Increased export earnings, remittance, FDI needed to increase forex reserves: Speakers at ICAB seminar

Speakers at a seminar today (7 July) stressed on boosting revenue collection by expanding the tax net which will enable the government to borrow less from the market as foreign borrowing increases vulnerability to external conditions and potential currency depreciation.

To increase reserves, they also said increased export earnings, remittance and FDI are important to stabilise the exchange rate side by side with austerity in expenditure, increasing revenue collection and promoting fiscal reforms is a must to maintain fiscal discipline.

The speakers said this at a seminar on "Salient Features of Finance Act 2024: Investment Perspective" organised by the Institute of Chartered Accountants of Bangladesh (ICAB) at its auditorium, reads a press release.

AKM Badiul Alam, member (Tax Policy), National Board of Revenue (NBR) was present as the chief guest. Dr Nasiruddin Ahmed, former chairman of NBR, Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, and  Md Farid Uddin, ex-member of customs and VAT, NBR were panel speakers and connected through online zoom with the seminar.

Snehasish Barua FCA, Partner, Snehasish Mahmud & Co, Chartered Accountants presented the keynote paper while ICAB President Mohammed Forkan Uddin FCA delivered an address of welcome.

Mohammed Humayun Kabir FCA, chairman- TCLC, council member & past president-ICAB moderated the session while Md Johirul Islam FCA, vice president (Technical & Regulatory Affairs), ICAB gave the closing remarks.

In the seminar the keynote presenter provides an overview of the changes brought in by the Finance Act 2024 and the SROs issued thereafter. With the detailed examples of impacts on businesses by the changes provisions of the finance bill 2024, the paper presenter aims to provide accurate and updated facts and figures citing from the Bill. About inflationary pressure, he said the increased money supply and demand can push prices up. However, demand for consumption must be contained and price must be monitored to keep the current trend of inflation stable, he added.

The government's borrowing may raise interest rates, deterring private investment, which needs to be addressed prudently, speakers said adding provision in the finance bill to all receipts and income must be transacted through bank transfer for every single transaction above Tk. 5 lakhs and annual transaction over Tk. 36 lakhs of expense and investment would bring a positive impact on the economy.

They said, under the new finance bill TDS on payment to non-residents shall not be applicable for the cases like payment made to any authority of the foreign country, payment for subscription fee of professional body, expenses of liaison office, international product development & marketing expense, tuition fees, and any type of security deposit. Therefore, it will reduce hassle in making outward remittance and reduce tax burden as well. Tax net widened by introducing a new withholding entity, they opined.

The speakers said, government employees and individuals having total assets more than Tk. 50 lakh need to submit assets & liabilities statements which will enhance transparency and accountability within the public sector and give some relief for the individual taxpayers other than Govt. employee.

Mandatory PSR Submission for obtaining and renewing licenses of hotels, restaurants, motels, hospitals, clinics and diagnostic centers located within the City Corporation Area will increase tax net, they further said.