No source tax on import of edible oil, rice, wheat, sugar: Bangladesh finance minister

Bangladesh finance minister Abdul Maal Abdul Muhith on June 15 made a correction to the budget document placed before the parliament on June 4 for the fiscal year 2015-2016 and said that the proposed tax at source on import of edible oil (both raw and refined), rice, broken rice, dried chilli, oil seed, wheat and sugar, both raw and refined, would not applicable.

In the original budget document, he proposed two percent source tax on import of those products earlier which were exempted from source tax.

Muhith at the parliament on June 15 termed the imposition of the tax as mistake and said that such mistakes were creating problems and instability in the domestic market.

Earlier, on June 8, the Finance Minister corrected the increase of import duty on raw and refined sugar.

In the budget document it was proposed to increase the import duty on raw sugar from Tk 2,000 to Tk 4,000 while on refined sugar to Tk 8,000 from Tk 4,500.

Bangladesh, India, Nepal and Bhutan sign cross-border vehicle agreement

Bangladesh, India, Nepal and Bhutan on June 15 signed a framework agreement titled ‘Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic’ to facilitate the movement of passenger, personal and cargo vehicles through roadways among the four countries.

Transport ministers of the four countries on the day signed the deal at meeting held in Thimpu, Bhutan.

The countries will have to sign a protocol to materialize the framework agreement before it comes into effect.

The agreement will connect the nations by roads allowing passenger, personal and cargo vehicles through their borders as a move to boost sub-regional connectivity. 

A vehicle from the countries will be allowed to travel through other signing countries by paying fees to the countries through which the vehicle will travel.  

The vehicle will need to take permits and no vehicle will be allowed to board passenger or load any goods half way to the destination in another country or to carry any illegal goods.

There is another proposal on cards signing such a deal among the member countries of the South Asian Association of Regional Cooperation allowing vehicle movements.

SAARC member states—Bangladesh, India, Pakistan, Nepal, Bhutan, Sri Lanka, Afghanistan and Maldives—are in discussion to materialse the deal but could not complete the process.

According to the four nation’s road vehicles agreement, officials authorized by the countries concerned can search or inspect the vehicles while crossing their territories.

Restriction on chartered accountants of England, Wales, London, Scotland, India, Pakistan from income tax practice in Bangladesh

The National Board of Revenue has put bar on chartered accountants and cost management accountants of 5 countries from income tax practice in the country to promote local professionals and prevent fake audit reports.
The revenue board has proposed an amendment in the Income Tax Rules-1984 putting restriction on chartered accountants and cost management accountants of India, Pakistan, England and Wales, and Scotland from providing advisory services related to income tax in Bangladesh.
Currently, along with Bangladeshi professionals, members of the Institute of Chartered Accountants in England and Wales, Scotland, India and Pakistan, the Society of Incorporated Accountants and Auditors in London, and Institutes of Cost and Management Accountants of Pakistan can practice as income tax advisors in the country.
Now, only Bangladeshi professionals will only be able to provide the services, officials of the revenue board told New Age on Thursday.
The provision has been in the law since independence of the country.
Many professionals in the sector from these countries and regions particularly from India work legally and illegally in the country taking the advantage of the rules and bringing huge amount of foreign currency from the country, they said.
On the other hand, many companies and firms are submitting fake audit reports signed by auditors from these countries to the NBR.
The revenue board cannot prevent such malpractice as it has not mechanism to check the authenticity of the reports and trace the auditors.
Members of the Institute of Chartered Accountants of Bangladesh also welcomed the move and said that it would prevent unauthorised employment in the country and save foreign currency as well as create more space for the local professionals.
They said that huge chartered accountants from these countries, particularly from India, had been legally and illegally working in the country. 
According to ICAB and the NBR people, there are more than 75,000 companies remain active in the country which needed to submit audit reports to the revenue board along with income tax returns.
Of which, more than 50,000 companies submits fake audit reports in absence of monitoring and prevention mechanism.
ICAB council member and former president Humayun Kabir told New Age that the move of the NBR would bring down, at least, legal employment of such professionals in the country and remittance outflow from the country.
No chartered accountants of Bangladesh are allowed to work in abroad without either being citizen or become member of that countries professional institutes, he said.
Currently, the number of chartered accountants in the country who are member of the ICAB is more than 15,000 and more than 100 chartered accountants are joining the workforce each year, according to the ICAB.
There are another 25,000 students are studying the professionals course under the institute.

Excise duty on air tickets increases in Bangladesh

Air travelers in Bangladesh will now have to pay more excise duty as the government has increased the duty on domestic and international air ticket prices and deposits in banks and financial institutions.
In the budget proposal for the fiscal year 2015-16 placed before the parliament on June 4, the government increased the duty amending the Excises and Salt Act-1944. The increased excise duty rates have been effective from June 4.
According to the National Board of Revenue, domestic air travelers will have to pay Tk 500 per ticket for single journey as excise duty instead of the current Tk 300.
For travelling in the South Asian Association for Regional Cooperation member countries—India, Pakistan, Nepal, Bhutan, Sri Lanka, Maldives and Afghanistan, passengers will have to pay Tk 500 per seat which was Tk 300.
Excise duty has also been increased to Tk 1,000 per air ticket for travelling to other Asian countries from the existing Tk 500 and for rest of world to Tk 1,500 per seat from Tk 1,000.
Biman Bangladesh Airlines on June 8 said that passengers who had already purchased the ticket without paying excise duty would have to pay the duty at airports before their journey.

property owners in Bangladesh under tax authority scanner

Bangladesh finance minister Abul Maal Abdul Muhith on June 8 instructed the country's tax officials to go after property owners, who were identified through survey as eligible taxpayers, in an attempt to meet the ‘ambitious’ revenue collection target set in the proposed budget for the next fiscal year 2015-2016.

At a meeting with the field level officials of the National Board of Revenue, he also asked the taxmen to expand their survey of identifying eligible taxpayers in the upazila level.

Observing that the revenue board was capable to achieve the high revenue collection target which has been set around 31 per cent higher than the current FY’s target, Muhith said that there would be a big push on the taxmen for achieving the target more efficiently and conveniently.

The NBR got a list of property owners, including house and cars, through survey in previous years in Dhaka and other big cities as eligible to pay tax but who are currently out of the tax net, Muhith told reporters at a press briefing after the meeting.

‘The number of taxpayers will be doubled if we can bring the property owners, who were identified as eligible taxpayers, under the tax net. We will hit there [property owners] this time,’ said Muhith.

Currently, there are around 11 lakh taxpayers in the country while the NBR last few years identified around 6 lakh eligible property owners and business people who do not pay taxes. The NBR has a target to find out around 2 lakh eligible taxpayers this year.

Field-level commissioners of income tax, customs and value-added tax wings and other senior officials of the revenue board attended, , among others, the meeting presided over by NBR chairman Md Nojibur Rahman.

‘Revenue collection target for the next year is undoubtedly ambitious but I think the revenue board is fully capable to achieve the target,’ Muhith said.

‘Taxmen will have to deal with the people detected as eligible taxpayers very strictly to bring them under the income tax net instead of putting extra pressure on the existing taxpayers,’ he said.

Terming the country’s upazilas vibrant in terms of economic activities, the finance minister said that there would be income tax offices in each upazila by 2018.

The government set a revenue collection target at Tk 1,76,370 crore for the next fiscal year.  

Muhith said that collection in income and corporate tax would become the number one with the target of Tk 65,932 crore in the next year in terms of total revenue collection.

The finance minister also said that value-added tax would remain in the second position in terms of revenue collection.

Though VAT in not a progressive taxation considering its equal impact on all types of taxpayers, it is a very fair tax system as VAT is imposed only on value addition, he said.

Regarding gradual decline in contribution of supplementary duty to overall revenue collection, he said that it would reduce further in coming years and by 2018 there might be no SD.

The government may also reintroduce slab-wise minimum income tax for taxpayers living in urban and rural areas following recommendations from the Cabinet.

In the budget, Muhith proposed minimum income tax at Tk 4,000 for all, scrapping the current three slabs of tax rates from Tk 3,000 to Tk 1,000 for people living in city corporations, districts headquarters and rural areas.

‘The minimum income tax may be same for taxpayers in Dhaka and Chittagong and for taxpayers in other cities, districts and upazila levels it will be slightly lower,’ he said.

Bangladesh approves a draft on four nations road transport agreement

Bangladesh cabinet, council of ministers, on June 8 approved a draft agreement on movement of passenger, personal and cargo vehicles among Bangladesh, India, Nepal and Bhutan.

The agreement titled ‘Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic’ is scheduled to be signed by road transport ministers of the four South Asian countries on June 15 in Bhutan.

The agreement will connect the nations by roads allowing passenger, personal and cargo vehicles through their borders as a move to boost sub-regional connectivity.  

The cabinet meeting chaired by prime minister Sheikh Hasina made the approval on June 8, cabinet secretary Muhammad Musharraf Hossain Bhuiyan told reporters after the meeting.  

There is another proposal on cards signing such a deal among the member countries of the South Asian Association of Regional Cooperation allowing vehicle movements.

SAARC member states—Bangladesh, India, Pakistan, Nepal, Bhutan, Sri Lanka, Afghanistan and Maldives—are in discussion to materialse the deal but could not complete the process.

According to the draft of the four nations road vehicles agreement, officials authorized by the countries concerned can search or inspect the vehicles while crossing their territories.

Vehicles will not be allowed to load any goods half way to the destination in another country or to carry any illegal goods, according to the draft. The agreement will be renewable every three years if the countries signed the deal. Signing a protocol will be needed for implementation of the agreement.

No extra duty on raw and refined sugar import: Bangladesh finance minister

Bangladesh on Sunday withdrew one of its budgetary measures in which specific customs duty on import of raw and refined sugar was increased.

Just four days after the budget proposal placed before the parliament, Bangladesh finance minister Abul Maal Abdul Muhith on June 8 said in the parliament that imposition of increased specific customs duty on raw and refined sugar had been dropped from the budget proposal.

Muhith said that the proposal had been included mistakenly in the budget speech and the Finance Bill-2015.

In the budget, the government proposed to increase the specific duty on import of raw sugar to BDT 4,000 a tonne from the current Tk 2,000 and for refined sugar, the duty will be BDT 8,000 a tonne instead of BDT 4,500.

Now, the existing duty rate will be continued as the government decided to withdraw the proposal.

New Boeing 737-800 aircraft in Biman's Dhaka-Singapore flights

Biman Bangladesh Airlines has declared to add a new Boeing 737-800 aircraft in its Dhaka-Singapore route. Biman, national flag carrier of Bangladesh, board of directors chairman Air Marshal (retd) Jamal Uddin Ahmed on June 5 made the declaration at Agent Award Night-2015 held at Hilton Hotel in Singapore. Currently, Biman Bangladesh Airlines is operating flights six days in a week Dhaka-Singapore-Dhaka routes. This route is one of the profitable venture for Biman.

Bangladesh plans to crack down on illegal foreign workers

The government of Bangladesh on June 4, in its budget proposal for the fiscal year of 2016-2016 to be started from July, 1, said that loacl companies, firms or individuals would have to pay as much as 50 per cent of their total payable income tax, or Tk 5 lakh, whichever is higher, as a fine for employing unapproved foreign nationals. 

Legal actions against the employeer will also be taken for employing foreign nationals without work permits from the Board of Investment and other competent authorities including Bangladesh Export Processing Zone Authority and NGO Affairs Bureau. 

Finance minister AMA Muhith placed the proposal before the Bangladesh parliament or Jatiyo Sangshad, related to imposition of penalty, cancellation of tax holiday and other tax exemptions facilities along with legal punishment up to three years in jail, but not less than three months. 

Bangladesh is one of the most densely populated country in the world with 160 million people suffers acute unemployment. amongest the country's eligible manpower who are desperately seeking employment even in abroad.

Though there is no clear statistic on the number of foreigners working in the country, unofficial estimates, however, vary from two lakh to five lakh foreign nationals, mainly from neighbouring India, Pakistan, China and Sri Lanka, and many from African and Western countries. 

They mainly work in Bangladesh particularly in readymade garment industry, buying houses, liaison offices of multinational companies, IT, different joint-venture companies and other manufacturing industries.

Board of Investment data shows that only around 12,000 foreign nationals are working in the country with work permits from the board. A few thousand more foreigners are working in the country with permission from the Bangladesh Export Processing Zone Authority and a few hundred with permission from the NGO Affairs Bureau.

In 2013, India’s largest circulated technology magazine Siliconindia said in a report that a total of five lakh Indians were working in Bangladesh at that time and sent $3.7 billion in remittance. Bangladesh has become the fifth highest source of annual remittance for India.

They said that most of the foreigners entered Bangladesh on tourist visas and took up jobs with cover provided by local employers.

tax at source on income of non-resident foreigners in Bangladesh

The government of Bangladesh has rationalized the income tax rate on income of non-resident foreigners including consultant, service providers, artist, player, singer and professional derived in the country to avoid complexities in deducting the tax. 

As a move to rationalize income tax to be deducted at source on income of non-residents, the government reduced the tax rate as less as 5 per cent from the current 30 per cent.  

According to the Income Tax Ordinance-1984, tax at source on income of non-resident for many services is applicable at highest rate which is now 30 per cent. 

The rationalised rates will be applicable from the next fiscal year of 2015-2016 to be started July, 1 after approval of the National Parliament, known as Jatiyo Sangshad by the end of June.

The National Board of Revenue has already proposed an amendment of the ordinance in this connection. 

The government or any person responsible for making payment to a non-resident of any amount which constitutes income of such non-resident chargeable to tax shall deduct tax on the amount at applicable rate specified in the ordinance, taxmen said. 

According to the proposal, the highest 30 per cent tax will be applicable on payment to a non-resident for advisory or consultancy service, certification, pre-shipment inspection service, on salary or remuneration and dividend to any person, not being a company and to artist, singer, player and any other payments not specified in the ordinance. 

Twenty per cent tax will be applicable on payment for accounting or tax consultancy, legal service, management or event management, professional service, advertisement broadcasting, architecture, interior design or landscape design, on charge or rent for satellite, airtime or frequency and on interest, royalty or commission and dividend to company. 

Tax at source at the rate of 15 per cent will be charged on capital gain received from capital assets (not being securities listed with stock exchange, Dhaka Stock Exchange and Chittagong Stock Exchange), on payment for advertisement making, courier service and machinery rent. 

Ten per cent tax on capital gain received by a company, or firm if such gain is arisen from securities listed with any stock exchange in Bangladesh which is not exempted from tax in the country of such non-resident, and on insurance premium. 

Tax at source, also known as tax deduction at source or TDS, at the the rate of 7.5 percent will be applicable on payment for air transport or water transport, 5.25 percent on exploration or drilling in petroleum operations, survey for oil or gas exploration and any service for making connectivity between oil or gas field and its export point and 5 per cent tax on payment to non-resident contractor, sub-contractor or supplier.     

According to the income tax law, known as Income Tax Ordinance-1984, of Bangladesh, non-resident means a person who is not a resident of Bangladesh. 

on the other hand, resident, in respect of any income year, means-(a) an individual who has been in Bangladesh for a period of, or for periods amounting in all to, one hundred and eighty two days (182 days) or more in that year, or for a period of, or periods amounting in all to, ninety days (90 days) or more in that year having previously been in Bangladesh for a period of, or periods amounting in all to, three hundred and sixty-five days (365 days) or more during four years preceding that year. 

(b) a Hindu undivided family, firm or other association of persons, the control and management of whose affairs is situated wholly or partly in Bangladesh in that year; and

(c) a Bangladeshi company or any other company the control and management of whose affairs is situated wholly in Bangladesh in that year.