Finance Minister Abul Hassan Mahmood Ali has sought the Asian Development Bank's increased support to meet its present challenges catapulted by prolonged conflicts, rising geopolitical tensions and frequent raids of extreme weather events.
 
Ali made the call during his deliberations at the business session on the final day of the 57th ADB Annual Meeting 2024 in Georgia yesterday.
 
The minister highlighted Bangladesh's attainments and vision towards a high growth trajectory, said a Finance Ministry press release today.
 
On the final day of the 57th Annual Meeting, the Finance Minister delivered country statement in ADB's Business Session along with other governors.
 
He also spoke at the high-level governors' seminar titled "Towards Climate-friendly Globalization".
 
Citing that geo-political uncertainties are disproportionately affecting DMCs, Ali also pleaded for additional PBL and concessional support along with investment in projects for meeting the challenges of food security, digital divide, energy security and tax reforms. 
 
He expressed his optimism that the ADB Meeting would set the just vision to steer through a troubled world, determine strategies for addressing real challenges, scale up concessional climate finances and harness newer opportunities in digital economic cooperation and regional connectivity.
 
While responding at the governors' seminar to the role of regional economies in an age of economic fragmentation and advancement of climate technologies, the finance minister stressed upon building greater cooperation among regional economies for a green transition in the industrial value chain. 
 
Accelerating regional connectivity measures could be the key to use the region's green opportunities in scale as well as expanding the benefits of industrial production, he added.
 
The seminar was attended by a number of other distinguished speakers including Mulyani Indrawati, Governor of Indonesia, ADB and Minister of Finance, Indonesia, Masatsugu Asakawa, President, ADB, Lasha Khutsishvil, Minister of Finance, Georgia and Rose N. Nakanaga, Secretary of Finance and Administration, Federated States of Micronesia.
 
Zeinab Badawi, International Broadcaster and President of SOAS, London University moderated the session.
 
The Bangladesh Finance Minister also attended a bilateral meeting with German delegation headed by Niels Annen, Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development and Governor for Germany in the ADB. 
 
The German Minister expressed interest to join the Bangladesh Climate and Development Platform and widen Bangladesh-German climate partnership.

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."