Earnings by the tax administrator grew by 19.24 percent in the first 10 months of current fiscal year compared to the same period last year, thanks to a strong drive for tax mobilisation from domestic sources.

However, the National Board of Revenue (NBR) has to collect more than Tk 21,000 crore in the remaining two months to meet the revised target for the entire fiscal year.

An NBR official said they are upbeat about earning more than the required amount in the next two months from the tax dodgers apart from the normal collection from taxpayers.

Being encouraged by the strong performance this year, the government plans to set a 22 percent higher target next year than the current fiscal year's original target, he said.According to NBR statistics, revenue earnings in the July-April period were Tk 71,065 crore, up from the target of Tk 69,787 crore.

The NBR official said they had a collection target of Tk 91,870 crore for the entire year. However, in the revised target the figure is going to be set at Tk 92,370 crore.

The current year's successes may encourage the NBR to set the next year's target at Tk 112,259 crore, 22.19 percent more than this fiscal year's original target.

In the first 10 months this year, growth in income tax was 27.76 percent and VAT at the local level increased by 20.34 percent. However, revenue earnings rose by only 12.43 percent at the import level.

The official said both the government and the Bangladesh Bank took various steps to discourage import of unnecessary goods to ease pressure on the foreign currency reserve.

As a result, growth in revenue earnings at the import level is somewhat lower, he added.

The NBR has already formed two taskforces to speed up revenue collection. The taskforces have detected tax evasions by a good number of big companies. Revenues worth around Tk 2,000 crore may be realised from them, he said.

He also said an alternative dispute resolution has recently been introduced to fast-track settlement of tax-related cases out of court, which will spin off a handsome amount of revenue at the end of the year.

Another official said the NBR not only collected an increased amount of revenue from the private sector but also took steps to raise revenue earnings from the public sector.

The tax administrator realised a big amount of revenue from the state-owned mobile phone company and Bangladesh Petroleum Corporation.

The Daily Star/ Bangladesh/ 30-May-2012

Banking sector in Bangladesh is undergoing a challenging phase due to a liquidity shortage, following a massive capital outflow that resulted in a stock market crash early last year and restricted the banking sector’s ability to finance large projects, according to a report of gulfnews.com, a web portal.

Some 77 banks and financial institutions serve the country’s financial sectors comprising four state-owned commercial banks, 30 commercial banks, nine foreign commercial banks, five specialised commercial banks and 29 non-banking financial institutions.

Most banks that had significant exposure to the stock market have been suffering from a liquidity crisis since January 2011 following the market crash. However, despite this, the government has issued permits to open nine new banks, three of which are to be set up by non-resident Bangladeshis (NRBs) — a sign of the growing importance of Bangladeshi expatriate wage earners.

“The banking sector will undergo a tough time for some time as the sector is witnessing a liquidity shortage. With the issuance of the nine new banking licences, the country might become ‘overbanked’,” Mahmoud Hussain, President and Managing Director of Bank Asia, told the Gulf News.

“Besides, the government’s excessive domestic borrowing has added pressure on us.”
Despite these factors, Bangladesh is steadily moving towards a higher growth path, said the International Monetary Fund (IMF).

“It has achieved an average annual growth rate of 6.2 per cent over the last five years; in particular — a growth rate of 6.1 and 6.7 per cent during FY10 [fiscal year] and FY11 respectively, despite the global economic slowdown [Bangladesh follows a July to June fiscal],” Arvind Virmani, IMF executive director for Bangladesh, said.

Hussain said every year banks collectively open about 200 branches across the country as more and more people are being brought into the banking service network. “As a result, the bankers’ mobility has gone up. However, due to the challenging factors, risks have gone up.”

Rapid growth in the banking sector and equity markets has strained supervisory capacity and heightened systemic risks, said a recent report by the IMF. The Bangladesh government recognises the importance of strengthening the financial sector to reduce risks and support growth, the IMF said.

“However, macroeconomic pressures have emerged since the last fiscal year. Inflation has been in double digits and fiscal pressure has escalated, mainly due to increased subsidy costs as global oil prices have sharply risen,” Virmani said.

Hussain said despite these challenges banks will continue to grow, although a careful approach is needed.

The Independent/ Bangladesh/ 29-May-2012

Md. Mahmudul Hoque, Chairman of Jamuna Bank Limited, presides over the 11th Annual General Meeting of the Bank at the Officers' Club in Dhaka,

Jamuna Bank Limited declared 23 percent bonus dividend to its shareholders for the year 2011.

The announcement came at the 11th Annual General Meeting (AGM) held at the Officers' Club in Dhaka, said a press release on Monday.

Md. Mahmudul Hoque, Chairman of Jamuna Bank Limited presided over the meeting.

Al-Haj Nur Mohammed, Chairman of Jamuna Bank Foundation, chairman of Audit Committee of JBL Md. Tazul Islam MP, other directors of the Bank and shareholders were present.

A large number of shareholders of the Bank unanimously approved the 23 percent bonus share at the annual general meeting.

Md. Mahmudul Hoque, Chairman of JBL said, "Jamuna Bank always honour the rules and discipline of Bangladesh Bank, SEC, DSE and CSE."

The Daily Sun/ Bangladesh/ 29-May-2012

Finance Minister Abul Maal Abdul Muhith, seen at a contract signing ceremony at Biddyut Bhaban in Dhaka Monday.

The long-coveted deal to install the Shiddhirganj 335-MW combined cycle power plant project was signed on Monday, eying on narrowing the mounting demand-supply gap of power.

Electricity Generation Company of Bangladesh (EGCB) Ltd, a concern of Bangladesh Power Development Board, sealed the deal with Spain-based joint-venture company comprised of ISOLUX Ingenieria SA and Sumsung C&T Corporation.

Officials hoped that the gas-based power plant would be 50 percent more efficient in terms of energy consumption compared to conventional ones, also helping to minimise the cost of power generation.

Total cost in the project is $339.18 million, of which the World Bank is providing $221.10 million. The government and EGCB Ltd will provide the rest to complete the project within the next 30 months.

With the new power plant, the share of power generation from quick rental power plants will come down to 7 percent of the country’s total power generation by 2016 from existing 21 percent, Finance Minister AMA Muhith said while speaking on the deal signing function as chief guest.

He said power consumption in the country has increased in recent years due to high economic growth, widening the demand-supply gap.

Energy Adviser to the Prime Minister Dr Tawfiq-e-Elahi Chowdhury, State Minister for Energy and Mineral Resources Eng Muhammad Enamul Huq, Power Division Secretary Abul Kalam Azad, World Bank Country Director Ellen Goldstein and chairman of EGCB Ltd Nilufar Ahmed were also present at the function.

EGCB company secretary Kazi Nazrul Islam, ISOLUX Managing Director Jose Garrido and Samsung C&T Corporation General Manager Sungki Na signed the contract for their respective companies.

Terming the project as a “life support project” for the country’s power sector, Dr Tawfiq-e-Elahi Chowdhury said, “It is indeed a very auspicious occasion for us.”

The combined cycle power plant will contribute much to energy efficiency along with cutting fuel costs for power generation, Tawfiq said, adding that power will be a key issue in maintaining the country’s economic growth rate over six percent.

He said the government has been able to increase power generation up to 5,500MW, from around 3,500MW, after taking office.

During the period, the government had to give two millions new connections while the demand for power at industrial units also increased manifolds, Tawfiq added.

World Bank Country Director Ellen Goldstein said the Shiddhirganj power plant will be the most inexpensive and most reliable power plant in Bangladesh.

She also hailed the bidding and procurement process of the project.

The WB country director called for creating a level playing field in the sector to attract more foreign private companies to invest in Bangladesh’s power sector. Earlier, the WB had committed to provide $221.10 million to implement two units of peaking power plant at Siddhirganj, each with capacity of generating 150MW of electricity.

But it later disagreed on a proposal to procure equipments from German firm Siemens over graft allegations. The WB then proposed the government to turn the project into a 335-450MW combined cycle one and assured to provide the total fund required for the project.

According to officials, state-owned EGCB invited a tender in October 2010 for the 300-450MW Siddhirganj power plant.

The project, undertaken in 2004, was delayed due to a long procedure of tendering and re-tendering as the authorities failed to satisfy the WB.

A tender was first invited in 2009 when it was a 300-MW peaking plant project. But the EGCB had to cancel it in response to a WB suggestion.

Later, as per Power Division’s instructions and World Bank’s suggestions, the EGCB upgraded the project to a 335-450MW combined cycle power plant and floated a tender in November 2010.

The Daily Sun/ Bangladesh/ 29-May-2012

The National Board of Revenue (NBR) will upgrade the UNCTAD software by September next year to make the system more robust against underinvoicing in external trade, NBR officials said.

Underinvoicing is an illegal practice to dodge the correct duty on imported products by quoting an incorrect price.

The move comes in response to a claim from a former central bank governor that the country was incurring huge revenue losses due to NBR's failure to detect under-invoicing.

The Daily Star/ Bangladesh/ 29-May-2012