Weekly News Clippings (4 July, 2013)

Airport can now expand (The Daily Star, July 4, 2013)

The Civil Aviation Authority of Bangladesh (Caab) has got back its 105 acres of land worth more than Tk 3,000 crore from a Singapore-based company that had been awarded the lease of the land next to the Shahjalal International Airport 13 years ago. According to the Caab Chairman, there is a plan to use the repossessed land to construct a third terminal with 32 boarding bridges at the airport. The airport now handles 5.4 million passengers annually against its capacity of eight million. In 2000, the then government had controversially awarded Singapore-based IPCO a 60-year lease of 144.73 acres of land adjacent to the airport to construct hotels and resorts. But the company failed to comply with the conditions of the agreement.

 

Remittance inflow breaks record (Dhaka Tribune, July 3, 2013)

Bangladesh witnessed record high remittance inflow of US$14,460.52 million in the just-ended fiscal year. According to the general manager of Bangladesh Bank general manager there has been an increase in the remittance flow through the formal channel. Of the amount, two-thirds came from Middle Eastern countries alone. He said Bangladesh had received US$12,843.43 million in remittance in the 2011-2012 fiscal year. The country received US$1,057.63 million in June last year.

Unified food safety authority on cards (The Daily Star, July 2, 2013)

The cabinet has approved in principle the draft of the Food Safety Act, 2013 with a provision of up to 14 years’ imprisonment for food adulterators. The draft law suggested forming a unified authority — Bangladesh Food Safety Authority (BFSA) — to fight food adulteration and oversee other food-related concerns of consumers. It proposed controlling the use of various toxic chemicals, formalin, DDT, etc., in food items. It will replace the five-decade old law which has provisions of Tk 5,000 fine or two to three months imprisonment for food adulterers. The ordinance covered only eight food commodities, while the new draft law proposed including over 200 food commodities, said an official of the Food Planning Monitoring Unit of the food ministry.

Micro-borrowers not trapped in debt: study (The Daily Star, July 2, 2013)

Microcredit has helped borrowers earn and consume more, accumulate assets, invest in children’s education, and move out of poverty, according to a recent study. The study showed significant welfare gains resulting from microcredit participants, especially women. The accrued benefits of borrowing also outweighed accumulated debt, said the study that tracked the changes microcredit has brought in more than 2000 households in 20 years. The WB and Institute of Microfinance, a research organisation in Bangladesh, jointly conducted the study.

What Do Armani, Ralph Lauren and Hugo Boss Have in Common? Bangladesh (The Wall Street Journal, July 1, 2013)

The availability of low-cost workers has sent mass-market clothing labels such as H&M, Gap, Zara and others—into Bangladesh's $20 billion garment industry. However, high-end designer brands including Giorgio Armani, Ralph Lauren and Hugo Boss have also outsourced manufacturing to Bangladesh, where worker safety has become a huge concern following several tragic accidents. These labels often use the same factories as their discount peers. This shows how far-removed a garment's retail price is from its production cost—and how only a thin slice finds its way back to the factory that makes it.

‘1% to pay income tax in FY15’ (Dhaka Tribune, July 1, 2013)

Income tax payers would stand at minimum 1% of the total population in the financial year 2014-15 said the Finance Minister of Bangladesh. The minister said that the number of income tax payers have risen from 700,000 to 1.1 million. According to the newly introduced e-tin system, people can now register for income tax payment online, which is expected to reduce hassle for the taxpayers and prevent issuance of fake Taxpayer’s Identification Number (TIN). The existing TIN holders will have to register with the online system within December 31. People will need national identity card or passport for receiving TIN certificates. There would be no effectiveness of old manual TIN from January next year.

Money whitening scope widens (The Daily Star, June 30, 2013)

The government has provided scope for legalization of undisclosed money through investment in productive sectors, but withdrawn its proposal for allowing money whitening through purchase of land as it will push up land prices. In the proposed budget for fiscal 2013-14, it was suggested that a person would be allowed to whiten money by purchasing a flat or a plot of land provided s/he paid a certain amount of tax. Among other things, the VAT on small traders and shopkeepers will drop by Tk 1,000 and import duty on fire safety equipment has been lowered to 5 percent from the existing 10 to 15 percent, with an aim of ensuring fire safety in garment industries

Bangladesh Decries U.S. Cutoff of Duty-Free Access (The Wall Street Journal, June 28, 2013)

Bangladesh expressed dismay at a U.S. decision to cut duty-free trade access claiming that the government has taken firm measures to improve safety and working conditions since a factory collapse killed more than 1,000 garment workers in April. The suspension, due to begin in two months is expected to raise U.S. import duties on goods including golf equipment, kitchen appliances and ceramics, but it would have little effect on the country's garment industry, which does not qualify for duty-free access. The garment industry's global exports come to around $20 billion a year, with the U.S. buying about a quarter. But experts say the U.S. decision could increase pressure on foreign brands to continue reducing orders from Bangladesh factories. There's also a danger that the European Union, which purchases two-thirds of Bangladesh's apparel exports and allows duty-free garment imports, could consider similar moves.