Journal (April-June 2019)

Volume : XXI

Issue : 2

April-June 2019

NATIONAL

BUDGET 2019-2020

INSTITUTE OF CHARTERED SECRETARIES OF BANGLADESH (ICSB)

Institute of Chartered Secretaries of Bangladesh (ICSB) was established under an Act of Parliament i.e. Chartered Secretaries Act 2010 and is the only recognized professional body in Bangladesh to develop, promote and regulate the profession of Chartered / Company Secretaries in Bangladesh.

The Institute was initially established under a license from the Ministry of Commerce in 1997 as the Institute of Chartered Secretaries and Managers of Bangladesh (ICSMB) and subsequently was converted to Institute of Chartered Secretaries of Bangladesh (ICSB).

The affairs of the Institute of Chartered Secretaries of Bangladesh (ICSB) are managed by a Council consisting of thirteen elected members and five nominees of the Government. The President is the head of the Institute.

The major contribution of a Chartered Secretary is in the corporate sector.

Chartered Secretary is the requisite qualification to become a Company Secretary.

Company Secretary is an important professional, aiding the efficient management of the corporate sector. Company Secretary is a Statutory Officer under the Companies Act 1994. According to the Bangladesh Securities and Exchange Commission (BSEC), all the listed companies should have a Company Secretary.

Company Secretary is the compliance officer of the company, who has to interact, coordinate, integrate and cooperate with various other functional heads in a company.

THE COUNCIL 2016-2019

Mohammad Sanaullah FCS Safiar Rahman FCS Md. Selim Reza FCS Nazmul Karim FCS Mohammad Asad Ullah FCS Itrat Husain FCS Md. Shahid Farooqui FCS Md. Azizur Rahman FCS A. K. M. Mushfiqur Rahman FCS Mohammad Bul Hassan FCS Gopal Chandra Debnath FCS Md. Anwar Hossain Chowdhury FCS Salim Ahmed FCS Pranesh Ranjan Sutradhar, Additional Secretary, GoB Mohammad Manzarul Mannan, Joint Secretary, GoB Dr. Mohammad Mohiuddin, Joint Secretary, GoB Khandaker Kamaluzzaman, Commissioner, BSEC Md. Zakir Hossain, Registrar, Additional Secretary, RJSC, GoB

EDITORIAL BOARD

Editor Prof. Dr. Feroz I. Faruque FCS Members Itrat Husain FCS Md. Bazlur Rahman Sikder FCS Kazi Ashiqur Rahman FCS Subash Chandra Moulick FCS Mohammad Shahajahan FCS Md. Shiful Islam FCS

SUBSCRIPTION RATE

For Students Others

Design & Print

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: per copy Tk. 100; per year Tk. 350 : per copy Tk. 150; per year Tk. 560

President Senior Vice President Vice President Treasurer Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor Councilor

IN THIS ISSUE

Editorial

3

The Council 2016-2019

4

Message from the President

5

Institute News

8

ARTICLES TID BITS of National Budget 2019-2020- Few Compassionate, Compulsive & Repulsive Issues -Prof. Dr. Feroz Iqbal Faruque FCS

25

Retrospective Tax Laws and unpredictability of Tax System of Bangladesh -Kazi Ashiqur Rahman FCS

29

Budget 2019-20 : New Directions are Surging Ahead -Bipul Kumar Bhowmik FCS

PUBLISHED BY Institute of Chartered Secretaries of Bangladesh (ICSB)

(Established under Chartered Secretaries Act 2010 (Act No. 25 of 2010)

The views and opinions expressed in the articles published in this Journal are those of the writers only.

ADMINISTRATIVE MINISTRY Ministry of Commerce Government of the People’s Republic of Bangladesh INSTITUTE OFFICE Padma Life Tower (8th Floor) 115 Kazi Nazrul Islam Avenue Bangla Motor, GPO Box No. 3100 Dhaka-1000, Bangladesh Phone : +88 02 933 9957, 933 4878, 933 6972, 4831 5338 +88 02 4934 9578, 933 6901 (Extn.-101-108) Fax : +88 02 933 9957 Mobile : 01708 030804 E-mail : secretary@icsb.edu.bd, icsb@icsb.edu.bd Web : www.icsb.edu.bd CAMPUS Padma Life Tower (7th Floor) 115 Kazi Nazrul Islam Avenue Bangla Motor, Dhaka-1000 Bangladesh

31

The National Budget of FY 2019-20: Big Budget for Big Achievement -Mohammad Shahajahan FCS

33

Budget 2019-20: Reforms in Banking Sector -Syed Mahmud Hasan ACS

36

Bangladesh National Budget analysis and major Economic Challenges for FY2019-2020 -Md. Mizanur Rahman QCS

38

NOTIFICATIONS

42

EDITORIAL

this issue...

GDP GROWTH THROUGH FINANCIAL DISCIPLINE

D

arch 2019

January-M

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vernance rporate Go ble ICSB's Co Sustaina e Award-A tive (SGI) Excellenc tia Ini e nc Governa

R CE R CE FO EN FO EN ED LL al PIR CEIRED LL CE INS EX 19 on T ING SP EX 20 ati GE RN T IN G D IN er, Intern AN VE E GOD GE RN mb u ICC) a PIR ING VE veandhr (B ak Dh No INS OT E ANGO 30 ab nte r, OM IR G y, ng CeNaga PR SP IN

IN OT ursdall, Ba ce gla OM Th y Hanferen an rit Co er-e-B leb Sh Ce

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uring the current FY GDP growth has been estimated at 8.13 percent. Consumption, investment, government expenditure, exports increase indicate an upward trend in GDP. SMEs are one of the driving sectors of GDP in any country of the world, either developed or developing country. Fourteen mega projects are in the implementation stage of course. As per capita income has increased naturally per capita consumption has also increased.

Remittance income has increased by US$ 1.2 billion in the 2018-19 FY compared to the last FY. Naturally consumption has also increased proportionately. Export has increased by 12.57% compared to the 6.33% last FY. Efficiency has significantly increased through digitalization of the country. With all these positive signs we need to have answer about significantly increase of unemployment mainly among the educated fellows.

The answer may be more than one, non productive and seriously low quality education.

We need to examine the capital market situation in the country. First of all, lack of awareness and education and reluctance to give importance on it by the investors should be ranked top. simultaneously our share market

dealers are mostly traders, very few are investors. They want to make high profit in a very short span of time as the motive is to get rich quick. They do not want to invest and wait for a reasonable period which is lacking in our share traders investment rather trading character. There are many weak, fragile and unreliable fundamentals such financial statements, knowledge required for share trading/investment, economic sectoral knowledge, lack of specialization, know all business attitude. Rumor mongers siphoned about Tk. 25,000 crore in last three years. Recently investors lost about Tk. 5,000 crore in a single day. Large scale awareness along with timely and competitive education and research are badly necessary. Banking sector is in a total mess; same with share market. Loan defaulters are getting benefits for 10 years by payment of 2% of the accrued interest. So the question remains where the economy and GDP is heading to? We hope that remedial steps will be taken by the government so that the estimated GDP growth rate of 8.13 percent can be achieved.

Prof. Dr. Feroz I. Faruque FCS Editor

April-June 2019 | 3

Mohammad Manzarul Mannan Joint Secretary, GoB

Councilor Dr. Mohammad Mohiuddin Joint Secretary, GoB

Secretary in Charge to the Council

Md. Shamibur Rahman ACS

4 | April-June 2019

MESSAGE FROM THE PRESIDENT

D

ear Professional Colleagues,

It is indeed a great pleasure for me to inform you that the tenure of the present Council is going to end on October 4, 2019. This would be the last message from my end to you as the President of the Institute.

Now, it is that time when the baton is to be passed on to the next Council, seamlessly and successfully In Shah Allah. The Council in its meeting held on June 16, 2019 formed an Election Commission to conduct the 4th Council Election on September 28, 2019. Election Tribunal has also been formed in this regard. The Election Commission has already declared the 4th Council Election schedule.

It is truly hard to believe how quickly a three-year term has passed and I am writing this message in a transition period as we prepare for a transition to the 4th Council which will be elected on September 28, 2019. It was certainly a busy and challenging period. It has been an exciting, and a lot of hard work, but I have enjoyed my time serving as the President and feel very fortunate to have had this opportunity. Our objectives over the period have been to uphold ICSB values (professionalism, ethics, judgment, integrity, dynamism) reaching out to serve the corporate sector, society where we live and the country as a whole and support ICSB members where ever possible. Based on the overall feedback received from the community throughout our tenure, we believe not only these ICSB values have been entrenched but overall standards and expectations have been raised.

In my immediate preceding Presidential message in the ICSB Journal (January to March 2019 Issue), I mentioned that we have requested NBR again for including Chartered Secretary

profession as Income Tax and VAT Practitioner in the Finance Act 2019. I also requested all the members in the same message to work on this issue from their own side so that we can reach to our goal.

Yes, by the grace of Almighty Allah, a whole-hearted effort of the Council and continuous efforts of our members, Chartered Secretaries Professionals got the opportunity to perform as VAT Consultant as per the SROs (SRO No: 171-Act/2019/28-VAT and SRO No: 238-Act/2019/74-VAT) which will enable experienced Chartered Secretaries with a minimum of 5 years’ experience to practice as VAT Consultant without any examination. I would like to thank NBR for their kind consideration of including Chartered Secretaries to act as VAT Consultants and we are also expecting that they will allow the CS Professionals to practice as ITP in future.

Our members will have to prepare themselves for VAT consultant’s services on which NBR entrusted ICSB. It is their moral obligation to the NBR and ultimately to the nation. I wish the deserving members success to work as VAT Consultants towards a good start.

We have under taken different initiatives and drives to encourage brilliant students’ enrolment.

In this connection, the institute has organised demonstration programs in both public and private universities i.e. BRAC University, University of Dhaka, United International University, American International University Bangladesh and Jahangirnagar University. I believe our initiatives will bear fruits in near future.

I am also happy to note that ICSB Members Night 2019 and in holding 9th anniversary of enactment of Chartered Secretaries Act, 2010 in a grand April-June 2019 | 5

manner that was celebrated on June 20, 2019, was a wonderful milestone to celebrate as we enter our Institute’s 22nd year. Hon’ble Commerce Minister, Tipu Munshi MP graced the occasion as the Chief Guest and Former Commerce Secretary Suhel Ahmed Chaudhary as the Special Guest.

If there is one key message which I would like to leave as the outgoing President of ICSB after the 4th Council Election, it is this: it makes a difference whether you belong to a professional Institute or not. I want to encourage each and every one of you to get involved with the activities of ICSB in any way that you can. ICSB can only be as great as its Members are willing to be involved. It is your Institute. Know yourself and take your role seriously. But it is about more than just attending events.

If we want to be treated like professionals, we need to think, talk, be committed and act like real professionals.

Actually belonging matters, just like other professionals. My humble request to all the Members is to please attend at the Annual General Meeting of the Institute on September 28, 2019 and elect the new Council Members for the term 2019-2022 for leading the Institute to the highest standard.

I would like to convey my sincere thanks to different government bodies, CSIA, patrons and corporate partners in helping ICSB to fulfil its objectives and for upholding the principles and high standards for promoting governing excellence.

I would like to express my heartfelt thanks and gratitude to all of you for your extensive support and advice to me in discharging my

6 | April-June 2019

responsibilities as President of the Institute. It has been an honor, a joy, and an experience that I will always remember. In-spite of all odds your Council worked unitedly and as a team, we had put our best efforts during the tenure to run this institute effectively and efficiently. Our success is remarkable due to your tireless work of the Community who have volunteered their time, energy and expertise to the Council, The Committees also worked well with many initiatives and activities. Lastly, special thanks to ICSB Officials for making my Presidential tenure successful.

Nevertheless, there were mistakes and non fulfilment of your expectations. I, as your President, take full responsibility and beg apology to all of you. It was indeed a great challenge for the Council. I can assure you that we tried with our utmost sincerely and dedication.

Before I conclude I assure you of my fullest and sincere support to the new Council. I also assure that I shall continue to render my services to the Institute in the future as and when required.

I wish all of your continued personal and professional success. May Allah help us to make the Institute a centre of professional excellence.

Kind Regards

Mohammad Sanaullah FCS

PRESIDENT

INSTITUTE NEWS April-June 2019

I

INTERNAL MEETINGS

INSTITUTE NEWS

Meetings of the Council and Standing Committees

ICSB took part in Bangladesh Capital Market Expo 2019

Following meetings of the Council and Standing Committees were held during the quarter:

Institute of Chartered Secretaries of Bangladesh (ICSB) participated in Bangladesh Capital Market Expo 2019 for the 4th time held on April 4 to 6, 2019 at the Bangladesh Shilpakala Academy, Dhaka. The Expo is organized by the “Arthosuchak”, an online news portal on Business and Economics as an annual event. The Programme was inaugurated by the Economic Affairs Advisor to the Prime Minister, Dr. Mashiur Rahman as the Chief Guest. Prof. Dr. Khairul Hossain, Chairman, Bangladesh Securities and Exchange Commission (BSEC) was also present on the occasion as Special Guest.

•

The Council meeting was held on June 16, 2019;

•

The Education Committee meetings were held on April 06 and May 11, 2019;

•

The Examination Committee meeting was held on May 04, 2019;

•

The Executive Committee meeting was held on June 15, 2019; and

•

The Membership and Registration Committee meeting was held on June 16, 2019.

Meetings of Sub Committees Following meetings of the Sub Committees were also held during the quarter: •

CS Regulations Sub Committee meetings were held on April 6, April 11 and May 18, 2019;

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Professional Development Sub Committee meetings were held on April 9, June 23 and June 30, 2019;

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Dhaka Regional Chapter Sub Committee meeting was held on April 10, 2019;

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Journal and Publication Sub Committee meetings were held on April 20, April 29 and June 15, 2019;

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Members Welfare and Recreation Sub Committee meetings were held on May 4 and May 25, 2019;

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International Relations Sub Committee meeting was held on May 18, 2019;

•

Members Placement Sub Committee meeting was held on May 20, 2019; and

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Secretarial Practice Sub Committee meeting was held on May 25, 2019.

8 | April-June 2019

Mohammad Sanaullah FCS, President of Institute of Chartered Secretaries of Bangladesh (ICSB) presented a Keynote Paper on “Challenges of Implementing

Snapshots of Bangladesh Capital Market Expo 2019

In the Expo, ICSB had a stall with prospectuses, brochures, handbooks, multi-media presentations etc. to provide information to the visitors regarding the procedure of becoming a Chartered Secretary and the future prospects of the profession in Bangladesh, admission process and other relevant information. A good number of visitors visited the stall with enthusiasm and collected information about the Institute.

Md. Selim Reza FCS, Vice President of ICSB, A.K.M. Mushfiqur Rahman FCS, Council Member of ICSB, Md. Shamibur Rahman ACS, Secretary in Charge of ICSB and other members of the Institute visited the Expo.

ICSB Organized Demonstration Programme to Promote Chartered Secretary Profession at University of Dhaka The Institute organized a demonstration programme on “Chartered Secretary as a Challenging Profession in the Corporate World” for the students of Faculty of Business Studies, University of Dhaka at Prof. Dr. Mohammad Habibullah Conference Hall on April 8, 2019 in collaboration with the Faculty of Business Studies of the said University.

Mohammad Sanuallah FCS, President of the Institute was the keynote speaker of the programme. He welcomed the bright and the potential students of University of Dhaka for participating in the session and discussed the necessity of professional degrees in addition to academic degrees for accelerating career success. He highlighted the prospects of the Chartered Secretary profession in our country and abroad. He briefly discussed CS course curriculum, classes, and examination system and membership process. He also informed them about the history of ICSB. Honorable Prof. Dr. Mahfuzul Hoque, Deputy Programme Director, MPA Programme, Faculty of Business Studies, University of Dhaka graced the occasion as Session Chair. He thanked President of ICSB for taking the initiative to orient a challenging and rewarding profession to the students. He emphasized the importance of the Chartered Secretary profession.

He also mentioned that such kind of programmes need to be arranged regularly thus students can take informed decision about their career. Faculty of Business Studies and ICSB are interested to sign a MoU for sharing knowledge and other relevant mutual support.

A good number of students and faculty members were present in the program and participated spontaneously during the question and answer session. Students asked various relevant questions regarding CS course and profession. Participating students showed interest about the Chartered Secretary profession.

Md. Selim Reza FCS, Vice President of ICSB delivered welcome speech and cordially thanked everyone for participating in the befitting event. Among others, A.K.M. Mushfiqur Rahman FCS, Council Member of ICSB participated in the programme. Md. Shamibur Rahman ACS, Secretary in Charge of the Institute delivered vote of thanks on behalf of the Institute.

ICSB Celebrated Pohela Boishakh 1426

Demonstration Programme at Dhaka University

ICSB celebrated the Bangla New Year 1426 “Pohela Boishakh” organized by Dhaka Regional Chapter Sub Committee of ICSB on April 14, 2019 with great enthusiasm and vigor, with the presence of a large number of Members along with their spouses and children. A cultural programme of Bengali tradition including poetry recitation, song and dressed as you wish for children ware also organized during the occasion.

April-June 2019 | 9

INSTITUTE NEWS

Corporate Governance Code” in a Seminar of Bangladesh Capital Market Expo 2019 on April 4, 2019.

Prof. Md. Helal Uddin Nizami, Commissioner, Bangladesh Securities and Exchange Commission (BSEC) graced the Seminar as the Chief Guest.

Presentation of Internship Report

Mohammad Sanaullah FCS, President of ICSB, inaugurated multimedia presentation programme on internship report for the students upon completion of the course. The Office Bearer and Council Members of ICSB were also present in this important event. They observed everyone’s presentation and gave their valuable feedback accordingly. All the students were attentive to the feedback of the Council Members.

ICSB Celebrated Pohela Boishakh 1426

Mohammad Sanaullah FCS, President of ICSB welcomed and thanked everyone for participating in this event. In his speech, he said that, Pohela Boishakh is one of the most colorful festivals through which the Bangalis bid farewell to the old year and welcome the New Year. The celebrations of Pohela Boishakh have become an integral part of our culture. Mohammad Sanaullah FCS presented different prizes to the Members and their families for being the winners of different events.

Among others, Md. Selim Reza FCS, Vice President, Nazmul Karim FCS, Treasurer, A.K.M. Mushfiqur Rahman FCS Council Member and Md. Shamibur Rahman ACS, Secretary in Charge of the Institute were also present.

Syed Moniruzzaman FCS, Chairman of the Dhaka Regional Chapter Sub Committee gave a concluding speech on behalf of the Institute.

The programme ended with an enchanting cultural programme of Bengali tradition folk song. Customary Bengali snacks and dinner were also served among the participants.

Presentation of Internship Report Multimedia presentation programme on internship report of the Qualified Chartered Secretary (QCS) was held on May 4, 2019 at the ICSB Campus.

All registered students of the internship course participated in the presentation programme.

10 | April-June 2019

Presentation of Internship Report

Workshop on “How to Behave Professionally?”

ICSB organized a workshop for the QCSs of the Institute on “How to Behave Professionally” on May 11, 2019 at the ICSB campus. Mohammad Sanaullah FCS, President of the Institute conducted a comprehensive presentation. He highlighted on the different aspects of professional business etiquette, such as-

How to behave with colleagues and clients

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How to say ‘no’ to a customer

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How to build professional network/relationship

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How to improve listening

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How to adopt PET

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How to maintain a clean and tidy environment to follow

INSTITUTE NEWS ICSB Delegates with Commerce Minister

The delegation also included Md. Selim Reza FCS, Vice President, Salim Ahmed FCS, Council Member and Chairman, Members’ Welfare and Recreation Sub Committee, Mohammad Obaydur Rahman FCS, Member, Members’ Welfare and Recreation Sub Committee and Md. Shamibur Rahman ACS, Secretary in Charge & Director (A&F) of ICSB. Doa Mahfil and Iftar of Institute of Chartered Secretaries of Bangladesh (ICSB) Snapshots of Workshop

He also discussed on the official attire and decorum of business meeting. Overall the workshop was very useful and productive for the Qualified Chartered Secretaries.

Members highly appreciated for presenting such relevant topics for them.

Salim Ahmed FCS, Council Member of ICSB mentioned that this workshop would help to raise consciousness among Members. A large number of Qualified Chartered Secretaries attended the programme.

Meeting with Mr. Tipu Munshi MP, Honorable Minister, Ministry of Commerce A Delegation of the Institute of Chartered Secretaries of Bangladesh led by its Past President and Council Member, Itrat Husain FCS called on Mr. Tipu Munshi, MP, Hon'ble Minister, Ministry of Commerce, Government of the People’s Republic of Bangladesh on May 16, 2019 at his office. The Past President of ICSB briefed the Minister on various ongoing activities of the Institute and thanked the Ministry for the generous support and cooperation for the Institute.

Itrat Husain FCS specially briefed him about the forthcoming ICSB Members’ Night 2019 of ICSB with humble invitation for kind consent to grace the programme as “Chief Guest”. Mr. Tipu Munshi MP thanked him and gave consent to be the Chief Guest of the event.

Institute of Chartered Secretaries of Bangladesh (ICSB) organized a Doa Mahfil and Iftar on May 25, 2019 at Samson H. Chowdhury Centre, Party Lounge, Dhaka Club Limited, Dhaka. Mohammad Sanaullah FCS, President of the Institute and a large number of Members including the Councilors and Office Bearers of the Institute attended the programme.

In the welcome speech, Salim Ahmed FCS, Council Member and Chairman, Members’ Welfare and Recreation Sub Committee of the Institute appreciated the Members for their participation in the programme despite their busy schedule and thanked all concerned for making the programme successful. Members of the institute played Hamd-Nath and Islamic Gazal.

Mohammad Sanaullah FCS, President of ICSB addressed the audience in the programme and expressed condolence at the sad demise of Md. Saiduzzaman FCS (F-0007) Founding Member of the Institute, who passed away on May 23, 2019. Among other, Founding Member Muzaffar Ahmed FCS and

Doa Mahfil and Iftar of ICSB

April-June 2019 | 11

Sultan-ul-Abedine Molla FCS and Senior Fellow member Md Abdus Salam FCS also expressed condolence and remembered his contribution to the Institute. Among others, Founding Members, Council Members including Government nominated Council Member, Fellow members, and Associate members of the Institute also attended the programme. A renowned Islamic scholar discussed the values of Ramadan in our life and conducted the Doa. ICSB Celebrated Members’ Night- 2019 Institute of Chartered Secretaries of Bangladesh (ICSB), celebrated a grand Members’ Night 2019 on June 20, 2019 at the Grand Ball Room of Hotel Radisson Blu Dhaka Water Garden, Dhaka. On this auspicious evening, the Institute celebrated the 9th anniversary of Enactment of Chartered Secretaries Act, 2010 in a grand manner.

Mr. Tipu Munshi MP, Hon’ble Minister, Ministry of Commerce, Government of the People’s Republic of Bangladesh graced the occasion as the Chief Guest while Mr. Suhel Ahmed Choudhury, Former Secretary, Ministry of Commerce was present as Special Guest.

The Honorable Chief Guest, in his speech, said that he was very delighted to attend the programme. He mentioned that the visionary leader Sheikh Hasina, Honorable Prime Minister, Government of the People’s Republic of Bangladesh had realized the requirements and imperative need and necessity for the growth and promotion of CS profession which paved the way for the promulgation of the Chartered Secretaries Act, 2010. He hoped that the Institute of Chartered Secretaries of

Bangladesh (ICSB) would work for further improvement of corporate management and good corporate governance in Bangladesh.

While extending heartiest thanks to the members of ICSB, Special Guest, Mr. Suhel Ahmed Choudhury underscored the present government’s commitment to ensuring good corporate governance and corporate culture of the companies of Bangladesh. He applauded the role of the Institute of Chartered Secretaries of Bangladesh for developing professional skills in the corporate sector.

Mohammad Sanaullah FCS, President of the Institute welcomed all the guests and their spouses. In his welcome speech, he expected that such social gatherings will be arranged regularly in the future to pave the way for mutual sharing and understanding among the Members and their families. He further expected that the bondage among the Members of ICSB will be more consolidated and resilient through attending such events. In his speech, the President outlined various activities taken by the Institute during last three (3) years and recalled the timeless effort and hardships that the Members went through to pursue the Government of Bangladesh for the growth of ICSB. He humbly requested the Hon’ble Chief Guest to make necessary amendment in Companies Act as it became backdated and also include ICSB’s proposal in the new Companies Act. Salim Ahmed FCS, Chairman, Members Welfare and Recreation Sub Committee of the Institute offered vote of thanks.

Mr. Tipu Munshi MP, Hon’ble Minister, Ministry of Commerce, Mr. Suhel Ahmed Choudhury, Former Secretary, Ministry of Commerce, Mohammad Sanaullah FCS, President, ICSB among other Past Presidents, Founding Members and Council Members were seen in the Members’ Night 2019 celebration

12 | April-June 2019

INSTITUTE NEWS President of ICSB Handing over Crest to the Commerce Minister

Demonstration Programme at UIU Cultural Programme of the Event

ICSB Organized Demonstration Programme to Promote Chartered Secretary Profession at United International University The Institute has organized a demonstration programme on “Chartered Secretary as a Challenging Profession in the Corporate World” for the students of United International University (UIU) at on June 29, 2019.

Mohammad Sanuallah FCS, President of the Institute was the speaker of the programme. He welcomed the bright and the potential students of United International University for participating in the session and discussed the necessity of professional degrees in addition to academic degrees for accelerating career success. He highlighted the prospects of the Chartered Secretary profession in our country and abroad. He briefly discussed CS course curriculum, classes, and examination system and membership process.

Mr. James Bakul Sarkar, PhD, Associate Professor, Accounting and Deputy Director of BBA Program of United International University (UIU) graced the occasion as Session Chair. He thanked the President of ICSB for taking the initiative to orient a challenging and rewarding profession to the students. He emphasized the importance of the Chartered Secretary profession.

He also mentioned that such kind of programmes need to be arranged regularly thus students can take informed decision about their career. After the program, a meeting was conducted with the Vice Chancellor and Pro Vice Chancellor of the United International University.

A good number of students were present in the program and participated spontaneously during the question and answer session. Md. Shamibur Rahman ACS, Secretary in Charge of the Institute delivered vote of thanks on behalf of the Institute.

ICSB organized CPD Seminar on “Finance Act, 2019 vis-à-vis National Budget 2019- 20 and New VAT Policy and its Implementation Process” ICSB organized a CPD Seminar on “Finance Act, 2019 vis-à-vis National Budget 2019- 20 and New VAT Policy and its Implementation Process” on July 6, 2019 at Samson H. Chowdhury Centre, Dhaka Club.

Mr. Md. Mosharraf Hossain Bhuiyan, NDC, Senior Secretary, Internal Resources Division & Chairman National Board of Revenue (NBR), Ministry of Finance, Govt. of Bangladesh, graced the occasion as the Chief Guest while Mr. Kanon Kumar Roy, Member (Tax Policy) and Dr. Abdul Mannan Shikder, Member (VAT Policy) were special guests. ICSB accorded a grand reception to them for their outstanding contribution to ICSB. The NBR Chairman spoke about the new budget in detail.

Mohammad Asad Ullah FCS, Chairman, Professional Development Sub- Committee, Immediate Past President and Council Member of ICSB presided over the CPD Seminar, delivered the address of welcome and summed up the session. He thanked for issuing two SROs (SRO No: 171-Act/2019/28-VAT and SRO No: 238-Act/2019/74-Vat) which will enable experienced Chartered Secretaries with a minimum of 5 years’ experience to practice as VAT Advisor’ without any

April-June 2019 | 13

Distinguished personalities at the CPD Seminer on “Finance Act, 2019 vis-à-vis National Budget 2019- 20 and New VAT Policy and its Implementation Process” exam. He sincerely expected that the Hon’ble Chairman and Members of NBR will take necessary positive steps to include ICSB members as ITP in the Income Tax Ordinance by issuing necessary SRO(s).

Mr. Md. Mosharraf Hossain Bhuiyan, NDC, the Chief Guest appreciated role of the Chartered Secretaries who are working to ensure good governance in the corporate sector. NBR believes that the Company Secretaries should come forward to assist NBR for revenue collection. He also mentioned that Bangladesh is one of the highest in allowing customs duty rebate.

VAT Act has been made much flexible for easy implementation. The prime objective of NBR is to increase the number of tax payers and achieve revenue target. He assured that he will take all out measures to include the profession of Chartered Secretary as Income Tax Practitioner (ITP) who can provide services to their clients professionally.

Md. Azizur Rahman FCS, Council Member and Chairman, Seminar & Conference Sub Committee of ICSB presented the Keynote paper while Mr. Kanon Kumar Roy, Member (Tax Policy) and Dr. Abdul Mannan Shikder, Member (VAT Policy) put their observations on the keynote paper and Prof. Dr. Feroz Iqbal Faruque FCS was the designated discussant. Md. Azizur Rahman focused on the overview of the Finance Act 2019 highlighting the changes in the Income Tax Regulations, Summary of the new VAT Act 2012 and its impact on the business as well as Individual Taxpayers.

He focused on the recent SROs issued by National

14 | April-June 2019

Board of Revenue on June 13, 2019, and on June 30, 2019, allowing Chartered Secretary (CS) Professionals to practice as VAT Agent, which is a great recognition for the profession. He also highlighted how CS professionals can play an important role to collect government revenues through NBR. A large number of Chartered Secretary Professionals and Qualified Chartered Secretaries attended the program. Md. Abdullah Al Mamun FCS offered a vote of thanks on behalf of ICSB. 4th Election to the Council of ICSB The 4th Election of the Council of the Institute of Chartered Secretaries of Bangladesh will be held under the provision of the Chartered Secretaries Act 2010 and Chartered Secretaries Regulations 2011 on September 28, 2019 at Bangladesh Shooting Sport Federation, Shooting Complex, Gulshan-1, Dhaka-1212 after the 9th Annual General Meeting (AGM).

The tenure of the present council will end on October 4, 2019. New council will be formed after the election on September 28, 2019. In this connection, an Election Commission was constituted with Md. Mohashin FCS as Chairman, Md. Abdus Salam Khan FCS and Imrul Ahmed FCS as Members and Md. Hasan Kabir FCS as Returning Officer and Rulia Akhter as Assistant Returning Officer to conduct the Election. It is expected that all the Members of ICSB will participate, exercise their voting rights and elect 13 Members of the Council of ICSB for the term 2019-2022.

Member ID Card It is with good hope that Institute of Chartered Secretaries of Bangladesh (ICSB) has introduced members Identification Card (ID) which will be helpful for the members in different aspects to take benefits from ICSB’s partnership with other organizations like hospitals, etc.

Institute of Chartered Secretaries of Bangladesh A Statutory Body Under an Act of Parliament

Membership No.

F-0000 Name

XXXXXX XXXXX XXX Issue Date

01/07/2019

Authorized Signature

Corporate Health Benefits The Institute of Chartered Secretaries of Bangladesh (ICSB) has signed ‘Deed of Agreement’ for healthcare services with seven (07) different hospitals for health care benefits.  Labaid Specialized Hospital, is the first international standard super-specialty hospital of the country, dedicated exclusively to the diagnosis and treatment of cardiovascular diseases have been built on a six storied building at, Dhanmondi - a commercial cum residential hub of Dhaka City, covering a floor space of more than 100000 sq. feet.

Services are offered for ICSB Members, employees and dependents. It is located at House- 06, Road-04, Dhanmondi, Dhaka 1205.

Discount Offer: 1. 20% discount on all pathological & biochemistry investigations 2. 10% discount on X-ray, CT scan and MRI, Ultra-sonogram, ECG, Echo and ETT investigations 3. 5% discount on bed charges while the patients are admitted in Labaid Cardiac Hospital & Labaid Specialized Hospital  The IBN SINA Trust, is started its journey in June 1980 with a noble vision “To serve the humanity”. The trust has agreed upon to provide healthcare service to the people of Bangladesh at affordable cost. Services are offered for ICSB Members, employees and their eligible dependents. It is located at House # 48, Road # 9/A, Dhanmondi, Dhaka 1209.

Discount Offer: 1. 35% discount on all kinds of pathological tests 2. 30% discount on all kinds of PCR tests 3. 30% discount on all kinds of Radiological and Imaging tests 4. 10% discount on Dental service  Central Hospital Limited, a 260 bed private hospital in Dhanmondi, Dhaka and started its journey with the guide line of National Professor Dr. M.R. Khan, is a corporate partner of ICSB. Central Hospital offers the members and employees of the Institute of Chartered Secretaries of Bangladesh and their spouses, children, father and mother to provide a complete Health Care Service with the benefits as follows: Discount Offer: 1. 25% discount on pathological investigation (Blood, Urine etc.).

2. 10% discount on Radiology & Imaging (X-Ray), CT scan, Endoscopy, ECG, etc.).

3. 20% discount on histopathology.

4. 10% discount on Hospital bed rent for admitted patients.

April-June 2019 | 15

INSTITUTE NEWS

Welfare Benefits for ICSB Members

 Bangladesh Specialized Hospital Limited, is responsible for ensuring and sustaining the health care service to people in broad-spectrum. BSHL been decorated with all kind of sophisticated and modernized equipment and highly trained personnel to ensure one stop services. Services are offered for ICSB Members and employees. It is located at 21, Shyamoli Mirpur Rd, Dhaka 1207.

Discount Offer: OPD Services: 1. 25% discount on all pathological & biochemistry investigations 2. 15% discount on X-ray, CT scan, MRI, ECG, Ultra-sonogram, Echo and ETT IPD Services: 1. 10% discount on all pathological & biochemistry investigations 2. 10% discount on X-ray, CT scan, MRI, ECG, Ultra-sonogram, Echo and ETT 3. 10% discount on bed charges while the patients are admitted in BSHL  BRB Hospitals Limited, East Razabazar, Panthapath, Dhaka a pioneer in Corporate Hospital Sector in Bangladesh, is a corporate healthcare partner of ICSB. It provides premium quality service to the members & students of ICSB. In brief, the Facilities under the Corporate Agreement are given below: Discount Offer • For Outdoor Patient Facility 1. 20% Discount on all Pathological Test 2. l5% Discount on all Radiological Test except doctor's fee • For Indoor Patient Facility 1. 20% Discount on all Pathological Test 2. l5% Discount on all Radiological Test except doctor's fee 3. 10% Discount on Bed Charge • No POS Charge Applicable • No Registration Charge • One Stop Service at Corporate Desk • Ensuring Corporate Priority Service  CARe Medical College & Hospital Limited, is a health care conglomerate focused on developing and delivering health care services since last twenty years. Services are offered for ICSB Members, Students and employees and for their dependents. It is located at 1/5, Block#B, Mohammadpur Housing Estate, College Gate, Mirpur Rd, Dhaka 1207.

Discount Offer: 1. 25% discount on all pathological & biochemistry investigations.

2. 25% discount on X-ray, Ultra-sonogram, ECG, Echo and ETT investigations.

3. 25% discount on CT scan, MRI 4. 10% discount on bed charges while the patients are admitted  Insaf Barakah Kidney and General Hospital, a Specialized and General Hospital, situated at 11 Shaheed Tajuddin Ahmed Sarani, Moghbazar, Dhaka is offering the honourable Members & Employees of ICSB with the following benefitsDiscount Offer: 1. All kinds of Pathological Test for 40% & Imaging Test 35% discount for outdoor.

2. Hospital Bed Rent and Service Charges for l0% discount.

3. ICU Bed Charges for l0% discount.

4. Emergency Fees for 10% discount (Outdoor): 5. Dental and Physiotherapy charge for 10% discount.

6. Ambulance Rent for 10% discount.

7. All kinds of Bangladeshi Medicine in general for 6% discount (Outdoor).

16 | April-June 2019

INSTITUTE NEWS

NEW COUNCIL MEMBER Mr. Mohammad Manzarul Mannan is a civil servant holding the post of Joint Secretary in Finance Division, Ministry of Finance, Government of the People’s Republic of Bangladesh. Mr. Mannan obtained his BSS (Honors) in 1988 and MSS in 1989 in Economics from the University of Chittagong.

Mr. Mohammad Manzarul Mannan joined 15th batch of Bangladesh Civil Service in Administration cadre as Assistant Commissioner on December 2, 1995. Afterward, he was promoted to Senior Assistant Commissioner, NDC, Upazila Nirbahi Officer and Additional Deputy Commissioner. He also obtained Masters in Financial Economics from the University of Bradford, West Yorkshire, England.

During his service career he received various national and international training and attended seminars and conferences at home and abroad.

Mohammad Manzarul Mannan Joint Secretary, GoB

SUCCESS GREETINGS F-0056

M. Naseemul Hye FCS M. Naseemul Hye FCS a Fellow Member of the Institute has been given an additional responsibility of Trustee and Chief Executive Officer (CEO) of Bashundhara Foundation on April 2019. Presently he is working as Senior Executive Director and Company Secretary of Bashundhara Group.

F-0117

Md. Anwar Hossain Chowdhury FCS Md. Anwar Hossain Chowdhury FCS a Fellow and Council Member of the Institute has been awarded Movers and Shakers Award of the Asia HRD Awards 2019 for his active influence to bring changes and breakthroughs in people’s development and to give strength and support to many professionals. The Award handed over to Md. Anwar Hossain Chowdhury FCS on July 16, 2019 at Grand Hall, Cyberjaya University College of Medical Sciences (CUCMS) Campus, Cyberjaya, Malaysia.

April-June 2019 | 17

SUCCESS GREETINGS F-0123

Jashim Uddin FCS Md. Jashim Uddin FCS a Fellow Member of the Institute has been promoted to the position of Senior Vice President, Company Secretary and Head of Corporate Affairs on July 1, 2019 in Delta Brac Housing Finance Corporation Limited. Prior to this, he was Vice President, Company Secretary and Head of Corporate Affairs of the same organization.

F-0132

Md. Jakir Hossain FCS Md. Jakir Hossain FCS a Fellow Member of the Institute got an additional responsibility of Chief Financial OfďŹ cer (CFO) of Bio Pharma Limited on March 23, 2019. He is Company Secretary of the same organization.

A-0359

Mohammad Kamruzzaman ACS Mohammad Kamruzzaman ACS an Associate Member of the Institute got an additional responsibility of Head of Legal of Partex Star Group on June 1, 2019. He is Company Secretary of the same organization.

A-0370

Md. Nazrul Islam Chowdhury ACS Md. Nazrul Islam Chowdhury ACS an Associate Member of the Institute has been promoted to the position Deputy Secretary on February 1, 2019 of Metropolitan Chamber of Commerce and Industry (MCCI) Dhaka. Prior to this, he was Senior OfďŹ cer of the same organization.

18 | April-June 2019

Mohammad Enayet Rabbani Chowdhury ACS Mohammad Enayet Rabbani Chowdhury ACS an Associate Member of the Institute joined Modern Group of Companies as Secretary and Head of HR on February 10, 2019. Prior to this, he was Head of HR and Administration and Company Secretary of BRB Group (BRB Hospitals Limited).

A-0414

Md. Moshihor Rahman ACS Md. Moshihor Rahman ACS an Associate Member of the Institute joined Lub-rref (Bangladesh) Limited as Company Secretary on May 2, 2019. Prior to this, he was Head of HR and Company Secretary of Progressive Life Insurance Company Limited.

A-0431

Md. Mohibul Alam ACS Md. Mohibul Alam ACS an Associate Member of the Institute promoted to Senior Manager of Mahmud Group on February 19, 2019. Prior to this, he was Manager, Accounts and Finance of the same organization.

A-0455

Sharif Dilnewaz Hossain ACS Sharif Dilnewaz Hossain ACS, Jr. Assistant Vice President, IT Audit Cell of Shahjalal Islami Bank Limited awarded as Information Security Management System (ISMS) ISO 27001:2013 Provisional Internal Auditor (CertiďŹ cation # 6088335, valid until 01.05.2024) of International Register of CertiďŹ cated Auditor (IRCA) under Chartered Quality Institute (CQI) which is incorporated by Royal Charter in England and Wales.

A-0539

Abdur Rob ACS Abdur Rob ACS an Associate Member of the Institute joined Crystal Insurance Company Limited as Assistant Vice President (AVP) and Assistant Company Secretary on December 17, 2018. Prior to this, he was Assistant Manager, Central Accounts Department of IFAD Autos Limited.

April-June 2019 | 19

INSTITUTE NEWS

A-0390

Newly Elevated Fellow Members During the 2nd Quarter of 2019, the Council has elevated 16 Associate Members to the Fellow Members. The newly elevated Fellow Members are:

F-0217

F-0222

Mohammad Mostafizur Rahman FCS Company Secretary Advanced Chemical Industries Limited

Md. Zaker Rahmatullah FCS Deputy Secretary The Institute of Internal Auditors, Bangladesh

F-0218

F-0223

Muhammad Abu Bakar Siddique FCS Company Secretary Rakeen Development Company (BD) Limited

Shyamal Shikder FCS Assistant General Manager(Commercial & Compliance) Elite Group of Industries

F-0219

F-0224

Mohummod Tareq Hosen Mozumder FCS Company Secretary Duncan Brothers (Bangladesh) Limited

Md. Shiful Islam FCS Senior Manager Monitoring and Compliance Department Dhaka Stock Exchange Limited

F-0220

F-0225

Md. Sharif Hasan FCS Company Secretary & Chief Compliance Officer Unique Hotel & Resorts Limited (Unique Group)

Mohammad Mahbubur Rahman FCS Manager & Head of Department (A & F) JCL Group

F-0221

F-0226

Shantanu Debnath FCS First Assistant Vice President (FAVP) Special Asset Management Division (SAMD) Prime Bank Limited

Mokeshudey Alahi Mazumder FCS Company Secretary Hajj Finance Company Limited

20 | April-June 2019

F-0230

Sushanta Kumar Paul FCS Company Secretary Apex Tannery Limited

Md. Robiul Islam FCS Company Secretary Paramount Textile Limited

F-0228

F-0231

Md. Monir Hossain FCS Company Secretary ADN Telecom Limited

Md. Salim Reza FCS Manager (Accounts & Finance) Amin Mohammad Group

F-0229

F-0232

Md. Rabiul Alam FCS Company Secretary Sunlife Insurance Company Limited

Md. Asraful Islam FCS Advocate, Supreme Court of Bangladesh & Associates Al-Amin & Associates

New Associate Members During the 2th Quarter of 2019 the following 14 Chartered Secretaries were admitted as Associate Members of the Institute:

A-0536

A-0538

Partha Kumar Saha ACS Assistant Vice President Bank Asia Limited

Md. Oliur Rahman ACS Senior Manager AAA Finance & Investment Limited

A-0537

A-0539

Nabadip Roy ACS Principal Officer Mercantile Bank Limited

Md. Abdur Rob ACS AVP & Assistant Company Secretary (Admin & Secretariat Department) Crystal Insurance Company Limited

April-June 2019 | 21

INSTITUTE NEWS

F-0227

A-0540

A-0545

Sheikh Azizul Haque ACS Sr. Vice President (Finance & Accounts) City General Insurance Co. Limited

Md. Ahasan Habib ACS Assistant Professor Department of Accounting Dhaka City College

A-0541

A-0546

Mohammed Quamruzzaman Khan ACS Manager (F&A) Helix Wire & Cables Industries Limited

Md. Mominur Rahman ACS Deputy Company Secretary Magura Group

A-0542

A-0547

Sujan Kumar Nath ACS Officer & Credit in-Charge NRB Global Bank

Md. Mamun Hossain ACS Assistant Vice President & Head of Branch NRBC Bank Limited Board Bazar Branch

A-0543

A-0548

Md. Didarul Islam Perves ACS Company Secretary & Head of Legal Central Hospital Limited

Sajal Kumer Talukder ACS Head of Finance & Company Secretary Mamico Group

A-0544

A-0549

Mohammad Nuruzzaman ACS Manager Banco Finance and Investment Limited

Md. Shafiqul Islam ACS General Manager (A & F) Sikder Trade Group

22 | April-June 2019

INSTITUTE NEWS

We Mourn

Òbqb mg~‡L Zzwg bvB bq‡bi gvSLv‡b wb‡q‡Qv †h VuvBÓ

Md. Saiduzzaman FCS (Membership No F-0007), One of the founder member of ICSMB and Ex DirectorFinance & Accounts of Independent University, Bangladesh died on May 23, 2019 (Inna Lillahi Wa Inna Illayhi Rajiun). He was 68.

We all pray for the eternal peace to the departed soul.

Md. Ibrahim Khalil FCS (Membership No F-0071) Chief Operating Officer, Anwar Cement Limited, Anwar Group of Industries died at Appolo Hospital Dhaka on June 6, 2019 (Inna Lillahi Wa Inna Illayhi Rajiun). He was 66.

We all pray for the eternal peace to the departed soul.

April-June 2019 | 23

Articles

April - June 2019

ARTICLE

TID BITS of National Budget 2019-2020- Few Compassionate, Compulsive & Repulsive Issues Prof. Dr. Feroz Iqbal Faruque FCS

I

ntroductory Dilemma:

In the last several years, the government focused more on setting lofty revenue earning goals, only to fall short at the year end. The National Board of Revenue collected about Tk. 2.24 trillion in 2018-19 fiscal year with a 10.7 percent growth but missing the target by 20 percent and posting the slowest rate in five years. NBR said the reasons for shortfall were due to waivers in taxes, drop in imports, and a tendency to evade paying taxes. Waivers cost the government Tk. 167 billion in revenue loss in last financial year. Revenue growth was almost double in 2017-18 than that of last year. It grew 17.9 percent to Tk. 2.02 trillion that year. Bangladesh posted revenue growth as low as 10.7 percent for the last time in 2013-14. The largest source of last financial year’s revenue was Value Added Tax or VAT –accounting for more than Tk. 876 billion or 39.1 percent of the total collection. It was followed by income tax of about Tk. 729 billion or 32.6 percent and duty of over Tk. 633.82 billion or 28 percent. Import slumped slightly in last fiscal year and may be a drop-in food product caused the slump in import duty.

Bangladesh’s total import grew by only 2.61 percent to a little over $56 billion in 11 months of the last fiscal year. The previous year saw a growth of 25.23 percent to over $58.86 billion, according to the central bank.

The tendency to dodge taxes for instance; many traders were importing galvanized plain steel sheets, for which the duty was 25 percent, by declaring import of steel roll with 10 percent duty. The government was also counting loss of revenue as many traders were importing goods under duty-free bonded warehouse facilities but selling those in open market. NBR has taking actions against such businesses and have suspended 342 licenses according to NBR. The government has made a Tk. 5.23 trillion budget this fiscal year with a plan to feed 72 percent of the spending from revenue, setting a target of about Tk. 3.78 trillion, which is 19 percent more than the one mentioned in the revised budget for last fiscal year. The government is expecting about achieving the target

with the imposition of 5 percent advance tax on import and by bringing 672,000 taxpayers under the tax net soon.

For the current fiscal year, the revenue target has been set at Tk. 377,810 crore, which is 17.92 percent more than that in the outgoing FY. In FY 2018-19, the original revenue target was Tk. 3, 39,280crores, which was 25 percent higher than that in the previous fiscal year. Of the revenue earning in the FY 2018-2019, the National Board of Revenue was supposed to collect Tk. 325,600 crore, which was around 16.28 percent higher than the revised collection target of Tk. 280,000 crore in the last FY. The target was 31.64 percent higher compared to the previous one. Similarly, the size of the current budget grows by 18.22 percent whereas it was 25 percent in the outgoing fiscal year. Compared to the GDP, the size of the budget is 18.1 percent, down from 18.3 percent in 2018-19.

Since this is the first budget of the re-elected government with a new election manifesto and a new finance minister, it is not unreasonable to expect a new beginning where major structural reform initiatives addressing the most pressing problems currently afflicting the economy will be the most distinguishing feature relatively to the previous budgets. For example, the banking sector should be reformed in a way that it could play a supportive role in achieving a higher economic growth. Budget proposed for forming banking commission in order to bring order in the sector. Weak banks and Non-Banking Financial Institutions (NBFI) needs merger as soon as possible rather than putting them in the incubator for years.

There should not be any more new bank and NBFI in the country at the moment. New banks, new NBFIs, new insurance companies, new Universities, new medical colleges are nothing but a kind of chronic political diseases in many cases. Instead of increase of numbers focus must be on increase of quality. Without quality increase of quantity will simply multiply unemployment and inefficiency. We can see inefficiency prevails seriously in almost all cases either in public or in private.

April-June 2019 | 25

Like in the previous years, more funds will be injected into state-run banks despite their continued financial irregularities and irresponsible lending practices. In the last 10 years, the government injected more than Tk. 17500 crore of taxpayers’ money into the state-run banks, although there has been hardly any improvement in their governance and lending practices. In the current fiscal year, some Tk. 1,500 crore has been set aside to bail-out? these banks.

Seven state-run banks waived Tk. 1200cr interest’.

State-run commercial and specialized banks waived interest amounting to Tk. 1,198.24 crore last year. The banks waived interest against 6,163 loans accounts, Agrani Bank Limited waived the highest Tk. 494 crore against 2008 loans, Bangladesh Krishi Bank waived Tk. 435 crore against 66 loans, Rupali Bank Limited Tk. 134 crore against 203 loans, Sonali Bank Limited Tk. 73 crore against 14 loans, Janata Bank Limited Tk. 54 crore against 2473 loans, Rajshahi Krishi Unnayan Bank Tk. 4.35 crore against 1380 loans and BASIC Bank Limited waived Tk. 1.69 crore against 19 loans.

Names of top? 300 loan defaulters were disclosed. Tk. 50,942cr loan defaulted by them. The finance minister also provided a list of 14,617 individuals and institutions who have outstanding loans of over Tk. five crore since 2009.These individuals and institutions have sanction limit of Tk. 1,741,348 crore, outstanding loan of Tk. 784624 crore, classified amount Tk. 110541 and defaulted loan Tk. 100,183 crore.

Arithmetical Dilemma in Budget measures There are some populist measures in the budget.

Incentives are given to remitters for the first time to encourage them to send remittance through official channels instead of via hundi. This will devalue local currency @Tk. 2/US$. Besides, there is a separate fund of Tk. 100 crore for business start-ups to alleviate? youth unemployment. Interestingly trade license renewal fee has been increased by 500%, we failed to understand the rationale of such a pole vault, while there is a fund for creating new self employment and initiative for making 1 crore new tax payers. The government also plans to bring an additional 14 lakh people under the social safety net programs. and will bring 1 crore new taxpayers under its tax net. For this purpose, the NBR will conduct a survey on households in Dhaka and other big cities to get a picture of how many eligible taxpayers are out of the tax net.

The government has already allocated one-fourth of the development budget to 14 mega projects, including Padma Bridge, metro rail and Rooppur Nuclear Power Plant. Standard VAT rate of 15%, with

26 | April-June 2019

reduced rates of 5 %, 7.5% and 10% respectively for specific goods and services. After a dilly dally for seven years, the government is going to implement the new VAT law this time, and there are several VAT rates, as in the previous laws. The original VAT law 2012 was drafted after much consultation with experts and stakeholders. Had that been implemented as was passed by the parliament in 2012, Bangladesh would have been a pioneer in modern VAT laws.

The government has finally implementing much-talked-about ‘Value Added Tax (VAT) and Supplementary duty Act 2012’ since July 1. The government enacted the law seven years ago but had to retract its implementation amid protests from business community several times demanding some reforms. To ensure effective implementation of this Act, government will provide all types of logistical supports including necessary manpower. The budget excluded traders having annual turnover up to Tk50 lakh from the VAT net and proposed 4% turnover tax for the small traders having turnover up to Tk.3,00,00,000.The VAT registration threshold will be Tk.3 crore, which was Tk80 lakh earlier. The minister proposed to continue existing VAT and supplementary duty exemptions given to the heavy industries like automobiles, refrigerators, freezers, air conditioners, motorcycles, mobile industries for the growth and development of heavy domestic industry and export sector. The exemptions further extended to the Rooppur Nuclear Power Plant project on the procurement of services from freight forwarders, clearing and forwarding agencies, insurance companies, suppliers and banking services, though unfortunately the famous ‘Pillow corruption’ for about Tk. 36 crore yet to be settled.

However, products, which were out of net, such as plastic and aluminum items, soybean oil, palm oil, sunflower oil, mustard oil are brought under the VAT net. The budget includes VAT on astrologists, marriage media services and on the supply of entertainment programs, serials, drama and tele-films to be broadcasted on television channels and online media such as YouTube and Face book. This is a good step of course.

Black Money Whitening Dilemma: No scope to invest in land Parliament passed the tax measures for fiscal 2019-20, scrapping the opportunity to invest black money to buy land. This scope was proposed in the Finance Bill 2019, placed in parliament on June 13. However, the scope for investing black money in construction, in

ARTICLE special economic zones, Hi-Tech parks as well as for buying residential buildings or apartments will remain.

The House also reduced tax on retained earnings and reserves of companies to 10 percent from initially-proposed 15 percent in the face of outcry from businesses, who argued that the step would discourage business expansion and investment.

Lawmakers also passed the proposal to cut tax on stock dividend to 10 percent, a move taken to bolster confidence of small investors. From our past experience black money whitening did not yield any good results, rather it has brought many complications from the ethical point of view and governments “zero corruption tolerance” slogan. Dhaka Stock Exchange also recommended dirty money for investment in Share market.

and damaging to the image of the government; it could be effective for savings certificates bought from 01 July 2019. Over enthusiasm may have caused this damage to the reputation of the government.

Tax Dilemma:

Personal Income tax exemption limit has not been increased for last 5 years while inflation is said to be 5.5%/annum, under this premises cumulative figure comes to about Tk. 400,000 (based on 5.5% govt. inflation estimate). Surprisingly minimum net wealth exemption limit has been increased to Tk.3 crore from Tk. 2.25 crore; we do not understand the rationale for this kind of arithmetical dilemma. Composition of individual & Corporate tax is 40:60. There are Tk. 32000 crore revenue unaccounted for/outstanding due to unsettled legal suits of about 22282 court cases. At the rate of 10% interest per annum the missing interest alone is Tk.3200 crore in a year and for 10 years the figure comes to Tk. 32000 crore, while savings certificate is under the tax knife. Some big multinational companies are big tax dozers, having billions of Taka unrealized tax, but no proper actions for years. Additional payment for inward foreign remittance is nothing but a matter of inflationary pressure in the economy. Following table shows individual tax-free limit and the lowest tax slab in some neighboring countries:

Parliament passed proposal to impose specific tax at Tk. 4 for each kilogram of yarns used by weavers instead of previously proposed 5 percent VAT. It also approved the proposal to rationalize import duty on papers that are not produced by domestic manufacturers. There was upbeat about accelerated GDP growth that GDP growth will of course be double digit by 2024, expecting that the economy would grow by 10 percent annually from 2024 to 2030 and onward.

We have a debt-GDP ratio less than 34 percent. To ensure universal health care with allocation of less than one percent of GDP for health sector. Allocation of only 2 per cent of GDP in education which was much lower than UNESCO prescription for the sector. The finance minister proposed Tk. 61,118 crore for education for the next fiscal year. Quality education and quality health services are two major issues for the country and to help reduce unemployment and national health cost. There should have been more allocation and focus both for health and education. If the medicine quality is not good, equipment is not available and not of good quality health cost and health hazards are simply multiplied. Quality of locally consumed medicines and imported medicines to be ensured, quality of exported medicines and locally consumed medicines to be cross examined to see if there are any quality difference(s).

It is unfortunate that increasing tax on savings certificate from 5% to 10% in the budget for 2019-20 fiscal year with retro effect is sheer unfair, while giving various benefits to businessmen, big personal tax payers, increasing the salaries and benefits of government employees including teachers and also giving various facilities to different sectors. Retro effect of 10% tax on savings certificates is certainly illegal

Gold fair is a success story; collected Tk. 183 crore @Tk. 1000 per 11.664gram (1 Vori) as whitening cost.

Jewelers association said there are many more black golds in the country for which the time should have been extended up to December 2019. Gold has become WHITE GOLD! Gold import policy is also there now. This is the first of its kind in Bangladesh.

Interestingly the following day after the expiry of the whitening deadline, gold price was increased by Tk. 1600 per 11.664 gram (1 Vori) and now almost in very week gold price is going up.

Country

Tax free limit

Bangladesh India Pakistan Thailand

Tk. 2.5 lakh INR 2.5 lakh Rs.6 lakh Bath 1.5 lakh

Lowest tax rate in % 10 5 5 5

Revenue collection from LTU is estimated at 11.2% due to marginal increase of VAT&SD (4.3%). Tax holiday facilities are appreciable. TIN for utility Connection except for REB connection is a good step. VAT on Google and Face book and so forth, they swindle Bangladesh more than Tk. 2000 crore/year, may be a good case for money laundering investigation. Focus thoroughly on big issues and go for serious

April-June 2019 | 27

punishment, you need not to punish every one. Varying VAT rates (5% on 91 goods & services, 7.5% on 12 goods and services, 10% on 20 goods and servicesall for specific items and 15%) & 5% VAT on online shopping is a good initiative. Motor Cycle duty advantage while (65% without license)! And causing hundreds of accidents every day.

No specific budgetary allocation for Ethnic community like Santal, Dalit etc. while 2% of the total population is of this category and there should be special budgetary allocation at a proportionate to the population.

Legalizing the illegal money will encourage more corruption, no significant amount was legalized in the past, they believe in Money laundering only, rather than whitening black money only at a nominal rate (10%) of tax. Swiss bank deposit increased significantly, which is a good case for money laundering investigation. Fair fax investigation report? for which the people of this country paid huge amount of fees is in the deep freezing zone for decades now.

Banking Sector in a big shamble, Punishment required both for loan defaulters and the corrupt bankers, mainly big ones, as small ones mostly follow the instructions of the big bosses and remain under job threats.

Interestingly 2% of the total loan can be paid for Rescheduling of loan for 10 years, what a good opportunity for the loan defaulters. This will encourage for more loan being defaulted. VAT and Exercise duty collected by banks from the customers should be linked with NBR revenue collection software for direct credit as soon as such amounts are collected from the customers. This could be a case of VAT/Exercise duty evasion by banks. Loan Defaulters list seems to be incomplete and appears to be an escape goat for big defaulters! Health and Education budget is reduced; Agriculture remains same (Tk.9000 crore-20.8%) Education must focus on Vocational & Skill development for employment creation. Tk. 1000 crore for startup fund for new entrepreneur- good step.

Before such funds are disbursed, entrepreneurship training must be ensured and a fund for the purpose is to be ensured.

There must not be any more private and government universities for general education and medical colleges; there must be a pause for general education and go for only technical and vocational education for next 10 years as China did in the past for which China is having the largest self-employed sector in the world.

A big percentage (about 43%) of the educated young people is unemployed in Bangladesh now. Quality of education is a crying need now both in private and public universities.

TDS on contractors/supplier’s bill reduced from 7% to 5%, a case of business friendliness! Unusual rewards for usual work!! For VAT realizers (not for the VAT & Tax divisions). The VAT & SD clause# 4691), VAT law

28 | April-June 2019

section 83, and VAT Law 126(kha) 91) (kha) to be revisited. In 2019-20 budget VAT collection estimated at Tk. 1 lakh 23 thousand 67 crore, in that case the incentive fund will be of Tk.600 crore@0.5%for VAT collectors only! 5% Tax rebate for employers employing physically challenged person and having 10% of total employees, a good initiative of course, but needs proper judgment. Otherwise this will again become giving tax exemption to big businesses with the plea of creating more employment, but no such indication is evidenced so far. There must be a cost benefit analysis of such exceptions vs. employment created, say for last 20 years.

SME yearly turnover tax exemption increased from Tk.36 lac to Tk.50 lac, a good step of course. 10,000 university boys will be temporarily recruited for identifying new tax payers! Why not Chartered Secretaries are given the chance for ITP, who are professionally competent. There must be thorough screening of such boys against drug abuse, honesty and character-a character certificate is not enough, else there will be thousands of abuses and confrontations all over the country, while the entire social system, ethic has almost collapsed and may deteriorate further.

Heavy Tax and VAT to be imposed on Tobacco to save the Nation from serious health hazards/risks and thus saving health services cost& making the nation healthy.

In the next 10 years the number people will die for smoking/tobacco consumption, 80% will be from developing countries, where Bangladesh ranks at the top.VAT exempted for traders having annual turnover up to Tk.50 lakh, a good step. Climate Change budget reduced to 7.8% from 8.1% in the previous budget, while it is a prime issue globally, where Bangladesh ranks among the top 5 risky countries. Unfortunately, some pretended? Intellectuals (self-proclaimed or intellectual- ship thrusted upon them by some vested quarters) take the shape of the container they are put in, like liquid, they are more liquid than water and give opinions based on their unethical interests and shape of the container they are put in. Intellectual corruption is very dangerous. They are the most dangerous species in a society as they are like adis (dengue) mosquitoes.

Supplementary budget (Tk. 15,166 crore) was passed in the parliament, which has always been a questionable issue to many students of Economics; this can mean many things including serious budgetary weaknesses and last minute purchase rush without having proper procedures. This should be stopped forthwith.

» About the Author Fellow Member & Former Senior Vice President of the Institute

ARTICLE

Retrospective Tax Laws and unpredictability of Tax System of Bangladesh Kazi Ashiqur Rahman FCS

I

INTRODUCTION

Every year the national budget is presented before the Parliament which covers aspects such as how the previous year has gone and what are the proposals for the next financial year in terms of revenue allocation to various sectors, changes relating to tax law provisions for both direct and indirect tax etc.

Such changes in tax law, generally termed as ‘amendments’, are proposed keeping in mind on going developments, welfare of taxpayers, loopholes which could not be plugged in earlier and also representations received by various stakeholders.

Amendment to the income tax law is essentially a change or modification in the way things are being carried out currently. Any changes usually are prospective in nature. But we witness, that Finance Acts have been indulging in the practice of effecting amendments that are retrospectively applicable. It is very clear that a retrospective tax law is one that takes effect from a date before it is passed while new law normally applies to the future, not the past.

PROSPECTIVE AND RETROSPECTIVE AMENDMENTS While prospective amendments are comparatively easy to handle and accepted based on its nature of application, retrospective amendments create lot of confusion and complexity and are not easily acceptable. Therefore, date of application of tax laws play a major role to determine its impact on taxpayers and be prepared and plan their next move.

As already mentioned that retrospective tax is not so easily welcomed by taxpayers as it creates an additional tax on the transaction which is already concluded when the provisions of tax laws were different. Taxpayer would have planned their finance and tax based on the tax law as it existed at that time.

For example, individuals earning more than Tk. 15,00,000/- in a year have to bear impact of higher taxation due to reduction of tax credit on investment

and exclusion of leave fare assistance from the definition of perquisite in the Finance Act 2019 and in retrospective effect from the income year 2018-2019 and corresponding to assessment year 2019-2020 attracts additional tax for corporates. These will be compulsorily subject to payment of excess tax for which tax payers has to go for an adjustment in their books of accounts.

UNPREDICTABILITY OF THE TAX SYSTEM The controversy was that whether it is practical to impose a tax with retrospective effect. A company’s business decisions are based upon the tax situation that exists today. It is very difficult to organize its activities today based on a future law that will be made applicable from today.

Hence retrospective implementation is certainly not a good move.

Retrospective taxation is not only unpleasant to the taxpayers, it also undermines the government’s credibility and the rule of law and introduces unpredictability into the tax system. Unpredictability of tax system may have adverse impact on taxpayers.

Because, every taxpayer irrespective of class, deserve to have prospective effect as they will have the option to plan their tax issues and they can move accordingly.

RETROSPECTIVE APPLICABILITY OF INCOME TAX AMENDMENTS IN BANGLADESH In fact, over the past years, income tax authorities have changed their mind and went for retrospective amendments with retrospective effect. It has an adverse impact on all those taxpayers who arrange their affairs according to the prevailing status of the tax laws will lose their trust in the existing tax laws.

Based on the Finance Act, unless otherwise specified, the amendments are supposed to be implemented in the following manner: •

Any changes in relation to corporate tax rates: it applies retrospectively starting from 1st July of previous year;

April-June 2019 | 29

•

Any changes in relation to individual tax rates: it applies retrospectively starting from 1st July of previous year;

•

•

Any changes other than tax rates. It applies retrospectively starting from 1st July of previous year and in few cases prospectively starting from 1st July of current year.

CONCLUSION & RECOMMENDATION

ADVERSE IMPACT ON TAXPAYERS •

Once financial statements are finalized and audited, passed by the shareholders in the Annual General Meeting and accordingly dividend is paid, any such amendment applied retrospectively, distorts the whole system and is not at all rational;

•

If tax rate increases or tax incentives decreases in the Finance Act with retrospective effect, there is every possibility of giving less advance tax which is violation of tax law; and if tax rate decreases or tax incentives increases, taxpayer will not be able to get refund of excess payment;

30 | April-June 2019

Retrospective amendment and retrospective tax brings distortion in discipline of tax planning of a company and individual as well.

To sum up, any retrospective amendment which benefits taxpayers is welcomed and non-beneficial retrospective amendment/retrospective tax which in nature is not acceptable. However, any unreasonable and unexpected new tax on a transaction which is closed in light of the then existing law would be unfair and cause of disruption of tax planning and financial management which is not desirable at all. So that any changes incorporated in the Finance Act measures should always be applicable prospectively. The proposed change will bring a high level of discipline in tax planning, satisfying the authority. An ideal tax system should be predictable, certain and stable.

» About the Author Fellow Member of the Institute

ARTICLE

Budget 2019-20 : New Directions are Surging Ahead Bipul Kumar Bhowmik FCS

T

The government sets several milestones when it prepares budgets for which the current one also suits the trend. These included among others, growth of gross domestic product (GDP) to 10 percent, maintaining price stability, enhancing rate of investment to at least 30 percent of GDP, undertake special program to mitigate the power and energy sector deficit, curbing corruption, attaching highest priority to establish digital Bangladesh. So, a question can rationally be placed before the government – where do we now stand at? Will this aspiring budget be able to craft realistic picture as we expect for our nation? Will it play trajectory role for our next sustainable development initiatives followed by its series of sequels. Few views have been depicted in this write-up to have insights of the proposed budget and to rationalize our expectations from it.

Finance Minister (FM) unveiled a Tk. 5.23 trillion spending plan for fiscal 2019-20, which is an 18 percent increase from the revised budget of the outgoing fiscal year. He stressed tax collection as the ratio of Bangladesh’s national revenue collection to GDP is lower than that of other countries. In the speech of budget titled “Bangladesh on a Pathway to Prosperity Time is Ours, Time for Bangladesh”, FM said “From now on, we are determined to raise the tax/GDP ratio from its current 10 percent to 14 percent in next two years,”. However, this budget provides a positive continuation of growth-development success story of the decade 2009-2018 and it has come up with definite target numbers for the next four years also. Those numbers reflect commitment and are the strongest part of the budget. Other numbers, however, are pretty structured as per the budgetary framework of the ministry of finance, which the FM might not be able to manoeuvre within such a short span of time.

This budget indeed depicts two most difficult goals – one is raising the GDP growth from 8 percent to 10 percent by 2024, and the rest is increasing the Tax-GDP share from 10 percent to 14 percent. We are hopeful for the right delivery of the first one whereas rest one essentially deserves some changes to be

introduced pertaining to tax collection within a short span of time structurally. Most importantly, the ratio of operating and development expenditures which is 61 to 39, means that new direction is surging ahead gradually to allocate almost 50 percent of the budget for development programmes by 2025. We invariably need a rising proportion of the development budget for its march toward a developed country by 2041. And to ensure cost-effective implementation of budget in light of the above goal and to avoid waste of resources and time as well, mega development projects must be outsourced internationally whereas the domestic financing which is going to be managed from Sanchaypatra — the most expensive way of deficit financing in the world — also needs to be revived in the context of interest burden that is expanding phenomenally. There is a strong plea not to touch the dividend rate on the savings certificates and the thereon as it’s a social investment and inevitably, suggest for steps to be taken to reduce misuse rather than hurt the scheme.

The allocation for MPO, reactivation of the VAT and Supplementary Duty Act, 2012 including the multiple tax rates, statement to introduce a Crop Insurance, allocation of fund for start-ups to finance, direction to target oriented employment generation and the Government’s interest to hire expertise from foreign lands (particularly, Bengali expatriates) are praiseworthy. Approach to legalize black money by allowing it to be invested in industries with an aim to boost private investment is strongly opposed by Bangladesh's business community by showing its stance against any scheme of whitening the black money, but supportive of fiscal measure to legalize undisclosed and untaxed money though Bangladesh Economic Association (BEA) at its budget proposals sought budgetary measures to legalize and bring back black money to the formal economy.

Budget allocates Tk. 257.32 billion for the two wings of the health ministry - health services division, and the health education and family welfare division – for the next fiscal. The allocation was Tk. 223.36 billion in the

April-June 2019 | 31

last fiscal. Currently, 12 ministries and divisions are implementing programmes related to health and family welfare and particularly, the benefits of activities undertaken by the government in education, health and human resource development sectors are “now visible” as different social indicators Bangladesh has made major advancements. So, budget needs to be allocated more for the above area(s) to ensure and maintain sustainable growth and development in the long term.

We are in the ladder to prosperity. Growth of per capita income, RMG-Knitwear exports etc. are in progressive trend. According to the PPP (purchasing power parity) dollar, the country is now 30th largest economy of the world and would climb to the 23rd position in the next two and a half decades. Amongst all these vibes as stated above, there is a need to do focus on full-fledge implementation of budget rationally. The budget implementation rate has declined from 87 per cent in 2011-12 to 78 per cent in 2017-18. Although the Budget size (expenditure/GDP Ratio has more or less stabilized- around 18 plus, the ideal ratio being 20, the Total Revenue/GDP ratio has not moved up much from 10.

Budget for 2019-20 needs to be more emphasis on reaching the benefit of the development to the common people at a time when the income gap in the society is galloping. Higher growth is not enough if the lower section of the society remain largely deprived.

The country’s development landscape is quite bright, remittance is high, GDP growth is pretty good and inflation is under control. What is important is that the budget should ensure distributive justice to all.

Development should not remain accumulated of rich in the hands of few.

Development of SMEs needs to be considered on high priority in the budget because it can only create the number of jobs for the huge unemployed youths entering the job markets every year. Budget also needs to provide resources to create a class of young entrepreneurs and smooth out road to

32

entrepreneurship categorically. In our country, expansion of rural economy is the key to removing rural poverty. Expansion of SMEs is therefore very important, particularly at rural level to bring work to people and stop migrating to cities.

The problems in the banking system must be fixed. It’s a long awaiting issue. Default loans must lower so that banks can make fresh loans to allow private sector to make investment in new projects. The loan problems can be largely overcome by carefully avoiding corruption while sanctioning loans to business lacking credibility. Single digit interest may save many loans from falling into default. Moreover, the government’s lower dependency on banks would be great for private sector which is having the capacity to produce more for local and export markets and create the necessary jobs.

A big budget does not mean big development. What is important is that it must be realistic and implementable.

Clearly spelled out guidelines on how to achieve budgetary targets can play facilitators role effectively to ensure achieving results. Experience shows that successful implementation of the budget is explicitly pivoted on NBR’s ability to raise additional revenues (as compare to last fiscal year), a road map of implementation in the face of risks – known and unanticipated and finally, proper (adequate) response and level of assurance for transparency and accountability. In the market economy that Bangladesh is pursuing, creation of disparity is inevitable unless there is social security framework. So, the disparity in income, wealth and opportunity – the most important considerations – exists interpersonally and interregional as well has to be addressed in fully realizing the dream to establish a welfare state, free of poverty, illiteracy, homelessness, diseases and exploitation.

| April-June 2019

» About the Author Fellow Member of the Institute

ARTICLE

The National Budget of FY 2019-20: Big Budget for Big Achievement Mohammad Shahajahan FCS

I

NTRODUCTION:

Bearing in mind the daunting challenge of global meltdown which was started with 2008 recession, Bangladesh declared ‘Vision 2021’, where set a number of ambitious targets in education, power and healthcare covering cent percent population in the country. Poverty reduction and digital Bangladesh will be elevated to the status of a Middle Income Country by 2024. A budget is a financial plan for the coming fiscal year to achieve the targets declared in Vision 2021. Bangladesh has been implementing big budget since 2009 and achieved tremendous success in in different indicators. The national budget of FY 2019-20 is the biggest budget which is targeting to achieve the big targets though there remains criticism. But the ultimate success is lying in the effective implementation of such big budget.

LAST DECADE ACHIEVEMENT: During the last decade Bangladesh has achieved tremendous success in different sectors by implementing big budgets since 2009. Presently almost cent percent boys and girls in the country go to school, the rate of drop-outs has also reduced.

Electricity has reached almost every household long before 2021. Community clinics have been established across the country. The poverty line has dropped from 40 percent in 2005 to 21 percent. Extreme poverty dropped from 25 percent to 11 percent. Inflation has been kept at a tolerable level despite the sustained high growth rates in our economy. We have been able to attract the attention of the world community by achieving Millennium Development Goals (MDGs) surpassing the performance of other countries. We have elevated ourselves from the status of a poor, least developed country to that of a lower middle income country. The achievements by indicators in comparison to 2006 are as follows:

Indicator

FY 2005-06

Now

Change

Imports

US$ 14.7 billion

US$ 58.9 billion

301%

Exports

US$ 10.5 billion

US$ 37 billion

252%

Remi�ance

US$ 4.9 billion

US$ 15 billion

206%

Foreign Exchange Reserve

US$ 3.5 billion

US$ 33 billion

843%

Investment to GDP Ra�o

26%

31.5%

5.5%

US$ 14.8 billion

US$ 70.8 billion

378% -12%

Private Investment Debt-GDP Ra�o

44%

32%

Infant Mortality/1000

45

24

-21

Medical Colleges

46

111

141%

Life Expectancy at birth

65 years

72.8 years

7.8 years

Literacy rate

53.7%

72.9%

19.2%

Dropout rate

50%

18%

-32%

Technical educa�on

2%

17%

15%

No. of Universi�es

80

148

85%

4,385 MW

21,629 MW

483%

47%

93%

46%

1,443 Million c�.

2,746 Million c�.

90%

5000

5000

Power Genera�on Capacity Electricity Connec�on Gas supply per day Digital centers in Unions & Municipal areas Op�cal fiber cable

23,500 km

23500

9 crore

More than 8 crore

HiTech Parks

8

8

Satellite

1

1

Tk. 42000 crore

Tk. 3,16,000 crore

652%

US$ 72 billion

US$ 302.4 billion

320%

Internet users

Na�onal Revenue Size of GDP

Less than 1 crore

NATIONAL BUDGET 2019-20: Estimate of the proposed income and expenditure of the fiscal year 2019-20, which has been presented in the following table: (Amount in BDT crore) Sector Total Revenue NBR Tax Non NBR Tax Non Tax Receipts Total Expenditure Non Development Revenue Expenditure Development Expenditure Annual Development Programme Other Expenditure Budget Deficit External Source Financing (including Grants) Domes�c Financing Bank Borrowing Non-Bank Borrowing

Es�mate FY 2019-20

Revised FY 2018-19

377,810

316,613

325,600 14,500 37,710 523,190

280,000 9,600 27,013 442,541

277,934

247,747

211,683

173,449

202,721

167,000

33,573

21,345

-145,380 68,016 77,363 47,364 29,999

-125,928 47,184 78,745 30,895 47,850

Change (%) 19.33 16.29 51.04 39.60 18.22 12.18 22.04 21.39 57.29 44.15 -1.76 53.31 -37.31

(Source: Budget Speech, 2019-20)

April-June 2019 | 33

THE NATIONAL BUDGET 2019-20 AIMS AT BIG ACHIEVEMENT: Broad fiscal framework for FY2019-20 has some positive indication like revenue(19.3%) projected to grow faster than public expenditure (18.2%), total budget expenditure is set at 18.1% of GDP comparing to 17.4% in Revised Budget of FY 2018-19, revenue income will be 13.1% of GDP compare to 12.5% in Revised Budget of FY2018-19, development expenditure (22.0%) programmed to grow faster than operating expenditure 16.3%, Annual Development Program 38.7% of total public expenditure compare to 37.7% in the Revised Budget of FY 2018-19, Budget deficit has been projected at 5% of GDP which is as same as Revised Budget of FY2018-19, Balance in financing the budget deficit is likely to be restored through limited foreign financing and increased domestic bank borrowing by 53.3%, NSD sales is programmed to be reduced substantially but no extensive measure is indicated, gross foreign aid requirement will be around USD 9.6 billion compare to USD 6.9 billion in Revised Budget of FY2018-19. Much will depend on project aid utilization of ADP – about 97% of total foreign resources are for ADP projects.

Budget of FY2019-20 targets an additional Tk. 61,197 crore revenue with a 19.3% growth over Revised Budget FY2018-19. NBR tax targets to grow by 16.3% compare to Revised Budget of FY 2018-19. Non-tax revenue is expected to increase 51.04% and Non Tax Receipts is expected to increase 39.6% over the Revised Budget of FY 2018-19. Despite implementing long awaited new VAT Act, VAT is expected to grow by 17.4% compared to income tax 19.7%, hence budget is more reliance on income tax. Composition of individual and corporate income tax seems to remain the same ratio (40:60) as previous FY. Total Expenditure is expected to increase 18.22%.

Non-development expenditure estimates 12.18% more than Revised Budget of FY 2018-19 and other expenditure is 57.29% more than Revised Budget of FY 2018-19. Public services and interest payments account for 46.2% of total incremental expenditure.

Investments in Equities is expected to Tk. 25,063 crore in FY 2019-20 which is almost double to Tk. 13,883 crore in Revised Budget of FY 2018-19. Tk. 20,537 has been kept for providing loan to autonomous bodies.

Total allocation for Subsidy and incentives in FY2019-20 estimates to Tk. 43,230 crore which 8.3% of budget and 1.5% of GDP. Therefore it accounts 24.5% increase from Revised Budget FY2018-19 and the highest in last decade. Over the last seven fiscal years,

34 | April-June 2019

the composition of subsidy has shifted from agriculture and BPC towards Power and Gas; and Remittance emerged as a new component which get 7% of total allocation. Agriculture received 20.8% of the total allocation (Tk. 9,000 crore) – a similar allocation since FY14 though in the last three fiscal years, it has never been possible to fully spend. Hence government has proposed that subsidies will be provided towards mechanization of harvesting.

The budget of FY2019-20 has proposed new fiscal incentives for the export sector. Cash incentive of 1% for the RMG exports which are not receiving the prevailing 4% incentive. A 2% cash incentive has been proposed to increase the remittance inflow via formal channels. These two cash incentives are equivalent to 65.4% of agricultural subsidy in FY2019-20.

Annual Development Program is proposed Tk. 2,02,721 crore for FY2019-20 which is 7% of GDP in FY2019-20 has an increasing trend as ADP was 5.3% of GDP in FY2017-18 (Actual) and ADP was 6.6% of GDP in FY2018-19 (RADP). Project Aid (PA) to finance 35.4% of total ADP in FY2019-20 compare to 30.5% in RADP of FY2018-19. Concentration ratio of top 5 sectors (Transport; Power, Physical Planning, Water Supply & Housing; Education & Religious Affairs; Science, Information & Communication Technology) has increased and these sectors have received 70.1% of total ADP allocation compare to 67.7% of ADP in FY 2018-19. Transport Sector once again received the highest allocation (26% of total) for the highest number of projects (257).

OBSERVATIONS OF NATIONAL BUDGET 2019-20: 1. No change in the tax slabs or tax rates of personal income tax and tax-free income threshold for personal income stays same at Tk. 2.5 lakh. But minimum net wealth exemption limit has been increased to Tk. 3 crore from Tk. 2.25 crore which leaves a number of rich people out of the surcharge net. On the other hand corporate tax structure remains unchanged.

2. The proposed changes in tax holiday facilities will be beneficial in terms of balanced regional development and domestic industry but existing provisions on undisclosed money under Special tax treatment (19BBBBB) has been made more relaxed by reducing tax rates to invest in real estate under.

New opportunity is given for setting up industrial undertaking investment in economic zone and hi-tech park by paying income tax at 10% on the invested amount along with regular tax (19DD)

ARTICLE which will not yield much investment but will discourage regular taxpayers. All the above provisions allow source of fund to remain undisclosed and will encourage immoral/illegal activities.

3. Tax deduction at source (TDS) on the bill of contractors and suppliers has been rearranged by reducing the number of slabs from 6 to 4 and also the rates for the highest slab has decreased from 7% to 5%.

4. Proposed 15% tax on listed company’s retained earnings and reserves (in excess of 50% of the paid up capital) might have adverse impact on investment.

5. Increasing the number of income taxpayers to more than 1 crore by the next few years but any time bound action plan is missing in this regard.

6. Introduction of new VAT law and coverage of VAT had been widened. VAT registration threshold has been increased from Tk. 80 lakh to Tk. 3 crore.

Turnover tax rate increased to 4% for traders with turnover threshold between Tk. 50 lakh to Tk. 3 crore. Along with the standard VAT rate of 15%, there will be reduced rates of 5% (on 91 goods and services), 7.5% (on 12 goods and services) and 10% (on 20 goods and services) for specific goods and services.

7. VAT on clothing outlets both branded and non-branded will increase from 5% to 7.5%will raise price of clothing. VAT on manufacturing of furniture raised from 7% to 7.5% may discourage local industry. 5% VAT on both reading glass and frame (plastic frame and metal frame) will increase health support cost.

8. SD of 45% was kept on sanitary towels (pads) and tampons which should be reduced considering the adverse impact on female hygiene.

9. Additional 5% CD on milk powder – will provide protection to domestic industries but will entail higher costs to consumers particularly low and middle income families with children.

10. Export duty for building bricks decreased from 25% to 15% but measures need to be taken to reduce environmental risks.

11. Export duty on unmanufactured tobacco and tobacco refuse was decreased from 10% to 0% which is incentivizing the production of a harmful product.

CONCLUSION AND RECOMMENDATION: The national budget of FY 2019-20 is the biggest budget in the history of Bangladesh. The present government is looking forward to implement such big budget for achieving the targets of Vision 2021. It has concentration on development of specific sectors, benefiting balanced regional development and home industry, transportation, power generation, education and communications. But there are some criticism of the national budget of FY 2019-20 like no incentive for personal tax prayer, leaves a number of rich people out of the surcharge net, encourage immoral/ illegal activities by relaxing existing provisions on undisclosed money, 15% tax on listed company’s retained earnings and reserves, essential commodity prices likely increase due to higher VAT and SD imposition on these, etc. The government should take time bound action plan to implement such big national budget by caring the interest of the people of Bangladesh. At the same time government should be aware that no specific cluster is benefiting from the provision of the national budget of FY 2019-20 rather ensuring the equity.

» About the Author Fellow Member of the Institute

April-June 2019 | 35

Budget 2019-20: Reforms in Banking Sector Syed Mahmud Hasan ACS

O

VERVIEW OF THE NATIONAL BUDGET:

National Budgets contain the strategies for mobilization, allocation and disbursement of public money by means of fiscal and monetary operations with due consideration of political, economic and bureaucratic decision-making process.

Constitutionally, Bangladesh uses the term 'Annual Financial Statement', which shows the estimated receipts and expenditures of the government for a particular financial year. In accordance with the Constitutional provisions in the country, the budget is divided into Consolidated Fund (CF) and Public Account (PA) of the Republic.

The mammoth national budget for 2019-20 fiscal year was passed in the parliament. It is the biggest-ever national budget in Bangladesh’s history – amounting to a whopping Tk. 523,190 crore. The proposed budget aims at collecting Tk.377,810 crore as revenue in the new fiscal year. Of the amount, the National Board of Revenue (NBR) has been tasked to collect Tk. 325,600 crore, while non-NBR revenue collection target has been set at Tk.14,500 crore. Budget deficit is Tk.145,380 crore.

BANKING SECTOR IN BANGLADESH: Bangladesh's banking system is now faced with a slow-motion banking crisis principally at the government-run banks along with some private sector banks. The Finance Minister himself said the current banking and non-banking financial sectors are in the most vulnerable position. Six state-owned commercial banks account for almost a quarter of all bank assets in the country. The government appoints their chief executives and board members. The result is a huge amount of nonperforming loan (NPL) now estimated to be in excess of Tk 1.00 trillion (US$ 12 billion) (FE, 18/2/19). And half of it is owed to six state-owned banks requiring continuous recapitalization of these banks with tax-payers' money. The rest are owed to private and foreign-owned banks. The share of NPL now stands at close to 11.87 per cent of the total loan

36 | April-June 2019

portfolio in Q1 of 2019 from 10.30% in the previous quarter. When restructured and rescheduled loans are included, the share of NPL goes up to about 20 per cent. The volume of NPLs in the banking sector that in the eight out of nine years between 2010 and 2018, the amount of NPLs would be enough to pay for both the national education and health care expenditure.

NPL COMPARED TO GDP AND BUDGET ALLOCATIONS FOR EDUCATION AND HEALTH FY

2010 2011 2012 2013 2014 2015 2016 2017 2018

Amount of Gross Education Health NPL as % NPLs (in NPL as % of budget as % budget as % of GDP billion BDT) total loans of GDP of GDP

227 226 427 406 502 594 622 742 893

7.3 6.1 10.0 8.9 9.69 8.79 9.23 9.31 10.41

2.85 2.47 4.05 3.39 3.74 3.92 3.59 3.76 3.73

1.95 2.01 1.78 1.73 1.87 1.85 2.18 2.19 2.09

0.79 0.80 0.73 0.71 0.70 0.69 0.73 0.34 0.89

Source: Bangladesh Bureau of Statistics (BBS), Bangladesh Bank Annual Report (various years), Budget documents (various years), Ministry of Finance (various years).

Bangladesh Bank offered enormous waivers to loan defaulters with the purpose of accelerating debt servicing in the banking sector.

•

As per there cent instruction of the Central Bank dated 16 May 2019, defaulters are allowed to pay only a 2% down payment, which will provide more incentive for them to normalize baddebts.

Defaulters have to apply for the facility within 90 days of Circular No.5 (dated 16 May 2019)

•

The new loan rescheduling policy grants loan defaulters a generous 10 year loan repayment period, with a one year grace period

•

Moreover, as directed by Circular No.5 (dated 16 May 2019), there scheduled loans would have to be repaid at only 9% interest rate, which falls within the lowest range of interest rates

•

Furthermore, as mentioned in Circular No.5 (dated

ARTICLE 16 May 2019), the Central Bank has authorized banks to waive all interest for defaulters, depending on the bank-client relationship.

•

An additional incentive given to defaulters is the ‘One Time Exit’, which allows them to pay the bare minimum, which includes bank’s cost of funds and principal loan amount, with a condition of having to pay the outstanding amount within a year.

•

As mentioned in Circular No.4 (dated 16 May 2019), borrowers with a good record were offered a 10% rebate. The provision of 10% rebate to borrowers will be given if they have no record of bad loan default in the last one year.

These measures are likely to further aggravate the situation of NPL in the banking sector. Such special privileges offered to loan defaulters may lead to a moral hazard problem since it may encourage all borrowers to take greater risks.

PROPOSED REFORMS IN THE BANKING SECTOR: Finance Minister has suggested a number of reforms to bring back discipline in the banking sector. The proposals put forward in his budget speech include increasing capital (authorised and paid up) of banks gradually, amending Bank Company Act so that bank management can function as usual, without facing any conflict with other laws. He said the Bank Company Act will be amended so that amalgamation, merger and absorption of banks can be legally processed, if required. Stern measures will be taken against the willful defaulters of bank loans, adding that the government has been working to bring down the interest rates of bank loans to single digit to make our industries and businesses more competitive.

While announcing the reform proposals, he said no mentionable reform initiative was observed in some

areas, especially in the banking sector from the beginning. There was no exit route for the loan recipient if he/she fails to repay the bank loan. This time, exit for the loan recipient through effective insolvency and bankruptcy laws will be in place he said. We have heard for long about establishing a Bank Commission for bringing discipline in the banking and financial sector. Discussion will be done with all concerned in this matter and do the needful. He said the government has observed that no mentionable instruments were used in our financial sector. This has led banks to give long term loans by collecting short term deposits, he said, adding that this creates a mismatch and turn out to be critical sometimes and all necessary measures will be taken to remove such kind of mismatch.

Encourage instruments like Wage Earners' Bond, venture capital, treasury bond including a vibrant bond market. The government has proposed an incentive of two percent on money remitted by expatriate Bangladeshi to encourage bringing in foreign remittance through legal channels.

In Bangladesh, financial sector is dominated by banks.

In 2018 total asset of the banking sector was 62.5 per cent, and of non-bank financial institutions (NBFIs) 4.30 per cent of the gross domestic product (GDP) (GoB 2018; Bangladesh Bank 2018). The banking sector has flourished during the last three decades or so as a result of increased demand of the growing economy.

During the year banking sector has also undergone several reforms and fallen under the jurisdiction of a number of acts in the bid to improve the efficiency of the sector.

» About the Author Associate Member of the Institute

April-June 2019 | 37

Bangladesh National Budget: Major Economic Challenges for FY2019-2020 Md.Mizanur Rahman QCS

I

NTRODUCTION

“Bangladesh on a Pathway to Prosperity, Time is Ours, Time for Bangladesh” focusing on this theme Finance Minister A H M Mustafa Kamal, FCA placed the country’s 49th national budget of TK 5,23,190 crore with an ambition of 8.2% growth prospect for the fiscal year 2019-20 on 13th June, 2019. This is a remarkable milestone and record-breaking budget placed by the Finance Minister. This proposed budget has emphasized much on the sectors of social safety, employment creation, controlling price level, continuation of growth rate, controlling inflation rate as well as implementation of the spirit of the liberation war. Again, this proposed budget shows the pathway to become a developed country from the existing developing country status.

Moreover, in this budget , Finance Minister highlighted the socio-economic target for the upcoming years and shows the pathway how to implement these. Finance Minister tried to focus on different government activities from agriculture to industries, from communication to power generation, from education to employment.

•

Maintenance of prices of essential commodities at affordable level;

•

Shows the pathway to become a developed country within 2041;

•

Eradication of social discrimination;

•

To increase the per capital income;

•

To continue the economic progress in the upcoming years;

•

To ensure the highest level of accountability and transparency in every aspects of administration; and

•

Highest efforts to satisfy different stakeholders in the country.

BUDGET HIGHLIGHTS •

To bring all the tax payers under the tax net survey, bringing administrative reforms, making TIN compulsory for receiving different utility services;

•

Initiatives have been taken to introduce legal provisions concerning scanning of imports and exports. Steps have been already taken to set up the latest scanning systems in all customs, ports and customs stations;

•

10% tax has been imposed on stock dividends. As a result, it may coerce publicly listed companies to give cash dividend rather than stock dividend which will increase the return to investors in turn;

•

“National Savings Scheme Online Management System” is introduced which will facilitate monitoring and controlling of purchase limit of savings scheme;

•

Tax Deduction at Source on National Savings Certificates (NSC) interest has been increased from 5% to 10%;

KEY OBJECTIVES OF THE BUDGET FOR FY 2019-2020 •

High growth of revenue targeted for underwriting over reaching expenditure;

•

Enhanced the allocation for the social security sector;

•

Higher allocation for the building infrastructure to enhance capacities;

•

To achieve the targeted GDP;

•

To control the inflation rate;

•

To achieve the Sustainable Development Goals (SDG);

•

To execute the government economic policies;

•

To ensure food security;

•

Creation of employment opportunities;

38 | April-June 2019

physical

ARTICLE •

Crop insurance will be introduced to save the farmers;

•

Accident insurance for factory workers will be implemented;

•

Price of smoke less tobacco- zarda has been fixed at BD 30 per 10 grams from BDT 25 per 10 grams;

•

Source Tax on Oil Tanker Import (Not more than 20 years old) has been reduced to 2 % from existing 5%;

•

10 % Custom Duty has been proposed on the import of Milk & Cream in Powder, granules or solid form from existing 5% to protect the domestic industry;

•

Reduced Regulatory Duty from 20% to 10% on import of liquid Oxygen, Nitrogen, Argon and Carbon Di oxide for making life saving gases;

•

The budget also proposed to introduce insurance for the expatriate Bangladeshi workers and their families as they often face financial losses and risks due to accidents and various other causes;

•

The budget proposed the tax holiday facility to continue and also to include some potential manufacturing sectors such as agricultural machinery; furniture; home appliance - rice cooker, blender, washing machine etc.; mobile handset; toys; leather and leather goods; LED television; plastic recycling;

•

The government has a target of developing 100 economic zones that will ensure employment generation of 10 million people;

•

2% incentive will be given on the remittance;

•

Honorarium of the freedom fighter has been increased from 10000 to 12000;

•

100 crore taka “Start Up” fund has been created for the young entrepreneur.

IMPLEMENTATION OF NEW VAT LAW Implementation of the value Added Tax and Supplementary Duty Act, 2012 will be implemented from this year. Implementation of Automated Vat online project is in progress. Besides, NBR is working to set up Electronic Fiscal Device in every business organisation to make VAT collection more easy and transparent. Along with the standard VAT rate of 15

percent, there will be reduced rates of 5 percent, 7.5 percent and 10 percent for specific goods and services. As a special measure, considering the sensitivity of the product, the rate of VAT at the trading stage of pharmaceutical and petroleum products shall be 2.4 percent and 2 percent respectively.

ANALYSIS OF BUDGET DEFICIT The overall budget deficit will be Tk 1,45,380 crore, which is 5 percent of GDP like the previous year. In financing the deficit, Tk 68,016 crore will come from external sources and Tk. 77,363 crore from domestic sources. Tk 47,364 crore will come from the banking system and Tk 30,000 crore from savings certificates and other non-bank sources.

REVENUE GENERATION TARGET The total revenue collection has been estimated to be Tk 3,77,810 crore where the National Board of Revenue (NBR) will contribute Tk 3,25,660 crore tax revenue from non-NBR sources have been estimated at Tk 14,500 crore. Besides, non-tax revenue is estimated to be Tk. 37,710 crore.

REVENUE GENERATION TARGET (SECTOR WISE)

Particulars

Taka (Crore)

%

Taxes on Income, Profit and capital gain

113,912

21.8

Value Added Tax (VAT)

123,067

23.5

Supplementary Tax

48,153

9.20

Import Duty

36,498

6.90

3,971

0.80

NBR excluding tax

14,500

2.80

Revenue excluding tax

37,710

7.20

Foreign Aid

4,168

0.80

Foreign loan

63,848

12.2

Internal loan

77,363

14.8

523,190

100

NBR other tax

Total

April-June 2019 | 39

DISTRIBUTION OF RESOURCES (SECTOR WISE) Particulars Industrial & Economic Services

Allocation 3,890

Percentage 0.70%

Education Technology

79,486

15.2%

Interest

57,070

10.9%

Transportation & Communication

64,820

12.2%

Local Government & rural development

37,886

7.20%

Energy & power

28,050

5.40%

Health

25,733

4.90%

Agriculture

28,353

5.40%

Defence

32,101

6.10%

Public Administration

96,470

18.5%

Social Security & Safety

29,458

5.60%

Public order & safety

27,636

5.30%

Housing

6,603

1.30%

Recreation & religious offer

4,389

0.90%

Miscellaneous

1,245

0.20%

HINDRANCES OF THE IMPLEMENTATION OF THE BUDGET •

•

This budget has proposed that the government will take a loan of Tk 473.64 billion from the local banking system. But right now our Banks are not in a good position to manage this huge amount of money; The revenue target of Tk 3,778.10 billion has been set in the proposed budget which is very ambitious target and will create extra pressure on the National Board of Revenue (NBR);

•

This budget has proposed to formulate a Banking commission for the Banks. But no specific guideline has been given yet;

•

This year, the long-awaited VAT law will be implemented. Awareness should be created among the population about how the entire VAT system works, how VAT is calculated based on the different categories and so on;

•

•

No guideline has yet been formed about the incentive of remittance; Source tax on savings certificate has been increased from 5% to 10%.

40 | April-June 2019

MICROECONOMIC MECHANISMS OF THE BUDGET IMPLEMENTATION •

The implementation of the budget depends mainly on the revenue generation. The revenue is generated mainly from income tax and VAT. As per the record of National Board of Revenue (NBR), the total number of TIN (Tax Identification Number) holders in Bangladesh is 38 lac and the number is going up every month;

•

Awareness about paying tax has been increased;

•

National Board of revenue (NBR) intends to introduce Electronic device to prevent VAT dodging.

MACROECONOMIC MECHANISMS BUDGET IMPLEMENTATION

OF

THE

Only government can never be liable for the implementation of the budgets. It requires coordinated efforts. Economists and financial experts have developed 5 (Five) principles for the implementation of the budget: 1) Prioritization: Bring the resources are limited, projects should be started on the basis of priority, considering certain economics and financial parameter i.e. cost of capital, cost of debt, cost of investment, opportunity cost etc.; 2) Predictability: Predictability is the key principle that the government will consider to increase the private sector investment; 3) Increased transparency: Transparency implies more open reporting of budget execution so that any citizen can follow what is happening to the budgetary resources; both on revenue and expenditure; 4) Efficiency: Government should have the efficiency to make the people understand that for whom the budget has been formulated and who are the real beneficiary of the budget; 5) Sensitivity analysis: Before taking any project, government should do a sensitivity analysis based on accounting ratio; ROA, ROE, Cost of Capital employed etc.

ARTICLE BUDGET

•

Simplification of the VAT registration and collection process

Bangladesh is now a developing country. We have a motto to be a developed country within 2041. Some experts criticized that this is a budget of high ambition.

But the criticism of the critics regarding the budget is not true. It’s true that, it has a lot of challenges, but it does not mean, this budget is not implementable. Of course, it is implementable. Just transparency, accountability, integrity as well as good governance need to be ensured before the implementation of the budget. The budget proposed by the Finance Minister in the parliament is not final. So, there is a possibility to make necessary amendments by discussing the conflicting issues with the stakeholders.

•

Public-Private partnership to monitor the progress in key areas;

•

Simplification of tax collection process;

•

Foreign Aided Projects should be geared up;

•

While introducing new projects quality must be ensured;

•

Dependency reduced;

•

Moreover, the following recommendations need to be considered before implementation of the budget.

Emphasize issues;

•

Tendency of tax evasion should be strictly handled;

•

•

Transparency, accountability as well as good governance should be ensured;

•

Finally concerned authority should have good will to implement the budget.

HOW TO MAKE THE IMPLEMENTABLE?

•

PROPOSED

Total number of TIN (Tax Identification) holders in Bangladesh is 38 lac but only 16 lac holders pay tax regularly. It means 2/3 of the total holders do not pay tax that should be considered strictly; Slab of taxation should be reformed to bring all the TIN holders under the structure of tax;

•

22 lac TIN holders who does not pay tax, if they can be forced to pay tax, then dependency of VAT for the revenue generation will be reduced to a great extent;

•

Government need to use low cost borrowing;

•

An independent public expenditure commission need to set up;

•

An agricultural price commission need to set up;

•

Emphasize should be given on the budget implementation capacity;

•

The tax rate of Bangladesh is very high which need to be reduced gradually;

•

Budget should be business friendly;

•

Bank rate should be single digit;

•

The deficit budget should be managed tactfully;

•

Like banking sector, corporate tax should be reduced for all the sectors;

•

Emphasis should be given on the infrastructure development;

review

on on

banking

sector

should

be

assesses

friendly

institutional

CONCLUSION Once Bangladesh was considered as a country of “Bottomless Basket”. But today Bangladesh is considered as an emerging tiger and is widely recognized as a role model. Bangladesh has experienced one of the fastest poverty reduction rates in the world with a modest resource base. For the last few years Bangladesh has made a remarkable progress in the economy and recently up-graduated to the status of a developing country from least Developed Country (LDC). The whole world is surprisingly seeing the progress made by Bangladesh.

It’s GDP is increasing while inflation rate is quite tolerable. Now, Bangladesh is the 58th country who has its own satellite. Bangladesh is constructing the Padma bridge with their own capital. These are the parameters of the financial strength of Bangladesh economy. Now Bangladesh is moving to become a developed country within 2041. Simply implementation of Budget depends on revnue generation as expected in the Budget.

» About the Author Qualified Chartered Secretary of the Institute

April-June 2019 | 41

NOTIFICATION APRIL-JUNE 2019

ARTICLE April-June 2019 | 43

44 | April-June 2019

ARTICLE Please visit following link for detail: http://nbr.gov.bd/uploads/sros/VATSRO-1712.pdf

April-June 2019 | 45

46 | April-June 2019

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48 | April-June 2019

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50 | April-June 2019

ARTICLE April-June 2019 | 51

52 | April-June 2019

ARTICLE Please visit following link for detail: http://www.sec.gov.bd/slaws/Short-Sale_Rules,_2019.pdf

April-June 2019 | 53

Please visit following link for detail: http://www.sec.gov.bd/slaws/Exchange_Traded_Derivatives_Rules,_2019.pdf

54 | April-June 2019

ARTICLE Please visit following link for detail: http://www.sec.gov.bd/slaws/Risk_Based_Capital_Adequacy_Rules,_2019..pdf

April-June 2019 | 55

Please visit following link for detail: http://www.sec.gov.bd/slaws/Investment_Sukuk_Rules,_2019.pdf

56 | April-June 2019

ARTICLE April-June 2019 | 57

58 | April-June 2019

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60 | April-June 2019

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62 | April-June 2019

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Itrat Husain FCMA, FCS