Morning Newsflash Wednesday, April 17, 2019

Transcription

1 Economy Corporate tax: Bangladeshi entrepreneurs pay highest in South Asia Bangladeshi entrepreneurs pay the highest corporate tax among the South Asian counties, which they point out as an impediment in the way of attracting new investments. As per direction of the current budget, a company doing business in Bangladesh has to pay 35% corporate tax, which is 25% for a publicly traded company while the maximum rate extends up to 45% for some sectors. Businesses in other South Asian countries are paying corporate tax ranging between 6% and 15% whereas Bangladesh s corporate tax rate is higher than the global average as well as the Asian average rate. According to Tax Foundation data, a Washington-based think tank on US tax policies, the worldwide average statutory corporate income tax rate, measured across 208 jurisdictions, is 23.03% and the Asian average corporate tax rate is 20.65%. Vietnamese entrepreneurs pay 20% corporate tax while it is 24% in Malaysia, 25% in China, 25% in Indonesia, 25% in Myanmar, 29% in Pakistan, 30% in India and 30% in Philippines, according to data of Dhaka Chamber of Commerce and Industry (DCCI). By reducing corporate tax rates gradually, Bangladesh can attract more investment from home and abroad, which will generate more employment, think business insiders. According to a research of ABE, if corporate tax is reduced by 10%, it will increase investment worth 2% of the gross domestic product (GDP) of a country. Economy Respondents give mixed reaction Tax officials declined to accept relevant papers from some 43 per cent of large VAT (value added tax) payers, a survey of the revenue board has revealed. The papers that the tax payers produced were related to their VAT payments. It also found 39.1 per cent of large businesses went through 'red tape' in the form of procedural repetition while submitting VAT returns. However, more than 66 per cent of the respondents expressed satisfaction over the performance of officials and staff members at VAT offices. A survey report styled 'Taxpayers' satisfaction under VAT and Supplementary Duty Act (VAT online project) implementation project' was released by the National Board of Revenue (NBR). The Conjuratio Bangladesh Limited has prepared the report under the guidance of Prof Quamrul Ahsan Chowdhury of sociology at Dhaka University. "Respondents faced multiple problems while submitting tax returns under the Large Taxpayers Unit (LTU)," according to the report. "The most painstaking problem that the respondents (43.2 per cent) faced was the refusal to accept the documents accompanying the tax returns," it said. For submitting tax returns under the LTU, businesses face procedural repetitions in the system

2 Economy Two-thirds of eligible taxpayers evade tax, NBR boss tells seminar Chairman of National Board of Revenue (NBR) Md Mosharraf Hossain Bhuiyan said Monday less than one-third of potentially eligible taxpayers in the country pay taxes. "We've currently around 40 lakh (4.0 million) taxpayers' identification numbers (TINs). This is not even one-third of potentially eligible taxpayers," he said. The NBR chief made the comments while speaking at a lecture on VAT and Tax at Canadian University of Bangladesh in city. Speaking as the keynote speaker, the NBR chairman said retailers also evade taxes at a significant level. Mr Bhuyian said they will strengthen the tax authority hiring more manpower providing them with training and technology. "We will strengthen the NBR at a level so that nobody can evade taxes in the country," he said. The NBR chief noted that private university students should pay VAT to the national exchequer. Banks & NBFIs BB data server at high risk of cyber attack The data server of the central bank is found to be at high risk of a cyber attack as hackers have reportedly again installed malware there, officials have said. Malware in the central server of the Bangladesh Bank (BB) creates scope for hacker intrusion and stealing money by placing fraudulent orders, they added. In March, the Bangladesh Computer Council (BCC) monitored the server for 21 days and found it to be at "high risk" of compromising, the officials stated. In 2016, for the first time in the country's history, cyber frauds stole $101 million from the BB's account with the New York Fed by accessing its network. The BB sued Manila-based Rizal Commercial Banking Corporation (RCBC) this February to recover the heist funds. According to sources, the BCC installed a cyber sensor at the data centre under a memorandum of understanding (MoU) to monitor any possible cyber attacks. Reviewing the information received between March 11 and March 31, computer systems analysts of the council found the presence of malware in the BB's network. Capital Market Stocks drop to five-month low Dhaka stocks sank deeper into the red yesterday, hitting a five-month low and eliciting angry calls for resignation of the stock market watchdog's chief from anguished investors. DSEX, the benchmark index of the Dhaka Stock Exchange, plummeted points, or 1.14 percent, to finish the day at 5,249. In the last one month, investors saw their shares' value erode by Tk 22,486 crore. Desperate, investors demonstrated in front of the DSE office yesterday and demanded resignation of M Khairul Hossain, the longest-serving chairman of the Bangladesh Securities and Exchange Commission, within 48 hours. Otherwise, they will go for tough movement. In his eightyear-long tenure, Hossain failed to boost investor confidence and bring quality stocks to the market, they said. Investors urged the authorities to compel sponsors of companies whose stock prices have plunged below the issue price to buy back their shares. They also demanded 90 percent of net income as dividend if the companies do not go for further investment.

3 Capital Market TIN not mandatory for BO accounts: NBR The tax authority has not made opening taxpayer identification number (TIN) mandatory for stock investors, allaying the fears of general investors. Following the media reports earlier this month about TIN becoming compulsory for investing in the capital market, the Dhaka Stock Exchange plunged to its three-month low on April 3 as general investors panic sold. Investors would be able to open beneficiary owner's (BO) accounts as they could in the past. No new rule has been framed making TIN compulsory, said the National Board of Revenue in a press statement yesterday. The NBR also said it is holding consultation meeting with stakeholders ahead of framing tax proposals for fiscal As part of the consultation, the NBR recently sat with representatives of the DSE and the Bangladesh Insurance Association (BIA). At the meeting, the DSE, responding to a question from the NBR chairman, said those who have BO accounts have TINs, while representatives from the BIA informed that TIN is compulsory for opening insurance policy. Later, it was published in the newspaper that TIN is being made mandatory for stock investors. Fuel & Power Doreen Power acquires 99.90pc shares of Chandpur Power The board of Directors of Doreen Power Generations and Systems Limited in its board meeting held recently has decided to acquire per cent shares of Chandpur Power Generations Limited. The company had 60 per cent ownership before this decision, said a statement. The board of directors has adopted un-audited financial statements for the third quarter ended on 31 March Consolidated EPS was Tk for January-March 2019 as against Tk.1.72 for January-March 2018 and consolidated EPS was Tk for July 2018-March 2019 as against Tk for July 2017-March Consolidated NOCFPS was Tk for July 2018-March 2019 as against Tk for July 2017-March Consolidated NAV per share was Tk as on 31 March 2019 and Tk as on 30 June Due to lower demand of electricity in national grid, both production and supply of electricity have reduced phases for implementing 5G in Bangladesh Telecommunication 5G can be implemented in Bangladesh in 3 phases and government would have to ensure policy support for this, the infrastructure supporting organisations have said. After launch of 4G service, government has planned to rollout the 5th generation (5G) service by 2020 in Bangladesh to get better connectivity with the capacity of a high volume of data. Posts Telecommunications and ICT Minister Mustafa Jubbar said, We are ready to provide all kinds of policy support but the mobile phone operators will have to ensure quality of services. The infrastructure and supplier company Huawei advised to implement 5G service in Bangladesh in 3 phases. From 2020 to 2021, 4G and 5G will be home broadband (HBB) in 50 per cent of the city s high-value area. During that time, the download speed will be 100 Mbps and uplink 5mbps. Bangladesh will enjoy enterprise internet access system from 2022 to 2002 in the second phase. In this period, the high traffic areas of the internet will be affordable for 5G-enabled handsets. The download speed will be 300 MBps, upload will be 50 Mbps. The third step would be taken in

4 Telecommunication BTRC audit claim unfounded: GP Grameenphone yesterday demanded that the telecom regulator withdraw its recent claim of Tk 12, crore from the operator, terming the unpaid amount unearthed by audit as unfounded and without any legal basis. Earlier on April 2, the Bangladesh Telecommunication Regulatory Commission (BTRC) issued a demand letter against Grameenphone claiming Tk 8, crore and another Tk 4, crore for the National Board of Revenue, to be paid within 10 working days. The claim came after the information and systems audit, conducted by Toha Khan Zaman & Co., on the country's leading operator's books from its inception in 1997 until June Originally, following the audit report the government last year claimed Tk 11, crore -- an amount that was disputed by Grameenphone. The operator requested the BTRC to revisit the figures once again, which the telecom watchdog agreed to. In the revision, the principal amount declined by about Tk 15 crore. Since more time has elapsed the interest on the principal amount has increased and hence the higher amount, according to BTRC Chairman Md Jahurul Haque. The interest amount was Tk 5, crore in the audit report placed last year. The new interest amount is Tk 6, crore IT First IPTV launches BDCOM Online Ltd has introduced IPTV (internet protocol television) service in the country, the first of its kind. The IPTV was rolled out on Pahela Baishakh, the first day of the Bengali calendar, officials of BDCOM Online told the leaders of Telecom Reporters' Network Bangladesh (TRNB) at a programme in Dhanmondi yesterday. One of the leading internet service providers in Bangladesh, the company says it has rolled out the service under its new package Broadband360. Apart from the IPTV service, BDCOM Online will also offer existing internet and voicebased internet telephony service and all these packages together will be called Triple Play Service. The speed of the package is expected to be about 100mbps, said SM Golam Faruk Alamgir Arman, managing director of the company. He says the company is offering broadband internet from the beginning and added IP telephony service in the last one decade with a market share of 60 percent. The introduction of the IPTV service came after the telecom regulator lifted the bar on the service in October last year. Broadband360 is providing services to both home users and business firms and giving safe broadband internet with parental control facilities.

5 Cut registration fees, introduce secondary market for real estate Realtors have demanded reduction in the registration fees for flat and plot, introduction of a secondary market for real estate, and restoration of the provision of whitening undisclosed money in the income tax law for this sector. They also urged the revenue authority not to impose anew or raise the ceiling of existing value added tax (VAT) on the sale of real estate. Stakeholders in the real estate sector placed their demands at a pre-budget meeting with the National Board of Revenue (NBR) at its headquarters in the city's Segunbagicha area on Tuesday. NBR Chairman Md Mosharraf Hossain Bhuiyan presided over the meeting attended by representatives of the Real Estate and Housing Association of Bangladesh (REHAB), Bangladesh Steel Manufacturers Association (BSMA), Bangladesh Cement Manufacturers Association (BCMA), Bangladesh Stainless Steel Pipe Manufacturers Association (BSSPMA). At the meeting, the REHAB proposed a cut in the registration fees to 7.0 per cent from the existing 14 to 16 per cent, saying that such fees in neighbouring countries range between 4.0 and 7.0 per cent. Real Estate Others Power looms hasten decline in number of handlooms The number of handlooms in the country has continued to decline over the years mainly due to the growing use of power looms, a census has revealed. According to the census data, the number of handlooms declined per cent to 116,006 units in 2018 from 183,512 units in 2003 and 212,421 units in In tandem with this trend, the number of workers associated with the sector also dropped by 66 per cent to 301,757 in the last year from 888,115 in 2003, according to the survey report of Bangladesh Bureau of Statistics (BBS). The report on 'Handloom Census 2018' was launched at a programme organised by the BBS at its headquarters in the city on Tuesday afternoon. Planning Minister MA Mannan attended the programme as the chief guest. Statistics and Informatics Division (SID) secretary Saurendra Nath Chakrabhartty was present on the occasion as the special guest with BBS Director General (DG) Dr Krishna Gayen in the chair. Director of the handloom census project Mohiuddin Ahmed presented the key findings of the survey. According to the report, handlooms are getting replaced by power looms across the country. International Business Jet Air faces imminent shutdown without emergency funds India's Jet Airways Ltd will be forced to shut down as soon as Wednesday if it does not get emergency funding from its lenders, two sources familiar with the situation said. Bankers and an Indian government official said lenders are scrambling to secure funds to keep the once-dominant Indian airline, whose shares earlier slumped to their lowest levels since August 2015, flying. Another source said that Jet's board authorized its chief executive Vinay Dube to go back to its main lender State Bank of India (SBI) one last time to ask for emergency funds. If we don't get funds today, the airline will have to shut down immediately, a senior company source told. Jet, which did not respond to requests for comment, saw its shares fall by as much as 18.5 percent on Tuesday after Indian media reports that its management had advised the airline's board to temporarily suspend operations. Indian business channel BTVI said that Jet's board had authorized Dube to seek a minimum of 4 billion rupees ($58 million) in interim funding.

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