Bangladesh: BGMEA demands action against trade union for US letter with ‘false’ info

Dhaka, June 24 (New Age): The Bangladesh Garment Manufacturers and Exporters Association on Monday demanded action against some trade union leaders accusing them of acting against country’s readymade garment industry by sending letters to the US congressmen with false information about labour standard. BGMEA president Md Atiqul Islam alleged that a trade union federation, the National Garment Workers Federation, recently wrote a letter to the US congressmen mentioning that workers have been repressed in the work place in Bangladesh’s RMG factories. Atiqul made the allegation against the federation affiliated with the IndustriALL Bangladesh at a programme in presence of commerce minister Tofail Ahmed. Tofail on Sunday labelled same accusation against IndustriALL but the leaders of the Bangladesh chapter of the global trade union federation denied the charges. Amirul Haque Amin, president of the National Garment Workers Federation, however, told New Age that they had not sent such letter to the US administration directly but they had submitted a report on torture on a worker leader to the labour and home ministries of Bangladesh, BGMEA, Inspector General of Police, director general of industrial police and superintendent of police of the Mymensingh district. He said that tortured worker leader Moniruzzaman, whose name was mentioned in the letter, was still staying in the capital with serious injuries. Atiqul at the programme on BGMEA-BUFT Journalism Fellowship 2014 said, ‘I urge the commerce minister to take necessary actions against them who have taken stand against the largest foreign currency earning sector of the country and against four million people who are employed in the sector.’ Handing over the copy of the letter to the commerce minister, the BGMEA president said that those who were acting against the country in the name of trade unions should be punished. As the president and the secretary of IndustriALL Bangladesh council, Nazrul Islam Khan and Roy Ramesh Chandra, could not avoid the responsibility of such kind of letter that has been sent to the US administration with false information about labour situation, said Atiqul. Nazrul is a senor BNP leader while Ramesh is an Awami League leader. Amirul, however, told New Age, ‘The allegation on torture on labour leader Monir was not false and we have documents. We submitted those in several ministries and government agencies.’ ‘If anyone wants to talk to the assaulted worker, Monir, to prove the issue, he/she can contact the NGWF,’ Amirul said. Tofail Ahmed said that some trade union leaders, who were not involved with work in any establishment, were giving negative message about the labour standards in Bangladesh across the world. Tofail, however, slightly backtracked from his remarks made on Sunday that Nazrul Islam and Roy Ramesh sent the letter to US congressmen. ‘I don’t have any grudge against Nazrul as he is a nice person. But the letter was sent by the NGWF to the US using the official pad of IndustriALL and Nazrul is the president of the IndustriALL Bangladesh,’ he said. The minister urged the trade union leaders to uphold the interest of country and said that despite ideological difference no one can take stand against the dignity of the nation. Dhaka University vice-chancellor AASM Arefin Siddique, Continued on Boishakhi Television chief executive officer Manjurul Ahsan Bulbul, the Bhorer Kagoj editor Shyamal Dutta and the Financial Express advisory editor Jaglul Ahmed Chowdhury attended the programme. In the programme, the BGMEA announced the names of six journalists who have been elected for the BGMEA-BUFT Journalism Fellowship 2014 in different categories.

Bangladesh: Govt unlikely to withdraw tax on stock investors’ capital gains

Dhaka, June 24 (New Age): Tax on realised gains from stock investment is likely to remain unchanged in the next budget as the government decided not to change the provision in the proposed Finance Bill-2014, officials of the finance ministry said. On the other hand, the government may increase the tax exemption on dividend income up to Tk 20,000 that the investors get from the listed companies from the proposed Tk 15,000, they said. The government may also offer tax rebate for the companies listed in the share market. The companies which will pay dividend more than 40 per cent will get 10 per cent tax rebate on their income tax, according to the proposed amendment. Earlier, companies would get 10 per cent rebate if they gave 20 per cent dividend but the provision was scraped in the proposed finance bill. The government may also exclude from the finance bill a provision that proposed to allow cost and management accountants to conduct audit and certify financial reports under the tremendous pressure from the Institute of Chartered Accountants of Bangladesh. It may also scrap a provision making mandatory for partnership, enterprises and professionals with income exceeding Tk 5 crore a year to submit audited account statements to the NBR. Finance minister AMA Muhith on June 5 placed the finance bill in parliament proposing 3 per cent tax on individual investors with more than Tk 10 lakh but less than Tk 20 lakh capital gain in a year from the stock market and 5 per cent tax on capital gain above Tk 20 lakh. Investors protested against the decision and demanded withdrawal of imposition of gain tax. The country’s two bourses also reacted sharply with ups and downs in the market. Experts also criticised the decision saying that though the imposition of tax on higher capital gain was right but it was not the right time to do so and the decision would put a negative impact on the already volatile market. The National Board of Revenue officials said that the finance minister on Sunday instructed them to keep the provision unchanged in a bid to bring people with more income under tax net and collect revenue from the sector. The government thinks that those who earn above Tk 10 lakh a year from share market should pay tax, they said. Small and medium investors will not be affected due to the imposition of gain tax, they said. Earlier, capital gain from the stock market was tax-free. Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange and Chittagong Stock Exchange were demanding to scrape the new provision saying that the imposition of gain tax would create significant effect on the market. On the other hand, investors get tax exemption on dividend up to Tk 10,000 and they have to pay tax at the rate of 10 per cent on the amount above Tk 10,000. In the proposed finance bill, the government proposes to increase the tax-free dividend to Tk 15,000 which now will be Tk 20,000. Demutualised DSE and CSE will enjoy tax holiday for the next five years until in a way the finance minister proposed in the finance bill. Finance minister proposed tax holiday in a graduated rate for the exchanges but they demanded for absolute tax holiday for next 5 years.

Draft finance company act allows BB to dissolve leasing company boards

Dhaka, June 24 (New Age): Bangladesh Bank will be empowered with the authority to dissolve the boards of non-bank financial institutions in a proposed Finance Company Act that has put stringent restriction on lending by the financial entities, commonly known as leasing companies. BB has drafted the Finance Company Act-2014 to place the existing Financial Institution Act-1993 to regulate the country’s leasing companies more strictly. The proposed act, now being scrutinised by finance ministry, said BB could dissolve the boards of finance companies, its chairman, directors and chief executive officer if the central bank finds any gross irregularities harmful to its depositors. The current provision lying in the FIA stipulates that BB only could fire chairman, director or CEO of any leasing company for valid ground, but not the board of such company. Both the acts, existing and the proposed ones, however, have provisions for seeking clarifications from the persons in questions, before BB applies its ultimate powers. Presently, the country has 30 leasing companies. The proposed act has put restriction on holding more than 10 per cent share of a finance company by any individuals or any company or members of a family. Restricting investment, the act said no finance company is authorised to invest more than 25 per cent of its paid-up capital in a single subsidiary organisation that belongs to the finance company concerned. The current provision under the FIA allows 50 per cent investment by a leasing company of its total paid-up capital. The number of board of directors of such finance companies will be as high as 16, according to the new act. The maximum number of directors to be appointed from a family having shares above five per cent on the finance company could be only two, while one director can be appointed from a family having less than five per cent stake in a finance company, the proposed act said. Presently, no capping on board members applies to a leasing company as the companies concerned generally decide on the numbers of their board members. The tenure of office of a director has been proposed for three years with limiting their terms for maximum two consecutive times. Any finance company director will be disqualified to become director of a bank company or other finance company simultaneously. The current provision disqualifies a leasing company director from becoming a director of an insurance company along with directors for bank and other leasing company at a time. An executive director of BB said they had finalised the draft act in consultation with different stakeholders including that of association of leasing companies. He said the current FIA has lost relevance on many counts as that was enacted more than two decades ago. The finance officials said they would submit the draft act to cabinet division next month with minor changes for approval.

Stock Refinance Scheme: Application deadline extended again for 3 months

Dhaka, June 24 (New Age): The supervision committee on the Tk 900-crore government refinance scheme for the small-scale investors affected by the 2010-11 capital market crash on Monday extended the deadline again for receiving applications from merchant banks and brokerage houses. This time the application deadline, which was to expire on June 30, has been extended by another three months. The committee at a meeting also decided to suggest the ICB for filing application with the central bank to get Tk 300 crore as the second tranche from the refinance scheme, BSEC executive director Saifur Rahman told New Age after the meeting. Saifur, also the convener of the committee, said, ‘Considering the gradual improvement in loan disbursement of the fund, we have decided to extend the deadline for another three months to get loan applications from the merchant banks and brokers on behalf of the affected small investors.’ As per the latest report provided by the Investment Corporation of Bangladesh, loans worth Tk 239 crore have so far been disbursed among the investors and applications for Tk 111 crore loans are in progress for disbursement, he said. Bangladesh Bank on August 26, 2013 released Tk 300 crore to the ICB as the first tranche of the refinance scheme. More than 9 lakh affected investors are yet to file applications to the loan approval committee to get the loans from the government fund. The supervision committee for the first time had set November 30 as deadline to receive applications from the merchant banks and brokerage houses in favour of affected small investors. Since then, it has extended the deadline for four times due to slow response from the merchant banks and stockbrokers. Merchant banks and brokerage houses have time and again demanded that the BSEC should take steps in obtaining a directive from the National Board of Revenue allowing the amount of loans waived for the affected small-scale investors as allowable expenses. The stock market intermediaries also requested for waiver of some conditions out of the 18 conditions set by the government to apply for the loans. As per a Bangladesh Securities and Exchange Commission report sent to the finance ministry in April 2013, only 7,413 small-scale investors out of the 9,53,849 affected by the 2010-11 stock market crash got interest waiver. The loan benefit was announced as part of government-set compensation package for the investors who had investment below Tk 10 lakh during the market crash.