Bangladesh Bank to publish monetary policy statement online

Published at : 11 July 2024, 08:08 pm
Bangladesh Bank to publish monetary policy statement online
Bangladesh Bank building. Collected photo

In a shift from tradition, Bangladesh Bank has decided to publish its monetary policy statement (MPS) online to avoid potential boycotts by economic reporters.

Traditionally, the central bank has held press conferences where mainstream media reporters and senior journalists gather to discuss the MPS. During these events, the Bangladesh Bank governor and the chief economist explain various policy issues and respond to challenging questions about monetary policy and the banking sector’s performance.

However, breaking with this tradition, Bangladesh Bank has now decided to release the MPS for the July-December period of FY 2024-25 through an online update.

Saiful Islam, the acting spokesperson and Executive Director of Bangladesh Bank, confirmed to reporters that this is the official decision of the central bank. The MPS will be updated online at 3:00 pm on July 18, instead of a press conference, he said.

Refayet Ullah Mirdha, President of the Economic Reporters’ Forum (ERF), commented on this development, noting that the central bank had previously restricted journalists’ access to cover the MPS unveiling press conference.

“We do not support a system where journalists can only enter Bangladesh Bank after officials permit them and schedule a time to talk. The ERF rejected this arrangement and is firm on demanding hassle-free access as before,” Mirdha said.

He emphasized that unless the central bank meets the journalists’ access demands, the ERF will continue to boycott Bangladesh Bank events.



Provident funds to pay 27.5% tax

Published at : 20 September 2023, 04:57 pm
Provident funds to pay 27.5% tax

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."