Sohel Parvez

Until the current fiscal year, a bank account-holder requires paying a 10 per cent withholding tax on the interest earnings on deposits if the individual furnishes banks with the taxpayer identification number (TIN).

The production cost of steel makers in Bangladesh is going to increase as the revenue authority seeks to hike the value-added tax on rod and other steel products by up to 20 per cent, two leading producers said yesterday.

The government has cut its target on food distribution, which supports poor and low-income people, by 5 per cent to 30.95 lakh tonnes in the next fiscal year from the revised budget of 2021-22, finance ministry documents showed.

People will require to submit the proof of submission of their income tax returns in order to get more than 40 types of services, including loans and trade licence, as the National Board of Revenue looks to raise more taxes.

Over the last couple of months, various sections of society called upon the government to raise the tax-free income limit amid the rising cost of living.

From the next fiscal year, the tax authority is going to introduce a provision of disconnecting utility services of taxpayers for their failure to pay undisputed revenue demand of the government.

In the proposed tax measures, the tax authority wants to impose 50 per cent tax on the interest earnings if the account holder fails to submit proof of submission of tax returns.

Global tech giants such as Google and Facebook are likely to come under the tax net from the next fiscal year as the authorities plan to make submission of returns mandatory for the firms that have no physical presence in Bangladesh but are doing business here.

In the wake of surging production costs resulting from high feed prices, the appetite for farming to produce chicken meat is waning among farmers as the demand for chicks declined, poultry industry operators said yesterday.

Coronavirus infections have declined significantly. But the world is yet to fully recover from the health crisis. Recently, the war in Ukraine has created worries of a global food crisis and fears of a recession in major economies as inflation rages.

Exporters of all sectors will likely get corporate tax rates equal to that of garment exporters from the next fiscal year, said officials of the finance ministry, which plans to encourage the diversification of Bangladesh’s export basket by affording this benefit.

On April 5, the revenue authorities held a draw of the lottery of sales receipts issued by the stores using electronic fiscal devices (EFDs).

The National Board of Revenue should accelerate the use of electronic fiscal devices (EFDs) and ramp up monitoring to eliminate non-compliance with a view to raising more value-added taxes using technologies, said former top taxmen and economists.

Bangladesh may find it difficult to avoid the middle-income trap and become a high-income country if it can’t bring in the second generation of policy reforms and focus on the quality of macroeconomic management, said Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue.

Bangladesh’s budget as a percentage of national income has been falling consistently for the last four years although the economy has grown, reflecting its inability to generate enough revenue and spend enough on social sectors.

The government is likely to keep the tax-free income limit unchanged for fiscal year 2022-23 in order to expand the tax net, said officials of the finance ministry.

Bangladesh is likely to buy the bulk of its muriate of potash (MOP) from Canada and other countries to meet its requirement for 7.5 lakh tonnes of the chemical fertiliser to produce rice and other crops for the next fiscal year, said officials of the agriculture ministry yesterday, dispelling concerns of a shortage due to the war in Ukraine.

For the first time, home textile has emerged as the second largest export earning sector after garments as demand remains buoyant in major markets, particularly Europe, according to exporters. Exporters fetched $1.3 billion from shipping home textiles in the July-April period of the current fiscal year, posting 39 per cent year-on-year growth. Receipts from shipments of home textile items such as bed sheets, pillow covers, curtains and cushion covers were higher than export receipts from agricultural products as well as leather and leather goods during the period. Home textile exports were 28 per cent higher than its nearest peer, agricultural products, namely dry foods, vegetables, tobacco and spices. Jute and jute goods, which topped the export basket as the second biggest earning source in fiscal year 2020-21, fell to fifth place in the face of falling demand for jute yarn, twine, sacks and bags, according to the Export Promotion Bureau (EPB). “We have been registering increasing demand for home textiles from the last fiscal year as people stayed home as a part of coronavirus containment measures,” said Shahidullah Chowdhury, executive director of Noman Group, the main exporter of home textile. It exports $27 million worth of home textiles each month. “Our main markets are Europe, Canada, the United Kingdom and Japan. However, our exports are increasing in new markets such as Australia,” he added. The sector first crossed the $1 billion mark in fiscal 2020-21 thanks to a 49 per cent year-on-year hike in export earnings, driven mainly by higher costs and prices of raw cotton and other materials. Export earnings were only 3 per cent of the total receipts of $38.75 billion for that year with garments accounting for 81 per cent, according to the EPB. “Definitely the volume of exports has increased too,” said Abul Basar, general manager of human resource, admin and compliance of Momtex Expo Ltd, another major exporter. He said Bangladesh can offer competitive prices as labour costs here are the cheapest. Labour cost has increased in China, which once dominated the home textile market. Political uncertainty in Pakistan has also discouraged buyers from placing orders there, Bashar said. “So, the increased order flow is likely to sustain,” he added. Harun-Ar-Rashid, managing director of Apex Weaving and Finishing Mills Ltd, said nearly 10 textile mills export home textile products from Bangladesh and the export volume is not that high. Bangladesh only has a 7 per cent share in the global home textile export market. He went on to say that demand may decline due to a yarn shortage and the ongoing war in Ukraine. Noman Group’s Chowdhury said exports would grow if the government provides policy support. Increasing the cash incentive for exports to 10 per cent from the present 4 per cent and reducing congestion at ports will be instrumental for increasing export earnings from home textiles. “We have political stability now but what we need is policy stability,” he added.

When his children ask Russel Shaikh why there is no meat and even fish in their meals, he has no answer. This is because he simply has no choice as soaring prices of essential commodities and the rising cost of living have hit hard the pockets of the low-income people like him.

The National Board of Revenue (NBR) has been failing to achieve tax collection targets since the fiscal year of 2012-13 because of lofty goals set by the government and the absence of major reforms.