Finance Adviser Salehuddin Ahmed on Monday officially announced the successful completion of the budget preparation for 72 institutions for the current year using SABRE± software.

SABRE± stands for the State-Owned Enterprises (SoE) and Autonomous Bodies (AB) Budget, Reporting and Evaluation database.

The announcement was made at finance adviser's office in the Finance Division.

Previously, the Finance Division used to prepare the budgets for 49 organisations offline, officials said.

To ensure transparency and accountability in the financial and institutional management of State-owned Enterprises and Autonomous Bodies, the government is using this software, said the officials.

This software is used for budget preparation, accounting of debt and contingent liabilities along with the fiscal risk analysis and evaluation of the overall management these institutions.

The government is now working to bring approximately 400 state-owned and autonomous institutions under the SABRE+ database through this online system.

SABRE+ is an online database system developed by the Monitoring Cell of the Finance Division. It is used to prepare the budgets of State-owned Enterprises and Autonomous Bodies, calculate their debt and contingent liabilities along with to report and evaluate their overall performance.

The system aims to ensure transparency, efficiency, and sound financial management by simplifying the processes of budget preparation, accurate accounting of assets and liabilities, evaluation, and reporting through a digital online platform.

SABRE+, which was launched on a trial basis in September 2023, began its journey by piloting in 12 institutions in the last fiscal year. In the current 2024-25 fiscal year, it has played a major role in data-driven decision-making for budget preparation for 72 organisations, calculating debt and contingent liabilities for 101 organisations, assessing fiscal risk, and evaluating the performance of 20 organisations.

The Application Programming Interface (API) of SABRE+ with iBAS++ allows for the automatic exchange of data within national financial records. This ensures coordination, reduces duplication of work, and facilitates real-time monitoring of financial flows.

In the current fiscal year, 72 State-owned Enterprises and Autonomous Bodies have submitted their budgets through SABRE+. The transition from an offline to an online system has made the budget process more accurate along with has enhanced transparency and accountability in financial flows.

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."