The Trading Corporation of Bangladesh (TCB) will import a huge quantity of soybean oil and lentil for its open market sale (OMS) programme while the Bangladesh Chemical Industries Corporation (BCIC) will import fertiliser from international market to meet the local demand.

State-owned Petrobangla will import LNG from international spot market.

Cabinet Committee on Government Purchase (CCGP) in a meeting, with Finance Minister AHM Mustafa Kamal in the chair on Wednesday, approved a number of proposals in this regard along with some other proposals of different entities under different ministries.

As per the proposals, placed by the Commerce Ministry, the TCB will import 1.10 crore liters of refined soybean oil from Green Nation Builders & Developers, India (Local Agent: N S Construction, Dhaka) under International Direct Purchase Method (DPM) at a cost of Tk 140.99 with per litre of soybean costing Tk 169.

It will import 10,000 metric tons (MTs) of lentils from UMAEXPO Pvt. Ltd, India (Local Agent: Speed ​​Marketing Corporation, Dhaka) at a cost of Tk 96.68 crore while another 15,000 MTs of lentil will be imported from B&C Incorporation and Sena Kalyan Sangstha at a cost of Tk 150 crore with each kg costing at Tk 100.

As per proposals, placed by Ministry of Industries, the BCIC will import 30,000 MTs of bulk granular urea fertiliser under state level agreement from Fertiglobe Distribution Limited, UAE at a cost of Tk 127.40 crore while 30,000 MTs of bulk granular urea will be imported from Muntajat, Qatar at Tk 127.40 crore another 30,000 MTs of bagged granular urea from Karnaphuli Fertiliser Company (Kafco) at a cost of Tk 123.60 crore.

The Petrobangla will import one cargo of liquified natural gas (LNG) containing 33.60 lakh MMBtu from TotalEnergies Gas & Power Ltd. Switzerland at a cost of Tk 713.74 crore with each MMBtu costing at $16.34. 

MSH

Companies and organisations will be required to file tax returns on the income generated by employee welfare funds from the current fiscal year and pay a 27.5 percent tax on the earnings. 

The Income Tax Act 2023 incorporates the provision, lifting the tax exemption and amnesty on the compulsion to file returns for funds such as provident funds, gratuity funds and workers' profit participation funds maintained by the private sector.

The law, however, has exempted government-managed provident funds from taxation, raising questions.

TIM Nurul Kabir, executive director of the Foreign Investors' Chamber of Commerce & Industry, said there were many other avenues to collect tax.

"Employees benefit from provident funds after their retirement. So, the authority should not slap taxes on retirement benefit."

He said while levying the tax, the government has not treated provident funds of the private and public sectors equally.

"It is discriminatory," he said, adding that they would appeal to the tax authority for the withdrawal of the tax on income from provident funds.

Debabrata Roy Chowdhury, director for legal, regulatory and corporate affairs at Nestlé Bangladesh PLC, said the introduction of income tax on trust funds would lower the overall income from such schemes.

"This will have an adverse long-term impact on retired employees of private organisations."

Chowdhury urged the authority to address the issue in line with the spirit of the government's initiatives aimed at ensuring social security for private sector employees.

"The recent introduction of the universal pension scheme for private sector employees is a good example of that."

A senior official of the NBR, on condition of anonymity, said the income of government-managed provident funds was exempted in line with the Provident Fund Act 1925.

He said provident funds under the private sector had been historically exempted and there was no requirement to submit tax returns. As a result, it was unclear whether the funds were properly utilised.

"From now onwards, we will see proper disclosure."

The tax official said the contribution of payroll tax is about 3 percent of the total income tax although it should increase as the economy is growing.

Md Shahadat Hossain, a former president of the Institute of Chartered Accountants of Bangladesh, said income from investment in savings certificates, where people invest as a source of future earnings, is already taxed.

"From that perspective, the imposition of tax on provident and other employee welfare funds seems okay."

However, Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue, said social protection for private sector employees was low.

"Provident and other workers' welfare-related funds provide little social protection. The imposition of tax will increase inequality. But there can't be any discrimination in taxation between private and government provident funds."

Khan, citing the latest income tax law that replaced the Income Tax Ordinance 1984, said the NBR tried to find new avenues to increase tax collection and improve the nation's revenue-gross domestic product ratio, which is one of the lowest in the world.

"We can see the desperation of the tax authority to boost collection. This ultimately reveals the inability of the NBR to catch the tax evaders and illicit money makers."