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TBS Report

29 July, 2021, 05:25 pm

Last modified: 29 July, 2021, 08:25 pm

Facebook pays Tk2.44 crore VAT to Bangladesh

This is the first time that the VAT department has received a VAT return from a registered non-resident organisation doing business in Bangladesh


Multinational conglomerate Facebook filed Value Added Tax (VAT) returns of around Tk2.44 crore to Bangladesh in June this year.

The PricewaterhouseCoopers (PWC) Bangladesh filed the VAT returns on behalf of Facebook, Promila Sarkar, additional commissioner at Dhaka South Custom, Excise and Vat Commissionerate, told The Business Standard on Thursday.

Facebook Ireland Limited paid Tk2,43,27,599, Facebook Payments International Limited Tk24,070 and Facebook Technologies Ireland Limited paid Tk25,006 in VAT.

All the returns were submitted to the Dhaka South Customs, Excise and VAT Commissionerate on 15 July.

This is the first time that the VAT department has received a VAT return from a registered non-resident organisation doing business in Bangladesh.

Facebook received its VAT registration from the National Board of Revenue (NBR) last month, without having to open physical offices in the country.

Facebook Technologies Ireland Ltd, Facebook Ireland Ltd and Facebook Payments International Ltd also received their Business Identification Number (BIN) certificates.

Last year, Facebook Inc appointed an agent to do business in Bangladesh after facing pressure from the NBR. The company's agent Httpool was paying VAT to the board.

Earlier in May, Google and Amazon obtained their BIN from the NBR – a mandatory requirement for any business operating in Bangladesh.

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System of electronic tax deducted at source to be introduced soon

 DOULOT AKTER MALA | Published:  August 01, 2021 08:42:59 | Updated:  August 01, 2021 14:52:00

The taxpayers would soon be able to adjust or claim a tax credit or seek a refund of their paid advance income tax (AIT) under the electronic tax deducted at source (e-TDS) system.

The tax authority has prepared a system to introduce the e-TDS at all the income tax offices across the country anytime soon.

An e-TDS design and development team has prepared the system through integrating it with all the relevant tax deducting authorities.

TDS contributes around 50 per cent of the total direct tax, around Tk500 billion, collection of the National Board of Revenue (NBR).

Tax officials said the e-TDS is one of the major automation works of income tax to ensure tax justice and check tax evasion by the deducting authority.

There are a total of 0.3 million tax deducting authorities including the government and private organisations, which are bound to deduct tax at source from the taxpayers and deposit it to the public exchequers.

It has been found that many of the deducting authorities refrain from depositing the taxpayers' money properly, taking advantage of the manual system.

The e-TDS would check such irregularities and ensure transparency in the system.

Talking to the FE, Moammad Jahid Hassan, tax commissioner of Zone-6 who is leading the e-TDS implementation team, said the system was fully ready to implement in all the tax zones across the country.

"We are waiting for NBR's approval to introduce the system centrally for the first time in Bangladesh," he added.

He informed that four tax zones are currently under a piloting programme of the e-TDS.

The NBR would sign memorandum of understanding to join hands with the automated chalan (a-chalan) system.

The taxpayers will be able to seek refund of their paid tax, adjust their TDS at the time of submission of tax returns and claim tax credit easily using the e-TDS system.

The system would be integrated with the a-chalan system developed by the ministry of finance.

With the help of a-chalan, the traders can make direct payments from their bank accounts through the real time gross settlement (RTGS) of the Bangladesh Bank.

The finance division of the finance ministry developed the a-chalan system under the improvement of public financial services delivery through implementation of budget and accounting classification and iBAS++ scheme.

It is a component of strengthening public financial management programme to enable service delivery.

An AI-based export-import engine has been prepared to facilitate the businesses to adjust advance paid tax at import or export stages.

The engine would be integrated with the Asycuda system of the customs department.

The NBR has completed vulnerability assessment and penetration testing and obtained certificate from Bangladesh Computer Council (BCC) in this regard.

The NBR would transfer the e-TDS system in Bangladesh Data Center Company Limited (BDCCL) server.

It has already inserted SSL wild card on the system.

Officials said that there was a plan of NBR to introduce the e-TDS across the country from this month (July, 2021), but the process has been delayed due to COVID-induced lockdown and changes of NBR high officials.

In future, the e-TDS system would establish data sharing with e-return system to get tax deduction information of salary payment and other sectors.

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Tax receipts rebound

Growth hits decade high

Star Business Report

Sun Aug 1, 2021 12:00 AM


Tax collection bounced back in Bangladesh in the last fiscal year to grow at the sharpest pace in 10 years, riding on increased imports and an uptick in receipts of value-added tax.

The National Board of Revenue (NBR) collected around Tk 260,000 crore in 2020-21, up more than 20 per cent from Tk 216,540 crore year-on-year, provisional data showed.

This is the highest growth rate since fiscal 2011-12.

The recovery came a year after the NBR posted its first-ever decline since independence in the face of the onslaught of the coronavirus pandemic, which forced the government to impose a two-month-long countrywide shutdown from the end of March to May, crippling the economy.

The curb was lifted in June last year, enabling businesses to run in a new normal until the beginning of the second wave in April this year. This enabled the NBR to raise more taxes.

Receipts from customs tariff shot 27 per cent year-on-year to Tk 77,150 crore in FY21 against Tk 60,550 crore.

Soaring imports and record remittance flows buoyed domestic demand, helping VAT collectors log increased receipts of the indirect tax paid by consumers.

The collection of VAT, the biggest source of revenue for the government, was up 15 per cent to Tk 97,490 crore in FY21.

"Compliance has increased due to monitoring and supervision. There had been efforts from the field level officials too," said Md Anwar Hossain, director-general for research and statistics of the NBR.

He said there had been a good realisation of arrears, while an acceleration of automation of customs and VAT systems also paid off.

"We would have been able to collect a higher amount of revenue if the Covid-19 pandemic was over."

In FY21, income tax collection grew 19 per cent to Tk 85,224 crore, up from Tk 71,432 crore in FY20, according to NBR's provisional data.

Despite the growth in collection, overall receipts stood Tk 41,000 crore below the NBR's revised goal of Tk 301,000 crore for the last fiscal year.

Towfiqul Islam Khan, senior research fellow of the Centre for Policy Dialogue, said the overall revenue collection could not be termed unsatisfactory in view of past years' trends and the ongoing pandemic.

"The shortfall was largely attributed to traditional structural weaknesses and bad programming," he said.

The deficit implies that a higher than planned growth will be required in FY22.  Revenue mobilisation is important as the government may need to provide more support to the vulnerable population given the pandemic.

"Better revenue mobilisation may give the government much-needed confidence to allocate more resources to the distressed population," said Khan.

The NBR has been given a task to raise Tk 330,000 crore in the current fiscal year.

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TBS Report

02 August, 2021, 08:35 pm

Last modified: 02 August, 2021, 08:38 pm

TIB applauds NBR for identifying 80,000  companies not being taxed

The TIB has also called for effective measures to ensure good financial governance


Transparency International Bangladesh (TIB) has commended the National Board of Revenue (NBR) task force for identifying about 80,000 companies not being taxed at present, and for the ongoing process and initiatives of the NBR to integrate them into the existing tax system.

The TIB called for an investigation into how such a large number of companies have been outside the tax system so far, how much tax evasion has happened, and to identify procedural weaknesses of all institutions concerned to prevent such incidents from recurring in the future.

In a statement on Monday, TIB Executive Director Dr Iftekharuzzaman said, "The NBR's Corporate Compliance Task Force's discovery of a large number of companies outside the net proves the extent of financial irregularities, corruption, and lack of good governance in the country. A registered company has been doing business for half a century but has never paid taxes. Again, 1,400 companies are registered at only two addresses or the same person is the director of 46 companies but has only four TIN."

"This information also shows irregularities and financial mismanagement of fairy tale proportions. This huge number of companies did not start practising tax evasion overnight. This situation has arisen due to the connivance of many concerned. In addition to holding them accountable, it is important to identify the procedural and institutional weaknesses and to address them quickly," he added.

Iftekharuzzaman fully agrees with the preliminary report of the task force on non-TIN companies, titled "Tragic picture of a country mired in corruption" and "Lack of good governance in the country's financial sector".

He added that the Registrar of Joint Stock Companies and Firms does not have any system to identify joint venture companies and firms, even though more than a hundred companies are registered at one address. It is equally clear that the irresponsible behaviour of a class of law firms is equally responsible for the registration.

Even though more than 78,000 businesses have TINs, only 26,000 have filed income tax returns and half of them have submitted fake audit reports and evaded a lot in taxes. Therefore, to prevent such incidents in the future, it is necessary to formulate effective strategies now and ensure technical connectivity and coordination between the agencies, he said.

"The sincere efforts of all concerned are essential so that everyone, including businesses, can play the desired role in the country's economy by paying taxes in a hassle-free and easy manner. At the same time, we urge all businesses to be vigilant in the ongoing process of taxation so that they are not harassed," said Iftekharuzzaman.

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Car stockpiles jamming Bangladesh seaports amid shutdown

 JASIM UDDIN HAROON | Published:  August 05, 2021 08:31:32 | Updated:  August 05, 2021 14:28:04


Imported car stockpiles at Bangladesh's two main seaports hit an all-time high principally as roads are off-limits and shops shuttered amid corona curbs.

Sources in the business circles say importers and cargo carriers are losing business proceeds while government missing out on revenue to a great measure.

There have been prolonged lockdowns enforced across the country, staggered spell by spell, and the current 'hard' one has been extended by five more days to August 10th as daily corona casualties remain high above 200 while cases of infection are many hundreds.

Country's external trade also has been hit hard as global markets were under lockdowns or restrictions amid invasion by the coronavirus pandemic for last one and a half years. With the tide stemmed by enforcement of health rules and mass vaccinations, however, most countries are reopening now.

The imported-car stockpiles have a knock-on impact: the lots are causing a space crisis at port yards and frustrating the car carriers as their stay time is increasing in Bangladesh, the sources said.

Motorised vehicles reach Dhaka and other major cities through driving but this lockdown bars entry to the cities.

Besides, car importers say, a slump in the trading persists for long due to the pandemic and lockdowns leading to the stockpile at the ports.

As of Monday, there were 6187 units of motorised vehicles in stockpile at both the ports --- Port of Chittagong and Port of Mongla. Ctg had 2,556 units while Mongla had 3,631.

There are 2,386 units more to be grounded within the next couple of weeks, according to officials working at both the ports. Of this, some 2,100 units will be discharged in Mongla and some 286 in Chattogram.

Of the stock-lot, approximately 20 per cent of the cars are brand new while the rest belong to reconditioned category, mostly come from Japan.

Such huge numbers of stored vehicles is equivalent to more than 60 per cent of the country's annual car sales, people familiar with the trading told the FE.

This is frustrating car carriers as they have to wait three to four times higher than usual for discharging the automobiles.

The car carriers, specially designed for transporting motorised vehicles, usually enjoy "priority berthing" at the ports of Bangladesh. That advantage is blurred by the global public health emergency.

The MV Malaysia Star, which carried 1156 units of cars, had to wait 11 days for unloading the cars in Ctg Port, according to shipping executives.

The MV Lotus Star which arrived in Ctg with 286 units of cars, including 160 units of brand- new ones on July 27, has yet to get permission for discharging. It may start discharging cars on August 05, said people familiar with the matter.

"Actually we have priority berthing but we now have to wait for more than 10 days, which raises our operational cost significantly", said Shahed Sarwar, deputy managing director at Chowdhury Group involved with Japanese shipping line ---K Line.

Under such cases, shipping companies impose surcharges for overstay at the ports, which ultimately causes a raise in prices of the imported products on the local market.

In the meantime, to avoid the increased port rents after free charges the importers prefer to store the imported cars in the open. The rents for the open-sky spaces are much cheaper than for the well-structured sheds.

As the undelivered vehicles occupy spaces of the port yards, the customs authority is now conducting auctions, according to customs officials.

They said Mongla Customs conducted an auction on July 29 for 150 vehicles and Ctg customs would do for 360 units shortly.

Chittagong Port Authority has recently written to BARVIDA, the representing trade body of reconditioned cars, for quick delivery of the motor vehicles.

Contacted, port officials told the FE that the delivery stood almost zero during this round of lockdown.

"In my view, the delivery is almost zero", said Mr. Omar Faruk, secretary at the Chittagong Port Authority (CPA).

He said usually, during lockdown-free days, importers take around 90 cars a day.

Echoing the same, director (traffic) Mostafa Kamal at the Mongla Port Authority (MPA) told the FE that the pace of delivery is very slow this time.

"Importers used to take delivery of around 100 units of imported cars a day but this time at best 2-3 units," he said.

Car importers prefer Mongla port, especially since the past caretaker-government era in 2008. The rent called wharf rent is one-third here from Ctg port.

And the Mongla port, which handles around 60 per cent of total car imports, fetches a large part of its revenue from the car imports. Its capacity for storing is 4,200 units but it has already grounded 3,600.

It is expecting around 2,100 units more within next few weeks, according to the Mongla Port officials.

Car importers say that their business has dropped significantly because of the pandemic and the lockdown. They said there are some other issues, including NBR policy stances, which are also liable for this huge logjam at the ports.

"Our business has dropped around 50 per cent over the past one year," said Mohammed Shahidul Islam, chairman at HNS, a leading car seller in Bangladesh.

He said there is another important issue: there is now huge demand for ambulances and micro-business due to the pandemic. The NBR has issued an order slashing the duty for the segment of the vehicles. But it mentioned the reduction in the duty is applicable for the diesel-run ambulance and the 12-14- seater microbuses.

"Such policy stance also contributes to the stockpile as many importers do not take delivery as long as the issues are settled", Mr. Islam, also general secretary at the BARVIDA, told the FE.

Currently around 250 units of such microbuses also remain stockpiled at the ports, BARVIDA said.

Abdul Hoque, president of BARVIDA, lamented that ports and banks remained open during this lockdown but BRTA registration and their showrooms remained closed.

"To my mind, we need to keep all required services open for limited hours each working day during the lockdown to avoid such stockpile at the ports," Mr Hoque, also managing director at a leading automobile company, Haqs Bay Automobiles Ltd, told the FE.

The slow delivery and slump in the business affect government revenue mobilisation. The NBR loses significant supplementary duty which comes from imported luxury goods.

The revenue board has a target of collecting supplementary duty worth Tk 120 billion. As of May, in 11 months of the fiscal year, it had collected Tk 74.7 billion only.

And BRTA or Bangladesh Road Transport Authority loses a large sum of money as registration fees, while non-life insurers miss out on premium earnings for insurance coverage.

Vehicle registration with BRTA had dropped significantly during the past 11 months of the last fiscal year. Total registration in July-May stood at 160,515 units.

Of the figures, private passenger-car registration dropped to 6,196 units as of May last, down by more than 50 per cent from July-June of 2019-20.

However, Bangladesh imported some 12,502 units of reconditioned cars in 2018-19. This fetched Tk 27.4 billion to government exchequer, according to BARVIDA statistics.

Annual sales are around 10,000 units of cars, BARVIDA said.

There are three Ro Ro car carriers currently operating to and from Ctg and Mongla seaports.

Brand-new cars are usually loaded from Singapore and Colombo. The new cars come from Asia's emerging markets like China, Thailand, Korea and Indonesia.

Local groups Rangs Motors, JMJ motors, Navana Motors and KIA Bangladesh are among the leading brand-new-car importers and traders.


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Google pays 2.3C in VAT

 Tribune Report

 Published at 04:52 pm August 5th, 2021

This makes them the second big tech after Facebook to pay VAT in Bangladesh

Leading big tech and popular search engine Google has paid Tk2.3 crore in value-added tax (VAT) to the National Board of Revenue (NBR).

This makes them the second big tech after Facebook to pay VAT in Bangladesh, after the social networking giant paid Tk2.44 crore on July 29 earlier, both of which are registered with the Dhaka South VAT Commissionerate.

According to the Dhaka South VAT Commissionerate, a VAT of Tk55.78 lakh against the returns of last May has been filed by the foreign institution, and another Tk1.74 crore for June.  

The company deposited the money to the government treasury on Thursday from the Citibank NA branch in Singapore.

PricewaterhouseCoopers (PwC), Google’s local consultant, confirmed saying: “The returns have not reached the government as of yet, it had just made its way into the country as of now. We had to sign forms as per procedure once it made its way here and it will be deposited into the bank accounts on the next working day following the submission of challan.”

The search engine giant was one of the first foreign companies to register with NBR acquiring a business identification number (BIN) in Bangladesh in May to avail VAT-related services, including VAT payment and VAT return submissions.

So far, four non-resident organizations have registered for VAT.  

Other companies besides Google are Facebook, Amazon, and Microsoft, which do not have local offices but have appointed local consultants on their behalf.

Earlier, the NBR amended the VAT Act to provide direct VAT benefits to companies.

According to the Value Added Tax and Supplementary Duty Act, 2012, companies like Facebook, YouTube, and Google have to register for VAT and set up offices in Bangladesh or hire VAT agents.

An additional commissioner at NBR, requesting anonymity, told Dhaka Tribune that the government prior to the tech company registering was getting revenue from Google with the help of the Bangladesh Bank.

 “Bangladesh bank was collecting VAT from Google through Google AdSense. It gives us the amount after charging for their work. But from now we can get VAT directly from Google as it is registered now,” he added.

Tech companies like Facebook, Google, YouTube, and Microsoft have been earning revenue from ads and the government took steps to address revenue loss from the tech companies.

NBR sources said that it was decided international tech companies like Facebook, Google, YouTube and Microsoft would not be able to conduct business in Bangladesh without VAT registration.

According to that decision, these companies will either have to set up offices in Bangladesh, or hire VAT agents.

If they wanted to do business in Bangladesh, then they would have to pay taxes to the government for conducting its business here.

In other words, there are some more complications including not having a permanent office in Bangladesh, which may be solved permanently in the proposed budget for the fiscal year 2021-22.

Currently, only the provision of hiring a VAT agent in case of payment of VAT is applicable at present.

If resolved, the issue of hiring an agent will remain as an alternative opportunity. Currently, under VAT law, local VAT agents are responsible for paying VAT.

Companies have been facing various problems since 2019 to get VAT registration and submit VAT returns.

There was a demand from them to get this service directly as per VAT law.

But due to legal complications, foreign companies had to hire VAT agents to get VAT services.

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10 companies responsible for 40% of total VAT in FY21

 Meraj Mavis

 Published at 08:24 pm August 2nd, 2021


Tobacco manufacturers, telecom operators among the top VAT payers, dishing out Tk38,111 crore in total

A total of 10 companies from the large taxpayers unit (LTU) were responsible for depositing the most value added tax (VAT) to the state coffers in fiscal year 2020-21, in the line of Tk38,111 crore.

Total VAT and supplementary duty (SD) paid in FY21 was Tk97,509 crore, of which the 10 companies paid about 40% of that.

The LTUs paid Tk49,252 crore in VAT of the total. Calculated, the 10 companies contributed to more than 77% of that amount.

According to the latest figures from the National Board of Revenue (NBR), the highest VAT payers were tobacco manufacturers, telecom operators and pharmaceutical companies.

Overall, the tobacco companies paid Tk27,000 crore, the telecom operators Tk8,466 crore and the pharmaceuticals companies Tk3,133 crore.

Currently, the LTU comprises 110 companies, who usually pay more than half of the total VAT total every fiscal.

According to NBR data, British American Tobacco Bangladesh (BATB) was the highest VAT payer, depositing a whopping Tk24,911 crore into the state coffer.

Mobile operator Grameenphone (GP) came in second, paying Tk4,485 crore, or 23% more than FY20.

NBR chairman Abu Hena Md Rahmatul Muneem expressed his satisfaction with Dhaka Tribune, saying: "The rising demand in the economy and improved relationship with the taxpayers made the success possible. Moreover, it’s our priority to stop that cat and mouse game between tax evaders and revenue collectors.

As you know, mainly consumers pay VAT. Various companies collect that VAT from consumers and submit it to the NBR," he added.

Another operator, Robi, came third, paying Tk2,344 crore, 48% higher than FY20.

United Dhaka Tobacco, which is in fourth place, paid Tk2,000 crore, but 27% less VAT than the previous fiscal. 

Banglalink was fifth, paying Tk1,500 crore, a 31% jump from FY20.

Unilever Bangladesh was sixth, paying Tk655 crore, followed by Standard Chartered Bangladesh with Tk579 crore, Petrobangla Tk578 crore, Bangladesh Power Development Board (BPDB) Tk540 crore and Square Pharmaceuticals with Tk510 crore.

Analyzing the trend of paying VAT by LTUs, it can be seen that among the institutions, banking, soap and soft drink business performed above expectations amid the Covid-19 pandemic. 

Around Tk3,000 crore has been paid as VAT from the banking sector, as banks  levy VAT, SD and excise duty on various types of services.

As such, the last time VAT was paid in the banking sector, the growth was the highest, 43%.

Growth in VAT payment was notable among carbonated beverages, with 39%, and soap manufacturers with 35%.

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Apparel trade body urges revenue board to revert to port cargo delivery

 JASIM UDDIN HAROON | Published:  August 15, 2021 08:42:21 | Updated:  August 15, 2021 10:21:43

Bangladesh's biggest export- earners --- apparel makers-are opposing delivery of imported cargoes from private depots instead of Chittagong Port as they find it "expensive and time-consuming".

The National Board of Revenue on July 25 ordered the delivery of imports from 17 such depots directly in order to ease shipping congestion at the country's premier seaport.

Usually, the depots set up around the port handle cent per cent of exports worth around US$35 billion. They also handle 25 per cent of all imports. But, after the issuance of the order, all import cargoes were meant for depots and the consignees took delivery from there.

The country's clothing-sector apex body, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Thursday applied to the Customs Authority urging it to go back to the old system of cargo handling under public sector.

It said exorbitant higher cost at the depots cause them to lose competitive edge on the global RMG market-at a time

when competitors are aggressively moving to usurp Bangladesh's position in the trade.

The BGMEA has also written to the Chairman of the NBR and the Chairman of the Chittagong Port Authority for action on the matter immediately.

Its letter, a copy of which is obtained by the FE, says that the cost at the depots is at least 118 percent higher at Tk 9,338 than the Ctg Port tariffs, applied for 20-foot-mark containers.

And 40-foot-mark container handling at the depots costs 91 percent higher at Tk 11,466 than port charges.

The association also pointed out that there is another charge called 'extra movement' which is US$ 4417 [51.97X85] for a 20-foot container and $6625 [77.95X85] for a 40-foot one.

It mentioned in its letter that there was no such extra-movement cost at the seaport.

The apparel traders also said the private depots have lack of required equipment supports, leading to delay in delivery of goods, mostly imported capital goods like raw materials and garment chemicals.

"We need 6 days to take delivery from the depots, but this is just two days from the Ctg port," Syed Nazrul Islam, first vice president at the BGMEA, told the FE over phone.

Mr Islam said that they did not raise their objection at the time when the revenue board issued the order as it was unnecessary then.

"The port now has no congestion, the ship's turnaround time has dropped to 72 hours, so we want to go back to the previous system".

He said this is a very crucial time for the clothing sector which faced closures on the back of the strict lockdown enforced to curb coronavirus transmission, which had spiked into thousands with over 200 daily deaths.

"For the interest of the clothing sector, we should go back to the earlier system," Mr Islam noted.

He, however, suggested that the Ctg Port should start construction of the Bay Terminal in order to reduce dependency on the depots owned by private businesses.

Bangladesh is now rated third-largest clothing exporter in the world as Vietnam has knocked it out of the second position, according to the World Trade Statistical Review 2021.

On the other hand, depots represented by a body named BICDA contested the allegations.

Nurul Qayyum Khan, president of the Bangladesh Inland Container Depots Association (BICDA), a representative organisation of 19 depots, said most of the allegations were not true.

"The tariff comparison mentioned in the letter is not true," Mr Khan gainsaid.

He said: "There are some delays because of the deplorable road situation in Ctg and heavy rainfalls that disrupted work at the depots."

Mr Khan mentioned that the global freight cost has shot up by 250 per cent but "We are in the same tariff status for the past eight years".

The BICDA chief said that they did a splendid job in the past more than one week by easing the port congestion.

"Port was almost shut situation-we played very time-befitting role in freeing the congestion," he said.

"There was more than 17000- TEU export backlog at depots, ships' waiting time rose to 6/7 days-these are now no more. And all credit should go in favour of us," he further said to underpin arguments from their side of the trade.

"But the reality is that we are blamed for the higher cost and delay in delivery," he added.

Bangladesh has 19 depots with two remaining shut. They have a storage capacity of 78700 TEUs. Currently they have stored 60,502 TEUs.


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Bangladesh's revenue receipts increase 21pc

 DOULOT AKTER MALA | Published:  August 15, 2021 08:32:09 | Updated:  August 15, 2021 14:59:42

The tax revenue collection recorded an impressive 21 per cent growth in the fiscal year (FY) 2020-21 over that of the previous FY.

Greater mobilisation of corporate and withholding tax made the feat possible on the part of the National Board of Revenue (NBR), the NBR data show. However, the collection fell short of the target by Tk.411.18 billion, set for the last FY.

The NBR collected Tk2.61 trillion in tax revenue in FY 2020-21against the revised target of Tk 3.01 trillion.

The updated data for the last FY was placed before National Board of Revenue (NBR) chairman Abu Hena Md Rahmatul Muneem in a meeting on Thursday last.

Though the collection fell short of the target, tax officials and economists have appreciated the NBR's efforts for registering higher internal revenue under a very difficult situation.

The tax collection growth was two-fold in FY '21 against its average growth of 10 per cent during the last FYs.

The customs wing posted the highest 27.41 per cent growth last FY followed by income tax 20 per cent and VAT 15.44 per cent.

In FY 2019-20, the customs and VAT wings had posted a negative growth of 4.48 per cent and 3.11 per cent respectively while the income tax grew by only 3.99 per cent.

The VAT wing collected highest revenue worth Tk 975.07 billion, followed by income tax and travel tax Tk 867.2 billion and customs wing Tk 771.50 billion.

The original target for the last FY was Tk 3.30 trillion, which was later revised down to Tk 3.01 trillion.

In FY 2019-20, the NBR collected Tk 2.18 trillion, registering a negative growth.

Talking to the FE, a field-level commissioner said that the economy has started learning to live with the pandemic that is showing no sign of an early exit.

Tax collection usually grows in line with the rising consumption of goods, use of services and implementation of development projects, he said.

The fiscal measures also helped boosting the tax revenue collection, he added.

He said there is a misperception that tax collection growth was not effort-based as the withholding tax contributes significant part, but the taxmen needed to monitor proper depository of taxes to the public exchequer by deducting authority, he added.

The taxmen's all-out effort is the major reason of the impressive revenue collection growth last FY, he said.

The opportunity to disclose undeclared money has also contributed a significant part of the collection, he added.

Finance adviser to the last caretaker government Dr Mirza Azizul Isam, however, found the revenue collection growth 'surprising'.

"I have doubt about the collection data as it is not mutually consistent with other economic indicators, including the GDP growth," he said.

He said the Bangladesh Bureau of Statistics (BBS) revised the GDP growth downward and the import growth was not satisfactory in the whole year.

The BBS estimated that the country achieved 5.47 per cent growth in FY 21 against the government's target to attain a lofty 8.2 per cent growth.

According to the Bangladesh Bank (BB) data, import payments did not increase significantly in FY'21 compared to the pre-Covid fiscal year (FY'19).

However, imports grew nearly 20 per cent year-on-year, following significant rise in the month of June, 2021.

Officials, however, said the advance tax at import stage of major revenue-generating items was one of the major reasons behind the higher revenue growth last year.

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Tax receipts from DSE jump 54pc

 BABUL BARMAN | Published:  August 16, 2021 09:57:24


The government's revenue earnings from the Dhaka Stock Exchange (DSE) rose 54 per cent year-on-year in the first month of the current fiscal year as trading volume was on the rise.

Market analysts said on the back of rising trading volume, the government earnings from the Dhaka bourse rose accordingly, as earning is related to turnover.

The market turnover rose significantly as the buoyant investors have given boost to the capital market amid growing confidence riding on various regulatory reforms to bring disciple in the market, said a merchant banker.

The government bagged revenue worth Tk 289 million in the first month of the FY 2021-22, which was Tk 188 million in the same month in the FY 2020-21, registering an increase of 54 per cent, according to data available with the DSE.

Of the total earnings in July 2021, Tk 233 million came from the TREC holders' commission, popularly known as brokerage commission, while Tk 56 million came from the share sales by sponsor-directors and placement holders, the DSE data shows.

In July last fiscal year, Tk 60 million came from the TREC holders' commission and Tk 128 million came from the share sales by sponsor-directors and placement holders.

However, month-on-month, the government earnings from DSE fell by 46 per cent in July as the government raked in Tk 544 million in June, 2021.

The government earned the amount on TREC (trading right entitlement certificate) holders' commission and share sales by sponsor-directors and placement holders.

The DSE, on behalf of the government, collects tax as TREC holders' commission and share sales by sponsor-directors and placement holders at the rate of 0.05 per cent and 5.0 per cent respectively and deposits the amount to the government exchequer.

A DSE official said the government earnings from the prime bourse rose as trading volume increased substantially in July, the first month of the FY2021-22, which helped higher revenue collection.

"The earnings are related to turnover. It's usual that tax will rise if turnover increases," he said.

He noted that as the turnover marked an increase in the first month of the current fiscal year compared to the previous fiscal year's July, so did the tax.

The daily turnover, the important gauge, jumped to 15.53 billion on average in July 2021, soaring 445 per cent over the previous fiscal year's July of Tk 2.85 billion.

DSEX, the prime index of the DSE, rose 275 points or 4.47 per cent in July 2021.

The government's revenue earnings from the DSE registered a 10 years high to Tk 2.66 billion in the FY 2020-21 as the DSE turnover recorded a decade high in few sessions in the last fiscal year.

The country's capital market also posted the highest return of 54 per cent in a decade in the FY 2020-21 despite ongoing pandemic.

However, in the FY 2019-20, the government's earnings from the DSE plunged more than 10 years low to Tk 1.04 billion due to sluggish market turnover coupled with trading suspension for more than two months due to Covid-19 outbreak.

The DSE paid tax worth Tk 2.72 billion in FY2011-12, Tk 1.27 billion in FY2012-13, Tk 1.54 billion in FY2013-14, Tk 1.74 billion in FY2014-15, Tk 1.58 billion in FY2015-16, Tk 2.46 billion in FY2016-17, Tk 2.33 billion in FY2017-18 and Tk 2.51 billion in FY2018-2019 on TREC holders' commission and share sales by sponsor-directors and placement holders.

However, the DSE paid tax worth Tk 4.47 billion in the FY2010-11, the highest in its history, when the market witnessed a wild trend before crashing.

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TBS Report

17 August, 2021, 06:00 pm

Last modified: 17 August, 2021, 06:05 pm

Cumilla customs submits highest online returns in the country again

Cumilla commissionerate sources on Tuesday stated that they were able to file a 95.33 per cent VAT return online in July


Cumilla Customs, Excise and VAT Commissionerate has again come out on top in submitting the highest online returns in July in the country.

Cumilla commissionerate sources on Tuesday stated that they were able to file a 95.33 per cent VAT return online in July.

In this regard, Commissioner of Cumilla Customs, Excise and VAT Commissionerate Belal Hossain Chowdhury said, "Our repeated success streak is the result of the hard work, sincerity and strategy of everyone in the team. Our efforts will remain wholehearted towards the continuation of this success."

The Cumilla commissionerate made history by submitting the highest online returns for 10 consecutive months till May this year and they have done so with only one-third of their manpower capacity.

In the last financial year, Cumilla collected Tk 3,225 crore as customs and excise duty, which is the highest in its history.

Earlier, a maximum of Tk 2,974 crore was collected in the 2018-19 financial year.

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পপুলার গ্রুপের দুটো প্রতিষ্ঠান থেকে ৬.৩৬ কোটি টাকা ভ্যাট আদায়

 এফই অনলাইন ডেস্ক | Published:  August 18, 2021 22:51:13 | Updated:  August 18, 2021 22:55:43

ভ্যাট গোয়েন্দা অধিদপ্তর পপুলার গ্রুপের দুটো সেবা প্রদানকারী প্রতিষ্ঠান তদন্ত করে প্রায় ৬ কোটি ৩৬ লক্ষ টাকার ভ্যাট ফাঁকি উদঘাটন করেছে।

ভ্যাট গোয়েন্দার দাবি মেনে নিয়ে পপুলার গ্রুপ ৬ কোটি ৩৬ লক্ষ টাকা ভ্যাট জমা দিয়েছে।

প্রতিষ্ঠান দুটো হলো পপুলার ডায়াগনস্টিক সেন্টার লিঃ, হাউজ নং-১৬, রোড নং-০২, ধানমন্ডি, ঢাকা এবং পপুলার মেডিকেল কলেজ এন্ড হাসপাতাল লিঃ, হাউজ নং-২৫, রোড নং-০২, ধানমন্ডি, ঢাকা । 

তদন্তকালে প্রতিষ্ঠানের সি.এ. ফার্ম কর্তৃক প্রত্যায়িত বার্ষিক প্রতিবেদন ও ভ্যাট বিষয়ক অন্যান্য তথ্য-উপাত্তের আড়াআড়ি যাচাই করে এই ফাঁকি উদঘাটন করা হয়।  

ভ্যাট গোয়েন্দার উপ-পরিচালক নাজমুন নাহার কায়সার এর নেতৃত্বে একটি দল পপুলার ডায়গনস্টিক সেন্টার লিঃ এর  জুলাই/২০১৫ হতে জুন/২০২০ পর্যন্ত সময়কালের কার্যক্রম তদন্ত করে।তদন্ত মেয়াদে বিভিন্ন সেবার বিপরীতে উৎসে ভ্যাট ফাঁকিবাবদ ২,৪২,৮৯,৭৭০ পাওয়া যায়।এই অপরিশোধিত ভ্যাটের উপর ভ্যাট আইন অনুসারে ২% হারে ১,১২,৭৮,৮৫৬ টাকা সুদ প্রযোজ্য। 

অপরদিকে, ভ্যাট গোয়েন্দার উপ-পরিচালক ফেরদৌসী মাহবুব এর নেতৃত্বে একটি দল পপুলার মেডিকেল কলেজ এন্ড হাসপাতাল লিঃ প্রতিষ্ঠানটির জুলাই/২০১৫ হতে জুন/২০২০ পর্যন্ত সময়কালের কার্যক্রম তদন্ত করে।তদন্ত মেয়াদে বিভিন্ন সেবার বিপরীতে উৎসে  অপরিশোধিত ভ্যাট বাবদ ১,৮৪,২০,৪৫৬ টাকা বের হয়।এই অপরিশোধিত ভ্যাটের উপর ভ্যাট আইন অনুসারে ২% হারে ৯৬,২৬,৬০৩ টাকা সুদ প্রযোজ্য।

প্রতিষ্ঠান কর্তৃপক্ষ তদন্ত মেয়াদে অপরিশোধিত মূসক ও সুদ বাবদ উদঘাটিত সমুদয় রাজস্ব স্বপ্রণোদিত হয়ে ও স্বেচ্ছায় সরকারি কোষাগারে জমা প্রদান করেছে।


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District-level monitoring to stop individual tax, VAT evasion

 Meraj Mavis

 Published at 09:13 pm August 18th, 2021

NBR to collaborate with attorney general's office for speedy disposal of tax evasion cases

The National Board of Revenue (NBR) has decided to bolster monitoring at the district-level and Dhaka’s commissionerate offices to speed up collection of individual income taxes and VAT during Covid-19.

Moreover, these inspections are going to be carried out by the NBR chairman and members of the revenue board.

Additionally, NBR officials will meet with the attorney general and his colleagues every three months to speed up the disposal of income tax, VAT and customs cases in the High Court. 

The decisions were taken at a recent meeting of the Internal Resources Division (IRD) of the Ministry of Finance.

The government has fixed Tk389,000 crore as the revenue target for the 2021-22 fiscal year, of which Tk104,952 crore is expected to be collected from income tax alone.

But according to NBR’s latest data, out of 5.6 million taxpayers who registered in the last fiscal year, 56.6% did not file tax returns.

AB Mirza Azizul Islam, economist and financial adviser to a caretaker government, said the initiative of the the chairman and members of the NBR monitoring operations at the district-level is good move. 

“It is well known that many are evading taxes and VAT. If we want to stop this, we have to increase monitoring. But just making a good decision is not enough, it needs proper implementation,” he added. 

He further said revenue collection has been good during the Covid-19 period. 

“However, Bangladesh has one of the lowest tax-to-GDP ratios in the world, this must increase,” he said. 

It would be good for the economy if the deficit in the budget could be kept below 6.3% through this initiative, he also said, adding that in the current situation, both the expenditure and revenue of the government will have to be increased.

Regarding the pending cases, he said the government should go for alternative to dispute resolution (ADR) to collect the tax revenues it is owed.

At the meeting, NBR Chairman Abu Hena Md Rahmatul Muneem also instructed the authorities to play the proper role in collecting income taxes as per the target by preventing fraud, according to sources present at the meeting. 

Apart from this, he also directed the agency to further strengthen the activities of this sector by discussing income tax policy issues with various trade bodies and chambers.

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Authorities find ways to pay 75pc of foreigners' salaries in home countries

 DOULOT AKTER MALA | Published:  August 19, 2021 09:57:27

The authorities concerned met virtually on Wednesday, devising ways for the foreign nationals working in the mega projects here so that they can receive 75 per cent of the pay and perks in their home countries.

Taking part in the meeting, representatives from the respective authorities suggested that the BIDA will have to relax first its condition in this regard before Bangladesh Bank (BB) amending its guidelines.

The representative from Bangladesh Investment Development Authority (BIDA) told the meeting that they would soon seek approval from the Prime Minister's Office, National Board of Revenue (NBR), and BB in this regard, meeting sources said.

The meeting was told that the BIDA will have to revisit its condition on project office expenditures that are being met from the inward remittances.

The Bangladesh Bank (BB) representative made it clear that there is no barrier to remove the legal limitation through amending the Guidelines of Foreign Exchange Transaction (GFET) so that the foreigners can send home 75 per cent of their pay and perks.

But, the BIDA needed to revisit its condition before amending the GFET, he added.

The meeting was told that the projects are being implemented through suppliers' or buyers' credit and the loan proceeds do not enter Bangladesh.

The project offices in Bangladesh get payment from their principal or head office.

As per the BIDA conditions, the remittance comes to the account of the project office to meet the local expenses. The BIDA gives permission to the project office on the condition of meeting all the expenses of the Bangladesh office from the head office.

If this condition exists, salary and perks of the foreign nationals would come from the head office of the project as usual.

The BIDA, however, agreed in principle to review the condition soon subject to approval by the 'high-ups'.

The BIDA rules would require changes for allowing the foreign nationals to receive 75 per cent of payments in their respective home countries.

A senior official of the BB said that they would consider amending the policy upon proposal by the BIDA whether they want the facility for some specific projects or all projects.

He said the BB can allow the facility by issuing circular if BIDA wants to facilitate foreign employees of one or two projects.

However, offering such a facility for all foreign nationals would require amendments to the GFET.

A BIDA official said they would send letters seeking opinions from the Prime Minister's Office, National Board of Revenue (NBR) and BB in this regard.

The NBR representative has also given no objection as foreign project officials are already exempted from payment of taxes.

They need to submit returns annually to the tax authority only.

The BB officials said the government would not be deprived of its due revenue, which is the main concern, if they allow the facility.

Sources said those projects are implemented with foreign loans and 90 per cent of the fund remains in their country.

The demand for receiving salaries and perks in the home country of foreign employees came from two mega projects -- Rooppur Nuclear Power Plant and Dhaka Airport Third Terminal project.

Employers of those projects are basically contractors of those projects which raised the issue for branch office

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Reyad Hossain

21 August, 2021, 10:35 pm

Last modified: 21 August, 2021, 10:48 pm

Move to reduce foreigners, hire more locals in jobs

As per the existing guidelines, for every foreign worker hired, a business entity must employ five locals



The Bangladesh Investment Development Authority (Bida) has come up with a set of recommendations like mandating foreign worker hiring ratio at every tier of job, particularly at mid-level management, in different sectors to offer more job opportunities to the country's own pool of skilled workforce. 

As per the existing guidelines, for every foreign worker hired, a business entity must employ five locals. 

But capitalising on no instructions on conforming to the ratio at every level, multinational companies mainly recruit foreign nationals for mid-level management jobs, leaving many local deserving candidates out of luck.  

They now maintain the ratio in hiring only at low-level jobs. 

When it comes to employing workers in the manufacturing sector, an ongoing industrial project needs to have 10 local workers for every foreign worker hired. The permissible cap goes down to 20:1 when the new facility goes into production.

The permissible percentage of foreigners for educational institutions is a little over 9% of total employees and they also will have to comply with such a limit in hiring at every level. 

Bida in its draft proposal suggests that the government amend the existing guidelines for foreign worker recruitment with a view to making it mandatory for all employers that they abide by the hiring ratio at all job level. The draft proposal will be presented to the Prime Minister's Office next month.

Local entrepreneurs say if the proposed amendment secures approval, local skilled people will get more opportunities at management levels. This will also allow the government to control the number of foreign workers to a permissible limit. 

At the same time, it will be possible to stop the huge amount of money going abroad legally and illegally through the recruitment of foreign nationals, they add.

Ariful Haque, director of Bida, told The Business Standard, "We prepared the proposal to increase job opportunities for Bangladeshi workers at the top level of different companies."

However, representatives of foreign investors think such a proposal might send a wrong message to foreign investors abroad. 

Rupali Haque Chowdhury, president of the Foreign Investors Chamber of Commerce and Industry, said, "Imposing more restrictions on the recruitment of foreign nationals would send the wrong message to foreign investors and increase the burden on compliant companies. If there are any irregularities, actions should be taken according to the law."

"We lack skilled and qualified manpower in many fields. If foreign experts do not come there, the sectors will not develop. We should see what other countries are doing," she said.

Bida in its draft proposal also suggests penalising and even blacklisting foreigners for staying in Bangladesh without a work permit. 

Besides, the investment authority recommends changing the procedure of permitting the setting up of branches, liaison or representative offices, and project offices of foreign companies.

The procedure for granting work permits to foreign nationals will be amended too, according to the proposal.

Bida has already sent letters to ministries and divisions concerned, and business associations, seeking their opinions on the draft proposal.

Besides, Bida proposed some amendments to ensure transparency in expenses of companies while paying foreign workers. 

According to the proposal, no salary allowance or benefit can be taken outside the country without Bida's permission. If a foreign worker leaves the country without paying income tax, their employers will have to pay that.

In Bangladesh, a significant number of foreigners work in local offices of various buying houses in the readymade garment sector.

Kazi Iftequer Hossain, president of Bangladesh Garment Buying House Association (BGBA), said, "Foreign nationals only can be recruited in job levels where there are shortages of manpower with technical knowledge."

"Bangladeshi manpower is now sufficiently qualified to cater to the demand of the apparel sector and buying houses. There is no need to recruit foreign nationals in these sectors anymore," he added.

The BGBA president said over 1,000 foreign nationals are currently working in 300 out of 1,800 buying houses under his organisation.

Officials of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said they will send their opinion on Bida's draft proposal this week.

BKMEA director Fazlee Shamim Ehsan told TBS, "Some projects like Padma Bridge, Rooppur Nuclear Power plant require hiring of foreigners with technical knowledge. Apart from this, our own workforce is good enough for almost all jobs in other sectors, including RMG and textile industries." 

Ahsan H Mansur, executive director of Policy Research Institute, said, "We have to bring in foreigners if we do not have expert manpower. But it will not be wise to impose more restrictions on foreign workers."

Bida's proposal also mentions that the regulations can be relaxed if necessary.

According to Bida, in sectors where there are Bangladeshi skilled workers, priority should be given to them. In addition, even if foreign workers are hired, they will have to submit a proper action plan to the government to transfer their specialised technical knowledge to local workers within five years. If the action plan is not implemented, the work permit of the foreign employees will not be extended.

The contribution of a foreign worker in enhancing skills of his subordinates will be taken into account while considering the extension of their work permit, the Bida proposal reads.

The draft proposal also aims to prevent foreigners from coming to the country on tourist visas and working illegally. People with such visas will not be allowed to work in the country and multiple trips for them will be discouraged. If an employer breaks these rules, the government will take actions against them.

No specific data on foreign workers 

There is no specific data on the number of foreign workers in Bangladesh, but people concerned say the number will be several lakhs.

According to the home ministry, the number is 86,000 and most of them are Indians. As per Transparency International Bangladesh (TIB), the figure is at least 2.5 lakh, of them, only 90,000 are legal workers. 

The National Board of Revenue in 2020 disclosed that more than 14,000 foreign nationals have submitted income tax returns, meaning that all of them have work permits.

The National Skill Development Authority, an institute under the office of the prime minister, revealed at a workshop in 2019 that foreign nationals working in Bangladesh remit about $6 billion every year to their countries. 

A report, published by the Centre for Policy Dialogue in 2015, said Bangladesh has become the third-largest remittance source of India, as Indian nationals sent home around $3.7 billion in 2013.

According to TIB, foreigners working in Bangladesh are illegally sending around $3 billion to their countries a year.

Foreign nationals are working in 32 sectors, including garment industries and buying companies, merchandising companies, NGOs, information and communication technology (ICT) sector, education, engineering institutes, consulting firms, multinational companies, private power plants, international contractors, hotel-restaurants, mobile phone companies, oil and gas companies among others. They usually are involved in mid-level management and higher positions.

According to people concerned, there is a lack of coordination between the organisations responsible for overseeing the employment of foreign nationals in the country. 

They say there is no specific policy in this regard. 

In 2016, the NBR formed a taskforce to gather detailed information on the number of foreign nationals, their income, income tax and their employers. But, that initiative has now been stalled due to a lack of coordination.

The NBR has a provision to impose a 50% penalty on the income tax of an organisation if it employs foreign nationals without a work permit. But there is no information about any organisation being fined under this provision.

According to the Dhaka Chamber of Commerce & Industry, around 2.2 million people enter the job market in the country every year but a large part of them do not get any job. 

As per the Bangladesh Institute of Development Studies (BIDS) study, the educated unemployment rate in the country was 33.32% in 2019. The Covid-19 pandemic, which started last year, has made the situation worse.

Industry insiders say Bangladeshi workers have not yet become a substitute for foreigners in some jobs as they lack information technology and technical knowledge and foreigners are taking advantage of this. 

More than 40 foreigners are working in Sparrow Group, one of the largest readymade garment exporters in the country. 

Shovon Islam, managing director of the company, told TBS, "Bangladeshi workers are still lagging behind in tasks such as merchandising, marketing, price negotiation, different technical works and product design. That is why foreigners have to be recruited. But local people are gradually becoming more efficient."

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Jasim Uddin

22 August, 2021, 03:00 pm

Last modified: 22 August, 2021, 03:17 pm

NBR to verify savings certificate data

It has integrated its system with that of the Department of National Savings

The National Board of Revenue (NBR) has taken steps to verify taxpayers' sanchayapatra (savings instruments) investment information in order to prevent the misuse of tax rebate facilities. 

It says the measures will also widen the tax net.

As part of its measures, it has integrated its system with that of the Department of National Savings. 

The national savings department has already provided commissioners of every tax zone with login IDs and passwords.

Policy Research Institute Executive Director Ahsan H Mansur has welcomed the move. 

But he is not sure whether this will increase tax realisation because sanchayapatra investors pay source tax on their income from savings instruments.  

"But if they are outside the tax net, the NBR can use their information to bring them under the tax net. This will widen the tax net and will also create scopes for realising more revenues from their other income sources," he told The Business Standard. 

Sanchayapatra investors pay 5-10% source tax on interest. 

As per the income tax ordinance, a taxpayer will get tax rebates on sanchayapatra investment. He will get a 15% rebate for investing 25% of his annual income in sanchayapatra. 

But there will be no rebate on investment exceeding that figure. For example, a person earning Tk4 lakh a year can get rebates for investing Tk1 lakh. The rebate will amount to Tk15,000.         

The NBR recently wrote to tax zone officials, asking them to verify taxpayers' sanchayapatra investment information.      

Signed by its tax information management and valuation department's Second Secretary Lincoln Roy, the letter said verifying sanchayapatra investment information would ease taking legal steps against investors. 

But it should be ensured that taxpayers and marginal investors are not harassed while the process should be carried out by officials of joint commissioner and additional commissioner ranks, said the letter.  

It asked officials to send different types of information of taxpayers, including their names and tax identification numbers, the amount of sanchayapatra investment, and whether they had submitted tax returns, every 15 days.   

At the pre-budget discussion on 10 March, NBR Chairman Abu Hena Md Rahmatul Muneem said the government was making efforts to widen the tax net and determine the right amount of taxes using all legal tools.      

NBR sources said a large segment of taxpayers submitting tax returns claim tax rebates against sanchayapatra investment every year. 

But their investment information could not be verified in the past as the NBR database was not connected to that of the national savings department, leading to the misuse of tax rebate facilities.  

Requesting anonymity, a senior NBR official said there had been cases of taxpayers providing false investment information. 

He said integrating the NBR system with that of the national savings department was necessary to deal with such frauds.   

"There are other fraudulent activities too. For instance, many taxpayers buy sanchayapatra just before submitting their returns only to avail rebates. They sell sanchayapatra after submitting returns, which is a serious irregularity. It is like deceiving the government," he explained.         

A five-year sanchayapatra yields 11.28% profit at maturity. Up to Tk30 lakh can be invested in a single name, and Tk60 lakh in joint names. There is no upper limit for institutional investors.


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Handbook on customs tariff

 Doulot Akter Mala | Published:  August 26, 2021 21:33:15 | Updated:  August 26, 2021 21:35:41


Tax rates for a longer period or gradual increase or decrease in taxes with specific planning is considered one of key fiscal measures to lure investment. Bangladesh's businesses have long demanded gradual cuts in high tax rates in a bid to estimate their cost of investment and prepare future plans.

Investopedia, one of leading sources of financial contents on the web, comes in aid. The tax guidebook says every investment has costs. Of all the expenses, however, taxes can sting the most and take the biggest bite out of returns of investors.

It states that tax-efficient investing can minimise tax burden and maximise bottom line-whether investor wants to save for retirement or generate cash.

The Schwab Center for Financial Research that provides individual investors with quality research and decision-making tools evaluated the long-term impact of taxes and other expenses on investment returns.

 It also found that minimising taxes also has a significant effect.

In Bangladesh, the government brings changes in many of the tax rates every year through national budget that other countries also do. Changes in tax rates for individuals, corporate and import-stage taxes leave significant impact on consumer products on the local market.

 Both local and foreign investors often found it difficult to determine the actual payable taxes on import products as taxes are imposed in different forms on a product. Cut in customs duty on a product doesn't mean that prices of that product will go down as there are various forms of taxes which also need to be brought down. There are various forms of taxes on an import product, including Customs Duty (CD), Regulatory Duty (RD), Supplementary Duty (SD), Advance Tax, Advance Income Tax (AIT), Value Added Tax (VAT) at import stage etc on local production. There are also VAT and different types of withholding taxes.

Unlike in previous years, the government has made several changes to tax structures in the budget for Fiscal Year 2021-22, announced on June 3, 2021.

The tax rates are determined through the Finance Act after getting the nod from policymakers in parliament. The tax rates have been imposed by the National Board of Revenue (NBR) through issuing Statutory Regulatory Orders (SROs) - circulars. However, in most cases, those SROs and circulars are not easily understandable to know what the actual tax rate would be on a product.


Importers face the problem most as they have to determine the actual cost of the product to fix consumer prices. Changes in any of the tax rates by the three wings of the NBR---income tax, customs and VAT---leave impact on the pricing of imported products. As per present practice of SRO or circular issuance, each of the three wings issues their SRO or circular on tax changes separately.

 Investors find it difficult to estimate cost of an import item calculating or compiling various taxes scattered in the SROs.

 For example, a recently published SRO on reduction in import taxes on rice says CD has been cut to 10 per cent and RD has been waived. How an importer would know what would be current import taxes on rice?

 Addressing the difficulties of investors, a book has been published with the details of all import items' HS code, total tax rates and others. Tax rates of thousands of import products have been accommodated in the book titled Bangladesh Customs Tariff Solution.

Mohammad Ruhul Amin, an NBR official, compiled the book to give a clear picture of import taxes on each of the items for investors, manufacturers and commercial importers. The 2021 edition, the 10th one of the book by Liton Publications, has incorporated all the measures of tax or exemption from it in the budget for fiscal year 2021-22

 The book has accommodated tariff description as per first schedule, commercial description (only for simplification marked), SRO reference, total tax-incidence (TTI) calculation method, HS code-wise tariff value and minimum value, images of some products, customs procedure code (CPC), prohibition of import policy, export duty and the like.

With the help of this book, investors, importers and other businesses would get a compiled and complete picture of tax rate on a product.

All of the essentials, luxuries, and commercial products having high, medium, low or zero-rated duty have been accommodated in the book.

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VAT on insurance service and the new law

 Mohammad Abu Yusuf | Published:  August 23, 2021 23:17:32

The New VAT and SD Act 2012 was enacted to overcome the weaknesses in the VAT Act 1991 by including cutting-edge issues. In particular, the new Act is said to have been enacted to be implemented in an online environment. The Act specifically addresses the Value-Added Tax (VAT) treatment of new business sectors such as telecommunications, secondhand goods, vendor machines (s.44), and includes few new definitions such as periodic and progressive supply, tax fraction and lay-by agreement. Scrapping tariff value for VAT is an improvement over the old Act because tariff values were arbitrary for specific products. In the new law, it is the transaction value (price actually paid or payable) which is the basis for taxation.

A beauty of the new VAT law is the timing for remitting VAT to the government. The new VAT law allows tax to be paid to government when the tax return is due (the 15th of the following month). It eliminates the requirement under the VAT System of 1991 for manufacturers and some service providers to pay VAT in advance (i.e. deposit money to keep positive balance under the old Account Current System) before clearing goods from factories or providing services. The new law is thus more business-friendly. The Regulations increase the current registration threshold from Tk. 8 million to Tk. 30 million per annum. This change seems to have been welcomed by business community and small traders.

This new Act, however, suffers from few definitional issues. For example,  definition of "tax [S 2(24)] means VAT, turnover tax, supplementary duty, and shall, in relation to realisation of arrears, also include any interest, monetary penalty or fine. Inclusion of interest, penalty or fine in the definition of tax seems confusing and not intuitively appealing. Tax is compulsory unrequited payments; interest, monetary penalty or fine does not have the identical feature of tax. As such these three items may be taken out from the definition of tax. According to GFS (2014, IMF), in principle, fines and penalties charged on overdue taxes or penalties imposed for the evasion of taxes should be recorded in fines and penalties category and not as taxes. However, if payments of fines or other penalties cannot be separated from the taxes to which they relate, the fines and penalties relating to a particular tax are recorded together with that tax; and fines and penalties related to unidentifiable taxes are classified as other taxes. 

Among these weaknesses, the issue of VAT on insurance services seems critical and warrants elaboration. A reading of the New VAT Law finds charging section (S. 4, 15) that allows imposition of VAT on services. There is however, no procedure for imposition and collection of VAT on insurance services. Rule 34 only mentions few instances of increasing and decreasing adjustments. Contrary to the current law, specific guidelines were in place for assessment and collection of VAT from insurance firms under the previous VAT law/Rules of 1991. This paper aims to provide a description containing the relevant issues for VAT collection from Insurance Service.

VAT ON INSURANCE SERVICE: In general insurance, VAT/GST should apply to the insurer's taxable value added, where value added is the difference between premium receipts and claim payments. A review of VAT legislation of a number of countries (e.g., New Zealand, Australia, Tanzania) reveals that their legislation/regulations clearly mentions the base value for imposition of VAT on general insurance service.  For example, New Zealand applies VAT on insurance company premiums (fire and general insurance company), commissions and other income (such as proceeds from the sale of damaged assets); deductions are allowed on outward reinsurance, on VAT paid on purchases (including goods purchased to settle claims) and tax fraction of payments made in satisfaction of claims. This is the basis of imposition of VAT on insurance service. Such provision is absent in our VAT and SD act 2012.

Taxing General Insurance under Credit Method VAT: To use the credit methods of VAT in the case of insurance, premiums received should be defined as sales while payment of claims as purchases. It means that the full amount of premiums should be taxed at applicable VAT rates. And VAT applicable on claims shall be creditable as input taxes against VAT due on premiums.


NECESSITY OF GUIDELINE FOR VAT ON INSURANCE: Unlike comprehensive provisions with regard to VAT on insurance services in the legislation of other countries, VAT and SD Act 2012/Rules 2016 lacks provisions on which value VAT will be imposed or how will payout (indemnity payment) be treated in assessing VAT.  Rule 34 is the only rule that mentions about the increasing and decreasing adjustments to be made in the preparation of VAT return and calculation of VAT liability. It does not contain necessary issues such as scope of tax, value on which VAT will be assessed on insurance service, input tax credit, treatment of claim payment and the issue of Dual insurance and Reinsurance in assessing VAT liability. As stated earlier, such issues had been there in the NBR General Order (no-10/mushak/2002 and 03/mushak/2003 issued under VAT Act 1991) and Rules 1991 respectively. A comparison of current rules/provisions with the general order of 2002/2003 gives an impression that we have gone backward instead of going forward in having necessary provisions for VAT on insurance service. All rules, orders and guidelines issued under the (repealed) VAT Act 1991 AND VAT Rules 1991 stand rescinded with the issuance of the SRO (no 170-ain/2019/27-mushak dated June 13, 2019). Thus, with  the effect of VAT and SD Act 2012 and Rules 2016 from FY 2019-20, the rules or orders made under the 1991 Act/Rules are no more in existence. In other words, a vacuum exists in having provisions/orders concerning VAT on insurance under our new VAT law. It is therefore necessary to issue Rules/General Order detailing VAT collection guideline on insurance services without delay.

The general orders issued in 2002 and 2003 may be taken as a guiding factor in this regard. Provision for VAT collection on the premium of dual insurance policy (when the same person is insured with two or more insurers separately against the same interest in the  same subject matter against the same risk for the same period of time) is enshrined in 2(ga) of the general order 10/mushak/2002. Although dual insurance  is often subject to conditions (such as 'other insurance' clause, principle of contribution to be followed to restrict indemnity to the value of insurable interest) VAT will be applicable as the 2nd insurer is getting premium for issuing the dual insurance policy. So this provision may be included in the guideline to be issued by the NBR. The earlier General orders however did not have express provision on 'input tax credit' and 'treatment of reinsurance'. As reinsurance is not a new policy i.e., reinsurance does not involve individual policies, but is more a matter between insurance companies (e.g., Sadharan Bima Corporation known as SBC will not issue any insurance policy to the ceding company for taking reinsurance cover from the SBC) -- an arrangement (treaty) of transferring risks, there is no scope to collect VAT from the ceding company. Reinsurance premiums are essentially inter-company transfers that spread out the companies' risks. Reinsurance is, therefore, usually exempted from the payment of VAT and it is logical to do so. National tax authorities however enjoy authority to make different laws. 

Canada's federal tax authority was  moving to enforce a three-year-old rule that slaps a value-added tax on reinsurance premiums, paid out by Canadian insurance units to their overseas affiliates. It is pertinent to mention that the premium on the underlying insurance policy is subject to VAT and reinsurance premium is usually paid out of the premiums received from the underlying insurance policy. Imposition of VAT on reinsurance premium may result in double taxation. The OECD countries except New Zealand and to a limited extent Finland exempt all forms of reinsurance from the VAT.

CLARIFICATIONS NEEDED ON SUB-RULES OF RULE 34: VAT Rule 34 of Bangladesh allows a decreasing adjustment by the insurer for making a payment to another person under a contract of insurance subject to four conditions. It is not clear if the payment is made as compensation (to indemnify) under the policy. The second and third conditions also do not seem relevant. For example, condition no 34(1) 'kha' mentions that -"the payment is not made in respect of a supply to the insurer or an import by the insurer". This condition gives an impression that the insurer and the insured are engaged in some activities other than the insurance matters. Other transactions or businesses should not get a place in this situation. The only issue that seems pertinent here is "indemnity payment against claim". As such, other issues (other than payment of indemnity) should not be linked (and it is rather irrelevant) to make the matter complex.  It seems logical to allow decreasing adjustment for VAT which is equal to the tax fraction of the payment made as indemnity. If these four conditions are to be kept in the rule, then illustrations with rationale and examples have to be developed/circulated or borrowed from the country from which this rule were copied in toto (i.e.  Section 76 of the Tanzanian VAT Act, 2014).

Similarly, Rule 34 (2) (a) of the VAT & SD Rules 2016 needs an analysis. This rule reads: "Any registered insurer shall be able to make an increasing adjustment, if - (a) the insurer collects any money (except worse or precedent setting damages) by applying his acquired rights under the insurance contract" This sub-rule needs discussion as it may be difficult to understand due to its technicality; it deals with the  'subrogation principle', a basic principle of general insurance. An explanation has been attempted in the following paragraph to justify the increasing adjustment.

INCREASING ADJUSTMENTS FOR PAYMENTS UNDER SUBROGATION: Rule 34 (2) (ka) provides for increasing adjustment for VAT applicable on money received through application of subrogation rights. If the insurer receives any money because of his being stand in place of other" (i.e. by dint of subrogation to exercise the right of the other person], an increasing adjustment will be made.  Subrogation is the right of one person to stand in the place of another in the application of the law. This (subrogation) is one of the six basic principles of general insurance. Subrogation principle is applied to preserve the principle of indemnity and to prevent the insured party from making profit out of any loss arising in terms of a contract of insurance.

This principle provides rights to the insurer to take whatever steps it deems necessary to recover the amount of the loss from the third party (that caused an insurance loss to the insured), after the insured party has been compensated for that loss by the insurer.

WHY INCREASING ADJUSTMENT: In general insurance, VAT/GST is usually applied to the insurer's taxable value added, where value added is calculated by deducting the indemnity payouts (and taxable purchases) for the loss incurred from the premium receipts. In this case, indemnity payouts reduce the 'valued added amount' and thus reduce VAT liability. When the insurer collects/receives money from the liable third party by applying the substitution rights (acquired under the principle of subrogation), his indemnity amount gets reduced by the amount collected through subrogation. This in turn increases his value added and as such an increasing adjustment (for VAT applicable on money recovered through subrogation) may be made to assess the proper amount of VAT payable by the insurer.

An example is given below:

Premium amount= Tk. 50000, Indemnity payment: 30,000, VAT liability = (50,000-30000) *15 per cent= Tk. 3000.

If the insurer had paid indemnity of Tk. 30000 to the insured and recovered (collected) Tk. 10,000 from a third party (who was found liable for the damage) by applying his substitution rights under Subrogation principle, the insurer's VAT liability will be:

VAT amount: Tk. 3000+ increasing adjustment (15 per cent on Tk. 10,000) = Tk. 4500

  This VAT amount can also be assessed in the following alternative way:

  VAT rate* (50,000-30,000) + amount recovered through acquired rights under subrogation principle (Tk. 10000)

=15 per cent (20,000+ 10,000) =Tk. 4,500

VAT RETURN FILING PRACTICE BY INSURANCE FIRMS IN BANGLADESH: An examination of the VAT return filed by a general insurance company (Company X) reveals that the insurance companies make increasing or decreasing adjustments in the case of policies issued on co-insurance basis.

Increasing adjustment-- Leader Company shows amount of VAT payable on its part of the total premium receipt (say Tk. 1, 00,000 VAT of which Leader's share is Tk. 90,000 and Non-leader's share Tk. 10,000). As leader company's share is Tk. 90,000, it will have to make increasing adjustment for VAT payable on non-leader's part of the premium i.e., on Tk. 10,000 to show the total VAT of Tk. 100,000 payable on the insurance policy. This is in line with the provision of the repealed NBR general order 10/mushak/2002 that -'the leader company shall collect and pay total VAT to the government'.

This is illustrated in the following example:

Say, total VAT on general insurance premium is Tk. 1,00,000

  Leader's share: 90,000

  Non-leader's share: 10,000

Leader's VAT return:

Payable VAT 90,000 + Increasing Adj: 10,000 (for receipt from non-leader)

Total Treasury/Net payable) --100,000

Decreasing adjustment-- In the case of Co-insurance, usually leader is liable to pay VAT on the total premium. And VAT is shown in Leader Company's VAT return. Other non-leader companies share the premium and risk for their proportion. In such cases, non-leader insurance companies take decreasing adjustment for VAT payable on their portion (paid by the leader) of the insurance policy issued

Example of Non-Leader's VAT return

Payable VAT= 10,000

Decreasing adjustment (10,000)

Total Treasury deposit-- 000

CONCLUSION: The discussions made so far makes it clear that there exists a gap in our new VAT system with regard to imposition and collection procedure of VAT from insurance firms. It is imperative to issue standing orders/guidelines narrating the calculation method of value on which VAT is to be assessed on insurance service, the treatment of indemnity payment (payout) to the insured, treatment of reinsurance and if there will be any scope to take input tax credit by the insurance firms. The scope of exemption i.e., insurance services/types that will enjoy exemption from VAT needs to be specified.

Detailing out provisions concerning VAT treatment on reinsurance, input tax credit, value for VAT imposition and the scope of exemption (life insurance is exempted under the 2nd Schedule of VAT Act 2012) is necessary. The National Board of Revenue (NBR) may consider issuance of orders/guidelines under the VAT & SD Act/ Rules specifying the aforesaid issues so that no grey area is left; and both the tax payers and tax collectors get a uniform idea about the scope and methods of VAT on insurance service

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Bangladesh's tax receipts from large units plummet in July

 DOULOT AKTER MALA | Published:  August 28, 2021 09:41:04 | Updated:  August 28, 2021 16:08:13

Tax collection from Bangladesh's large manufacturing industries plummeted, registering a negative growth in VAT receipts in July, as a countrywide 'strict lockdown' for 18 days for checking corona transmission dealt them a stumbling blow.

Field-level tax officials said a significant part of revenue was lost for the lockdown, causing negative growth in VAT collection by 25 per cent in the month of July.

And national revenue collection in the first month of the current fiscal dropped 6.24 per cent compared to same month's last year.

Bangladesh had been hamstrung under a strict lockdown since July 23 till August 10, 2021 when the pandemic covid took an alarming turn.

Only export-oriented industries remained out of the purview of lockdown from August 1.

However, export-oriented industries are not considered revenue- generating because of their being exempted from paying taxes in many areas.

Production in the large manufacturing units remained suspended during the restrictions, affecting VAT collection, officials said.

In view of the situation, VAT-collection target from large taxpayers has been slashed by Tk 80 billion recently for the current fiscal year.


Businesses said their production process had been suspended during lockdown following instructions of the government and also for a decline in demand.

President of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman said retail industries are the worst sufferers as consumer demand declined significantly during the time of home-stay.

"They managed to sustain after last year's lockdown with their hard-earned savings. But, this year they have nothing, forcing many shop-owners, travel agents, hotels become bankrupt," he added.

The chamber leader suggests the government should promote domestic tourism and local industry now, as world economies and trade have yet to recover fully from the covid shocks.

"It is appreciated that the government has been strongly backing the exporting sector to promote in this pandemic time, but it is high time to focus on local businesses or homegrown businesses to help them revive," he said about economic adaptation strategy.

And retail demand can only go up when business confidence will be back on the market, which is largely dependent on mass vaccination, he added.

"Until the whole of the country is vaccinated, it is very difficult to open up the whole economy entirely," he said.

Large taxpayers' unit (LTU) under the Value-Added Tax (VAT) lost Tk 25 billion during the last lockdown, officials said.

According to LTU's estimation, it has lost Tk 1.0 billion in VAT per day during the 18-day stay-at-home period as the British American Tobacco Bangladesh (BATB) company suspended its production at government's bidding.

BATB Managing Director Shezad Muneem, however, says it was their lean period for business and the company has been concentrating on maintenance.

He expressed optimism about recovery of the loss incurred due to lockdown.

President of the Foreign Investors Chamber of Commerce and Industry (FICCI) and Managing Director of Berger Paints, Bangladesh Rupali Chowdhury said they incurred huge loss due to closure of production.

"Sale of products remained suspended so its production went down eventually," she added.

LTU data reveal that it collected Tk 35 billion less in VAT from large taxpayers during the lockdown last year from March 26 to May 16, 2020.

It collected Tk 22 billion in July 2021, less than half its projected collection Tk 45 to Tk 48 billion.

In FY 21, the wing collected Tk 492.51 billion worth of VAT with a 17-percent growth.

Target for the VAT collection from large taxpayers has been set estimating 18-percent growth this year by revising the original target Tk 661.37 billion with a projected 34.29-percent growth.

Aggregate tax-revenue collection faced Tk 72.27-billion shortfall against its target in the month of July.

The VAT wing collected Tk 42.34 billion against its target for Tk 76.80 billion.

And the customs wing of the NBR collected Tk 48.66 billion, with a 3.0-percent negative growth, compared to the collection in the corresponding month last year. The target was Tk 74.56 billion.

However, income-tax collection grew 15 per cent in the month of July last largely because of upward revision in source tax in the budget for the current fiscal year.

The government has set a Tk 3.30-trillion target for the NBR in the FY 2021-2022.


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Bangladesh needs progressive taxation to ensure social justice to poor  

 Jehangir Hussain | Published:  August 28, 2021 21:53:13

It's overdue for Bangladesh to introduce progressive taxation to collect tax from people with the ability to pay and reduce the burden on the poor to pay tax as regressive sales tax that requires the poor to bear a larger load compared to the wealthy.

Progressive taxation is a way to mitigate the societal ills in countries with high income inequality.

According to the National Board of Revenue, until June 2018, there were about 35 lakh tax-identification number (TIN) holders of whom about 19.5 lakh submitted tax returns.

But, this does not mean that those who paid tax did not evade tax.

In Bangladesh, businesses which collect value-added tax (VAT) from consumers also dodge tax by underreporting what they had collected. Many importers rely on under-invoicing to avoid full tax payment.

 Many people don't pay tax out of a feeling that their money won't be spent for the right cause. They also feel that the tax system is complicated to breed corruption and reward the tax-dodgers. They also feel demoralised to see the rich and big companies not paying their taxes properly. Another reason they find is that successive governments offered the opportunities to legalise undisclosed money by paying lower than the normal tax.

 Due to loopholes and irregularities in tax-assessment and-collection systems, the exchequer does not even get a fraction of what the personnel manning these systems allegedly pocket. This frustrates honest taxpayers out of the feeling that government policy is   unfair to them.

 Bangladesh needs to overhaul its tax policy and collection system to make it fair, efficient and flawless to increase collection to its full potential and create the culture of tax payment and discourage dodging.

 Now the burden of tax payment is on a limited number of people, mostly salaried ones, and companies that cannot evade. And roughly 62 per cent of income-tax revenue comes from tax deducted at source.

 Bangladesh ought to introduce progressive taxation, as is the practice in many countries, to make collection fair and equitable to all the citizens.

 Also, the tax rates need to be brought down to encourage each and every citizen with taxable income to pay their income tax and thus widen the tax net.

 An extensive use of tax exemptions, incentives and special provisions also limited revenue collection, narrowed the tax base, eroded tax equity and created distortions in the economy. The extensive use of the so-called 'infant-industry theory' also made many entrepreneurs in this country lazy to stay away from global competition.

The NBR needs to be modernised and equipped with information communications technology to gather flawless information to assess individuals' or organisations' tax liabilities. Economists find it shocking that only 10 million people pay taxes or at the most 25 per cent of 40 million taxable people pay tax in Bangladesh to make it one of the lowest tax-GDP ratios in the region.

During 2015-2019, the tax-GDP ratio was around 9.90 per cent on average, far below the developing-country average of 25.60 per cent.

 A big flaw is that 98.68 per cent traders in Dhaka do not pay value- added tax and over 85 per cent do not even have business- identification numbers, investigations by the VAT intelligence wing of the National Board of Revenue found out.

 During a survey done in recent months, NBR's VAT Audit, Intelligence and Investigation Directorate found that only 175 out of 13,245 traders at Pink City Market, Mouchak Market, Rajdhani Market, New Rajdhani Market, Chawkbazar, Armanitola, Bangshal and Sutrapur in the capital city had submitted VAT returns and only 1,937 traders had VAT-registration numbers.

 The survey also found that no traders at Mimi Supermarket in Chattogram submitted VAT returns and only 22 per cent of them had VAT-registration numbers, though the law has made VAT registration and return submission mandatory for businesses with an annual turnover exceeding Tk 3.0 crore.

 The law makes it mandatory for traders with annual turnover between Tk 50 lakh and Tk 3.0 crore to file their VAT returns every month with detailed information of sales and VAT deduction. 

 Bangladesh's personal income tax collection dropped to 25 per cent from 30 per cent, corporate tax to 25 per cent from 32 per cent but sales-tax collection remained static at 15 per cent. It's pointer to the inherent flaws with the system needing a thorough overhaul.

 Customs duties, value-added tax, supplementary duty, income tax and corporate tax continue to be the principal tax-collection sources for Bangladesh. 

 The Finance Bill 2017 made no changes to tax holidays for various categories of industries in export-processing zones and economic zones depending on location, coal-based and non-coal-based private power-generation companies.

 Tax holiday, until 2024, for companies providing information technology-based services also remained unchanged, though the Finance Bill 2017 specifically defines these services.

 In the early days of Roman Republic public taxes consisted of assessments on wealth and property. For Roman citizens, the tax rate under normal circumstances was one per cent of property value, and could be as high as three per cent during war.

 In India, Dahsala system was introduced in 1580 by Akbar's finance minister Todar Mal.  Under the Dahsala system land revenue or tax would be collected on the basis of land fertility split into four categories.

 Polaj land for one crop per year was never allowed to remain fallow,  parati land for one crop every two years, cachar land for one crop every three to four years and banjar land or evacuee trust agricultural land lying barren which could be used for raising crops.

 The first modern income tax was introduced in Britain by Prime Minister William Pitt the Younger in his budget of December 1798, to pay for weapons and equipment for the French Revolutionary War.

 Pitt's new graduated  or progressive income tax began at a levy of two old pence per Pound or 1/120 on incomes over £60 and increased up to a maximum of two  Shillings or 10 per cent  on incomes of over £200. He expected to use the new income-tax system to raise £10 million, but actual receipts for 1799 were a little over £6 million.

 His progressive income tax had been levied from 1799 to 1802, when it was abolished by Henry Addington during the Peace of Amiens after Addington took over as prime minster in 1801, after Pitt's resignation over Catholic Emancipation.

 Pitt's income tax was reintroduced by Addington in 1803 when hostilities recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo.

 Under the Income Tax Act 1842, Sir Robert Peel re-introduced this system of taxation to meet budget deficits, though as a Conservative he had opposed income tax in the 1841 general election. The new income tax, based on Addington's model, was imposed on incomes above £150.

Although this measure was initially intended to be temporary, it soon became a fixture of the British taxation system. A committee was formed in 1851 under Joseph Hume to investigate the matter, but failed to reach a clear recommendation. Despite the vociferous objection, William Gladstone, Chancellor of the Exchequer from 1852, retained the progressive income tax, and he extended it to cover the costs of the Crimean War. By the 1860s, the progressive tax had become an accepted element of the English fiscal system.

In the United States, the first progressive income tax was established by the Revenue Act of 1862. The bill was signed into law by President Abraham Lincoln to replace the Revenue Act 1861, which had imposed a flat income tax of three per cent on incomes above $800.

The 16th Amendment to the United States Constitution, adopted in 1913, permitted the Congress to levy all income taxes without any apportionment requirement.

By the mid-20th century, many countries had implemented progressive income tax in some form or the other. German marginal and average income-tax rates are forms of progressive tax structure.

Progressive taxation has a direct effect on reducing income inequality and facilitating progressive government spending, including for increased social-safety nets.

If educational attainment is at the root of economic mobility, progressive tax rates on high-income groups reduce the burden on the poor, improve income inequality and ensure social justice.

 In the United States, there are seven income-tax brackets, ranging from 10 per cent to 39.6 per cent.  Canada's federal tax rates on income in 2021 vary between 15 per cent and 33 per cent on incomes.  Denmark's vary between 12.11 per cent and 24.971 per cent and Germany's personal-income-tax rates vary between 0 per cent and 45 per cent, Sweden's between 0 per cent and 25 per cent while the UK's between 0 per cent and 46 per cent, and New Zealand's between 0 per cent 45 per cent.

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লকডাউনের ক্ষতি পোষাতে ভ্যাট, ট্যাক্স, লাইসেন্স ফি মওকুফ চান বিনোদন পার্ক মালিকরা

Published:  August 29, 2021 21:00:01 | Updated:  August 30, 2021 16:26:05


করোনাভাইরাসের মহামারি ও লকডাউনের ক্ষতি পোষাতে কয়েক বছরের জন্য ভ্যাট, ট্যাক্সসহ সব ধরনের শুল্ক ও লাইসেন্স ফি মওকুফ চান বিনোদন পার্ক মালিকরা।

সম্প্রতি বেসামরিক বিমান পরিবহন ও পর্যটন প্রতিমন্ত্রী মাহবুব আলীর সঙ্গে দেখা করে এসব দাবি উত্থাপান করেন বাংলাদেশ অ্যাসোসিয়েশন অব এমিউজম্যান্ট পার্কস অ্যান্ড অ্যাট্রাকশনস (বাপা) নেতারা এসব দাবি জানান।

১১ অগাস্ট থেকে ধীরে ধীরে বিধিনিষেধ শিথিল হওয়ার এক সপ্তাহ পর বিনোদন কেন্দ্রগুলো খুলেছে ।

গত ২৫ অগাস্ট নতুন স্বাভাবিকতায় বিনোদনকেন্দ্রগুলোর সার্বিক পরিস্থিতি ও স্বাস্থ্যবিধি পরিপালন সম্পর্কে মন্ত্রণালয়কে জানাতে যান অ্যাসোসিয়েশনের নেতারা, খবর বিডিনিউজ টোয়েন্টিফোর ডটকমের।

বাপার সভাপতি শাহরিয়ার কামাল বর্তমান প্রক্ষাপটে বাংলাদেশ ট্যুরিজম বোর্ডের এসওপি ও সব স্বাস্থ্যবিধি মেনে কিভাবে পার্ক পরিচালনা করা হচ্ছে যে ব্যাপারে প্রতিমন্ত্রী মাহবুব আলীকে অবহিত করেন।

এ সময় প্রতিমন্ত্রী বলেন, যেহেতু এই খাতে প্রচুর বিনিয়োগ রয়েছে এবং অনেক কর্মসংস্থান হয়েছে সেজন্য বর্তমান সরকার এই খাতটির ব্যাপারে খুবই আশাবাদী এবং যেকোনো ধরনের সহযোগিতা করবে।

বাপার এক সংবাদ বিজ্ঞপ্তিতে বলা হয়, এসময় অ্যাসোসিয়েশন নেতারা প্রতিমন্ত্রীর কাছে বেশ কিছু দাবি উত্থাপন করেন।

এর অন্যতম হচ্ছে-

বিনোদন পার্ক/থিম পার্কগুলো পর্যটন শিল্পের অন্তর্ভুক্ত হওয়ায় এই খাতটিকে শিল্প হিসাবে ঘোষিত সুযোগ সুবিধা পাওয়ার ব্যবস্থা করা।

আগামী ৩ বছরের জন্য বিনোদন পার্ক এর উপর কর্পোরেট ট্যাক্স, ভ্যাট ও সম্পূরক শুল্কসহ অন্যান্য কর মওকুপ করা যাতে অপেক্ষাকৃত কম মূল্যে পর্যটক ও দর্শনার্থীদের বিনোদন সেবা দেওয়া।

বিনোদন পার্কগুলো টিকিয়ে রাখার স্বার্থে সরকার ঘোষিত বিভিন্ন প্রণোদনা প্যাকেজের আওতায় বিনোদন পার্কগুলো অন্তর্ভূক্ত করা।

আগামী ৩ বছর নতুন বিনোদন পার্ক নির্মাণ ও বর্তমান স্থাপনার সংযোজনার জন্য আমদানি করা বিভিন্ন রাইডসহ অন্যান্য যন্ত্রপাতিতে মূসক ও শুল্ক কর মুক্ত আমদানির সুযোগ প্রদান।

ভবিষ্যতে করোনাভাইরাস রোধে অন্যান্য অনিয়ন্ত্রিত পর্যটন স্থানের (যেমন: কক্সবাজার, কুয়াকাটা, রাঙামাটি) সাথে তুলনা করে বিনোদন পার্কগুলোকে বন্ধ না করে দেওয়ার পদক্ষেপ নেওয়া।

অগ্রাধিকার ভিত্তিতে বিনোদন পার্কগুলোতে কর্মরত কর্মকর্তা-কর্মচারীদের জন্য কোভিড টিকার ব্যবস্থা করা।

গত ২ বছরের ধরে বন্ধ থাকায় এই খাতের কর্মচারী-কর্মকর্তারা মানবেতর জীবন যাপন করেছে, তাই ক্ষতিগ্রস্ত শ্রমিক, কর্মচারী ও কর্মকর্তাদের আর্থিক অনুদান দেওয়া।

আগামী ৩ বছরের জন্য সমস্ত লাইসেন্স ফি মওকুফ করা।

গত ২ বছরের যে সময়গুলো বিনোদন পার্কগুলো বন্ধ ছিল সেসব মাসের বিদ্যুৎ বিল মওকুপ করা।

প্রস্তাবনাগুলো বিবেচনা করা হবে বলে প্রতিমন্ত্রী আশ্বাস দেন বলে বিজ্ঞপ্তিতে জানানো হয়।

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64 types of commodities will be rapidly released from ports to steady supply chain

 FE REPORT | Published:  August 31, 2021 08:17:15 | Updated:  August 31, 2021 08:41:29


Some 64 types of import and export goods, including a slew of edible items, will get a speedy release from ports under a maiden decree meant for the steadying supply chain.

Bangladesh customs has listed these commodities to be placed under the perishable category deserving rapid port release for priority marketing, officials said.

Those products will be released within 48 hours of the bill-of-entry submission to the customs authority after its assessment.

To this effect, the National Board of Revenue (NBR) has issued 'Speedy disposal and Release of Perishable Goods Rules-2021', with effect from August 11, 2021.

Customs officials said they had issued the rules to resolve complexities over the release of perishable goods from ports keeping their quality and quantity unchanged.

Importers, exporters, or other agents have to submit attested copies of import-export documents with the bill of entry to take delivery of the consignments.

"In case of non-intrusive or physical inspection, the customs authority would have to submit the inspection report (expeditiously) within 24 hours," it is stated in the rules.

Each of the customs houses will dedicate a group of officials or a section to the speedy release of these goods.

However, the 48 hours' time for the release of the designated perishables will not be applicable in case of revenue arrears or other changes by the importers or exporters.

Importers, exporters, or other agents have to furnish 'specialised certificate', if need be, to get speedy release of their products from ports.

Bangladesh Standards and Testing Institution, Bangladesh Atomic Energy Commission, Bangladesh Council for Scientific and Industrial Research, plant quarantine department and fish quarantine department issue such specialized certificate for some import or export products.

In case of false declaration on perishable products or delay in releasing products causing its damage, the customs authority would put them on auction within the shortest possible time.

Highly perishable goods such as sugar and salt that cannot be put on auction for any reason could be handed over or sold to the Trading Corporation of Bangladesh (TCB) by fixing a price.

In case of not having any disputes, the auction has to be completed within 48 hours after handover to a management committee of such goods.

The rules allow an aggrieved person to lodge appeal or respond to show-cause notices from the customs.

The perishables listed under the rules are: edible oils, tea leaf, coffee, medicine (with six months' date of expiry), raw materials of drugs, cosmetics, foods items, raisins, soyaberi D, sugar candy, tamarinds, fresh and frozen vegetables, raw turmeric, ginger, chili, garlic, onions, mushroom, betel leaf, rawhide, fertilizer, nuts, gur, butter oil, ghee, coconut, betel nut, frozen and salted fish, frozen and processed meat, dry fish, pickles, chanachur, noodles, chips, vermicelli, biscuits, chocolates, chicken, duck or other birds' eggs, milk and milk products, testing salt, normal salt, beat salt, sugar, chickpeas, lentils, food-grains, potato seeds, oilseeds, tobacco (unprocessed), dates, fresh fruits, palm, raw rubber, fresh capsicum and flower, mushroom, living plants, seedlings, yeast, fish fry, live fish, chicken, duck, birds or animals etc.

The new set of rules, first of its kind, has been prepared following recommendations from stakeholders, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Chittagong Chamber of Commerce and Industry (CCCI), the Federation of Bangladesh Customs Clearing and Forwarding Agents Associations, Port Authorities across the country, and managing director of Biman Bangladesh airlines.

The NBR drafted the rules as per condition of the Trade Facilitation Agreement of the World Trade Organisation to facilitate 'ease of doing business'.

As per WTO-TFA, customs authorities should ensure fast-track clearance of perishable goods.

Importers and clearing-forwarding agents hailed the new rules with the hope for easing of procedural delays in release of these goods-mostly daily necessaries.

A C&F agent, Md Feroz Alam, says release of perishable goods often faced unusual delay in ports in the absence of any specific rules for the customs.

"Sometimes, importers have to count store rent even for the products under zero duty," he said in appreciating this one of ease-of-doing-business measures.

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অবশেষে ভ্যাট ফাঁকির টাকা জমা দিলো আলেশা মার্ট

 ট্রিবিউন ডেস্ক

 প্রকাশিত ০৬:৪৩ সন্ধ্যা আগস্ট ৩১, ২০২১


গত ৮ জুন ই-কমার্স প্রতিষ্ঠান আলেশা মার্টে অভিযান চালিয়ে ৫২ লাখ টাকার ভ্যাট ফাঁকি উদঘাটন করেন ভ্যাট গোয়েন্দারা

ভ্যাট ফাঁকি বাবদ ৫২ লাখ টাকা পরিশোধ করেছে  ই-কমার্স প্রতিষ্ঠান আলেশা মার্ট। মঙ্গলবার (৩১ আগস্ট) এক সংবাদ বিজ্ঞপ্তিতে এ তথ্য জানিয়েছে ভ্যাট নিরীক্ষা গোয়েন্দা ও তদন্ত অধিদপ্তর। 

বিজ্ঞপ্তিতে বলা হয়েছে, রাজধানীর বনানীর কামাল আতাতুর্কে অবস্থিত ই-কমার্স প্রতিষ্ঠান আলেশা মার্টে অভিযান চালিয়ে ৫২ লাখ টাকার ভ্যাট ফাঁকি উদঘাটন করেন ভ্যাট গোয়েন্দারা। গত ৮ জুন অভিযানটি পরিচালনা করা হয়।

অভিযানে ভ্যাট গোয়েন্দা দেখতে পায়, প্রতিষ্ঠানটি চলতি বছরের ১ জানুয়ারি থেকে ৩১ মে পর্যন্ত পাঁচ মাসে মোট ১৮১ কোটি ৭৬ লাখ ৬১ হাজার ৮৬৮ টাকার পণ্য বিক্রি করে। এ ক্ষেত্রে কমিশন বাবদ নিয়েছে ৬ কোটি ৪৮ লাখ ৭৪ হাজার ৪৭১ টাকা। যার বিপরীত ৫ শতাংশ হিসাবে প্রযোজ্য ভ্যাট ৩২ লাখ ৪৩ হাজার ৭২৪ টাকা। অনলাইনে সেবাদাতা প্রতিষ্ঠান হিসেবে সরকারি কোষাগারে এ অর্থ জমা প্রদানের বাধ্যবাধকতা থাকলেও প্রতিষ্ঠানটি তা করেনি।

এছাড়াও অনুসন্ধানে লিমিটেড কোম্পানি হিসেবে উল্লেখিত সময়ে বিভিন্ন কেনাকাটার ওপর উৎসে ভ্যাট বাবদ ১৯ লাখ ৮৫ হাজার ৪৩৬ টাকার ফাঁকি ধরা পড়ে। এভাবে ৫ মাসে কমিশনের ওপর প্রযোজ্য ভ্যাট ও উৎসে ভ্যাট বাবদ মোট ৫২ লাখ ২৯ হাজার ১৬০ টাকার ফাঁকি উদঘাটন করে ভ্যাট গোয়েন্দা।

ভ্যাট গোয়েন্দা দপ্তরে অনুষ্ঠিত শুনানিতে আলেশা মার্টের বিরুদ্ধে উত্থাপিত ভ্যাট ফাঁকির অভিযোগ মেনে নেয় প্রতিষ্ঠানটি। পরবর্তীতে স্বেচ্ছায় ও স্বপ্রণোদিত হয়ে সরকারি কোষাগারে ভ্যাট ফাঁকির ৫২ লাখ টাকা পরিশোধ করে লিখিতভাবে ভ্যাট গোয়েন্দা কর্তৃপক্ষকে জানিয়েছে আলেশা মার্ট।

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Financial year starts with a huge deficit in revenue collection

 Tribune Report

 Published at 08:04 pm August 31st, 2021

The collection in July, the first month of the fiscal year, was more than Tk7,000 crore short of its target

The National Board of Revenue (NBR) has started the financial year with a huge deficit in its revenue collection. 

The collection in July, the first month of the fiscal year, was more than Tk7,000 crore short of its target.

According to the statistics, the NBR has faced a huge deficit in the VAT and customs sector despite the positive growth in the income tax sector.

Against the total revenue collection target of Tk21,061.40 crore in July, Tk13,833.65 crore has been collected. The deficit is Tk7,227.75 crore.


This information came from the provisional accounts data obtained from NBR sources. 

“The revenue collection usually remains a little less in the first month of the financial year. Moreover, the work of data collection is not over yet,” the source said, adding that this information is still being updated. 

“After the final revenue account is finalised, the NBR chairman will inform about this on September 5 at 11am,” the source further said.

According to the latest provisional accounts of the NBR, the collection in the areas of income tax, VAT and customs was TK4,732.9 crore, Tk4,232.80 crore and Tk4,866.76 crore respectively in the first month (July) of the fiscal year 2021-22.

However, the revenue collection target of NBR from income tax, VAT and customs sector was Tk5,925.40 crore, Tk 7,680 crore and Tk7,456 crore respectively.

The negative growth in VAT and customs collection is 34.75% and 2.97% compared to the last fiscal year 2020-21. The deficit is Tk3,445.20 crore and Tk2,589.24 crore respectively.

In the budget of the 2021-22 financial year, the target of total revenue income is set at Tk3,79,000 crore. NBR has set a target of Tk3,30,000 crore.

The highest targets are Tk1,28,873 crore from VAT, Tk1,05,475 crore from income tax and travel tax and Tk95,652 crore from import duty.

Earlier, the NBR had also ended the 2020-21 FY with a revenue deficit of Tk41,118.20 crore.

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