations adopted in 1982.

The Father of the Nation with his wisdom had opened the path of prosperity using the marine resources with enacting the laws for the country's overall socio-economic development, she said.

She also said the subsequent governments after 1975 plot did not take any initiative to establish the rights on the vast sea areas.

The premier said the AL government had again taken initiative upon assuming office in 1996 after a long 21 years, adding that the initiative did not attain success as the Awami League did not come to power in 2001.

No initiative was taken by the BNP government after assuming power in 2001, she said.

But, after coming to power for second time, the AL government had taken measures to this end and established rights on vast sea areas and its resources, she added.

The marine resources can contribute immensely to the advancement of national economy, the head of the government said.

"We have been attaching priority to ensuring maximum use of the marine resources alongside its protection," she said.

To this end, she also said her government has been working to make Bangladesh Navy and coast guard stronger to foster their ability to secure the vast marine areas.

"We are working to use the marine resources appropriately so we can utilize it for the socio-economic development of the people," she said.

She continued they have already established an institute to conduct research to ensure maximum use of the marine resources.

Sheikh Hasina said her government has established Bangabandhu Sheikh Mujibur Rahman Marine University and marine institute to develop skilled manpower which is required to boost the blue economy.

She said, "The Territorial Waters and Maritime Zones Act, 1974" has been acting as an important guidelines and hoped that it will also work in the same way in the future.

She, as well, reiterated her commitment to transform Bangladesh into a developed, prosperous and smart country free from poverty and hunger by 2041, saying. "We must implement the dream of the Father of the Nation."​

 

[Saif]

Revenue collection accelerates in January

The pace of revenue collections quickened in January, driven by increased receipts from income tax as the deadline for filing personal income and wealth statements for the current fiscal year ended last month.

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Revenue collection accelerates in January​

The pace of revenue collections quickened in January, driven by increased receipts from income tax as the deadline for filing personal income and wealth statements for the current fiscal year ended last month.

Provisional data from the National Board of Revenue (NBR) showed that all of its three wings -- customs, value-added tax (VAT), and income tax -- collected 15 percent higher tax year-on-year in the July-January period of the fiscal year 2023-24, amounting to Tk 197,839 crore.

Yet, the tax administration fell short of its target for the period by Tk 17,750 crore even after the government trimmed the collection target by 4.5 percent.

The NBR has a revised tax collection goal of Tk 410,000 crore for FY24. It managed to log 48 percent of the target in the seven months to January.

"It appears that the revised tax collection target for the whole year will not be achieved although there is a growing pressure on the side of public expenditure due to higher inflation and decelerating value of the taka against the US dollar and other foreign currencies," said Towfiqul Islam Khan, a senior research fellow of the Centre for Policy Dialogue.

A constrained revenue collection means the fiscal space will be limited for the government.

"The government should make judicious choices in having the right priorities in terms of public expenditure," he added.

"The budget will need to be revised in a realistic manner. Most importantly, the value for money needs to be ensured without exception. Indeed, good governance in both mobilising revenue and public money spending should be of utmost priority."

Income and travel tax registered an 18 percent growth to Tk 63,074 crore in July-January compared to the previous year, NBR data showed.

VAT collection – the biggest source of revenue for the government – climbed 16 percent to Tk 77,224 crore.

An official of the NBR said increased consumer prices, or inflation, boosted the receipts of VAT, the indirect tax paid by consumers, in the first seven months of the fiscal year.

However, the growth of revenue by customs from import and export was the lowest as foreign currency shortages continued to keep purchases from external markets down.

Overall imports slumped nearly 20 percent year-on-year to $30.5 billion in July-December of 2023-24, according to Bangladesh Bank data.

The customs wing recorded nearly 10 percent growth to Tk 57,540 crore in July-January, according to the NBR data.

Muhammad Shahadat Hossain Siddiquee, professor of economics at the University of Dhaka, said the revenue collection was lagging behind the target.

He said the deficit per month stood at more than Tk 2,500 crore on average, and it would total around Tk 30,000 crore at the end of FY24.

"Falling behind the target highlights the ineffectiveness of the authorities engaged in revenue collection."

However, Prof Siddiquee said, it is optimistic in a sense.

"Based on the current economic condition, especially in terms of imports and economic growth, revenue collection is satisfactory."

Bangladesh has been going through one of its worst economic crises in recent decades because of the lingering impacts of the coronavirus pandemic and the Russia-Ukraine war.

"To fulfill the target, the overall revenue collection needs to be increased by 30 percent, which seems unfeasible," Siddiquee said.

Siddiquee said the government had set an ambitious target as part of the International Monetary Fund's (IMF) loan condition, which is to increase the tax-to-GDP ratio by 0.5 percent in FY24.

He said the IMF had revised down the annual target for the government by Tk 20,000 crore.

"Still, it seems a major challenge to achieve the revised target, which will, in turn, definitely put an extra burden on the public."​

 

[Saif]

Forex reserves go above $20 billion

Bangladesh's foreign currency reserves have gone past the $20-billion mark again, central bank data showed.

www.thedailystar.net

Forex reserves go above $20 billion​

Bangladesh's foreign currency reserves have gone past the $20-billion mark again, central bank data showed.

The reserves stood at $20.19 billion on February 20. It was $19.94 billion a week ago and $20.03 billion on January 24.

The slight increase in the reserves came a week after the Bangladesh Bank introduced currency swaps with banks for the first time in order to meet the net reserve condition set by the International Monetary Fund (IMF) with its $4.7 billion loan programme.

Usually, the central bank has to buy the greenback if it needs to raise the reserve to meet the condition. Now, it may get foreign currencies from banks for a certain period in exchange for only interest.

Recently, the reserves have also received a boost riding on loans from the development partners as well as a pick-up in exports and remittances and a fall in imports.

Merchandise exports rebounded strongly in January as manufacturers shipped goods worth $5.72 billion, the highest in a single month.

Similarly, the remittance flow rose to a seven-month high in the first month of the year. Imports fell 22.41 percent in November, the latest for which data from the central bank was available.

In December, the IMF and the Asian Development Bank provided $689 million and $400 million, respectively.

Amid higher import bills against moderate remittance and export receipts, the gross international reserves slipped to $24.3 billion in 2022-23 from $36 billion in 2019-20.

It stood at $46.4 billion in 2020-21, the highest on record.​