Finance Minister
No IMF proposal received to raise power, petroleum prices: Finance Minister
Finance Minister AHM Mustafa Kamal has said he did not get any proposal from International Monetary Fund (IMF) over hiking the prices of petroleum and power as precondition of providing loan.
“They (IMF) didn’t give any proposal over raising power and petroleum prices,” he said responding to a question from a reporter.
He was briefing reporters after the two consecutive meetings of the Cabinet Committee on Economic Affairs and Cabinet Committee on Government Purchase on Wednesday.
The finance minister was asked the question referring to a media report that IMF has proposed increasing the prices of power and petroleum as precondition to provide a $4.5 billion bailout loan.
Read: Nothing wrong in economy as Bangladesh seeks IMF loan: Finance Minister
He advised the reporters not to spread any misleading information for the sake of the interest of the country.
Quoting a Hadith, Kamal said without loving one’s own country, Muslim cannot be a good Muslim.
Responding to another question he said that everybody should encourage people who had laundered money to bring those back by paying a certain amount of tax.
Defending his position about such move of the government to allow whitening of black money he said money turns black due to the government system.
The finance minister said the country’s economy will return to stable position within months as everything is moving on right track.
He said not only Bangladesh, many countries in the world including the European ones have been experiencing high inflation.
Nothing wrong in economy as Bangladesh seeks IMF loan: Finance Minister
Confirming Bangladesh’s request for a loan from International Monetary Fund (IMF) Finance Minister AHM Mustafa Kamal has said that it does not mean the country's economy is in bad shape.
“But I had to make my previous statement looking into the perspective. I didn’t want to expose our demands”, he told reporters while briefing on a meeting of the Cabinet Committee on Government Purchase on Wednesday.
Last Wednesday, after a similar meeting, the Finance Minister had said that Bangladesh didn’t need IMF loan and would not seek any funding support from the lending agency. But within days, it was reported by the media that Bangladesh had sought $4.5 billion in loan from from IMF.
When his attention was drawn to his last week’s statement, Kamal said he had to made such a statement for strategic reason.
“If I expose my demand in advance, the burden and cost will be high on me”, he said. “This is a bargaining point. Every body has to do this”, he added.
Read: Mustafa Kamal dismisses reports about Bangladesh request for IMF loan
He said the government has to keep in mind that any condition of the IMF loan will not go against the interest of the country.
He, however, said no specific figure was quoted in the loan proposal sent to the IMF. “We will see first at what conditions they want to provide the loan and how much we should take”.
Responding to another question, he said seeking IMF loan does not mean Bangladesh’s economy is in bad situation. The IMF, the World Bank know about our economic situation and they know that Bangladesh is capable to repay the loan.
About the current dollar crisis in the market, the finance minister said the government has already taken steps to tackle the situation.
“If anybody or any section is found to be involved in creating artificial crisis in the dollar market or concealing information, action will be taken against them”, he said.
Kamal said the main sources of foreign exchange is remittance and export. Both the remittance and export are increasing although import is also rising.
“Dollar rate should be fixed on the basis of demand and supply”, he said.
Finance Minister’s activities have no connection with constitution, ethics: Fakhrul
BNP Secretary General Mirza Fakhrul Islam Alamgir on Wednesday alleged that many activities of Finance Minister AHM Mustafa Kamal have no link with the constitution and ethics.
“He (Kamal) proposed legalising the laundered money. His (Finance Minister's) own firm has long been involved in manpower business…he is doing many things that have no connection with the constitution and ethics,” Fakhrul said.
Talking to reporters at his local residence, the BNP leader also alleged that the ruling party itself has siphoned off money abroad and it is now legalising that illegal money.
“Bangladesh is now no longer a civilised and democratic country. They (AL) have turned it into a barbaric, uncivilised and failed state,” he observed.
About the Cumilla polls, Fakhrul said people had an expectation that the Election Commission would try to exert its power to free the election from the ruling party and the government’s influence.
“But it’s unfortunate that a ruling party MP didn’t leave the election area even after receiving a letter from the Election Commission. “This has demonstrated the helplessness of the entire Election Commission, including the Chief Election Commissioner,” he said.
The BNP leader said the ruling party MP stayed in the election area violating the EC’s instruction at the behest of the government. “This incident has proved that not only the Cumilla city election, but the entire election system in Bangladesh has been taken under the control of the government.”
Earlier on June 8, the EC ordered local Awami League President AKM Bahauddin Bahar MP to leave electoral areas under Cumilla City Corporation for allegedly violating the electoral code of conduct ahead of the polls.
However, Bahar, a ruling party MP from Cumilla-6 seat, did not comply with the EC’s order.
He alleged that the government has destroyed the Election Commission like other state institutions.
“That’s why not only us, but all the opposition parties are saying that it is not possible to have a fair election under any Election Commission without a polls-time neutral government,” the BNP leader said.
Fakhrul said the ex-election commissioners also at a meeting recently said a free and fair election is not possible under a partisan government in Bangladesh due to the prevailing electoral culture of the country.
“So, a neutral government during elections is very much needed in Bangladesh. BNP will not go to any election under the present government, no matter what,” he said.
The BNP leader said their party is now holding talks with different political parties to wage a strong movement to ensure a credible election under a non-party government.
Owners of flats or lands in Dhaka city are black money holders: Finance Minister
Finance Minister AHM Mustafa Kamal has said those who own flats or lands in Dhaka city are black money holders.
“The existing system of the government make them owners of the black money”, he said while virtually briefing on the outcomes of the two consecutive meetings of the Cabinet Committee on Economic Affairs (CCEA) and the Cabinet Committee on Government Purchase (CCGP) on Wednesday.
Responding to a question he said owners of lands or flats register their properties at much lower rates than the actual.
The government’s registration fees of lands and flats have been fixed. But flat or land owners register their properties showing much lower rate to evade the taxes which make them owners of black money, he said.
For instance, he said, if price of a flat in Gulshan is Tk 10 crore, it’s owner register it showing Tk 2 crore.
Also Read: Law bars asking questions about laundered money: Finance Minister
“So, in that sense, almost all the flat or lands owners in Dhaka city are black money holders”, he said.
Kamal again defended the government’s recent amnesty for the money launderers and black money whitening steps saying that money becomes black due to the government’s improper systems.
Due to the flaws in the government system, people get the chance to evade taxes, he added.
Law bars asking questions about laundered money: Finance Minister
Finance Minister AHM Mustafa Kamal has said the government is obliged by a law that those who will bring back their laundered money home will not be questioned any more.
Defending his move, announced in the national budget for FY2022-23, he said most of such money is undeclared and smuggled out due to the faulty system.
He made this remark while addressing a post-budget press conference at Osmani Memorial Auditorium in the city on Friday.
Also read: Budget offers no good news for lower, middle income groups: CPD
Fielding a volley of questions on the issue, he said many countries in Asia, America and Europe have declared amnesty for the money launderers.
According to a provision declared in the newly placed national budget, no authority, including the income tax collectors, shall raise any question as to the source of any asset located abroad if a taxpayer pays extra taxes on such assets.
The proposed rate is 15 per cent for immovable property not repatriated to Bangladesh, 10 per cent for movable property not repatriated to Bangladesh and 7 per cent for cash and cash equivalents repatriated to Bangladesh. This will take effect from July 1.
A question was asked by a reporter that in the past the government had declared a "Truth Commission" and provided scope for legalising illegal money through paying tax, but later the names of the persons who took the opportunity were disclosed.
So, how could people trust the new assurance and take the opportunity?
Answering the question, Kamal said the government will use some tools so that people will be encouraged to bring the smuggled illegal money back.
"But this will not discourage or undermine those people who regularly pay taxes", he added.
Supporting his view Agriculture Minister Abdur Razzak, who present on the occasion, supported the government move in this regard and said that the Truth Commission was formed during the caretaker government which was a non-constitutional government.
"But Awami League is a constitutional government and the relevant law is passed by the government to give the guarantee to the people not to raise any question in future", he added.
The finance minister claimed that the newly unveiled national budget will bring benefits for all the segments of the society, specially, for the poor.
"I was born in a poor family and raised up from poverty. So, I do feel the pain of the poor", he said, adding that so many measures including allocation for social safety-net programmes were increased in the new budget.
Budget to make economy stronger: Finance Minister
Finance Minister AHM Mustafa Kamal on Friday hoped that the implementation of the proposed national budget for FY2022-2023 would make the economy stronger and more vibrant.
“Hopefully our economy will be stronger and more vibrant with the implementation of this budget,,” he said at a post-budget conference in the city’s Osmani Smriti Auditorium in the afternoon.
The finance minister on Thursday unveiled the Tk 678,064-crore national budget for the financial year 2022-2023 with special focus on economic recovery from uncertainties caused by Covid-19 pandemic and the Russia-Ukraine war.
54 warehouses to be constructed for safe chemicals storage, says Finance Minister
As part of the government initiatives to ensure a safe environment in the industries, a total of 54 godowns will be constructed under a project titled ‘Building Warehouses for Storage of Chemicals’.
This project is now underway temporarily at the premises of Ujala Factory Ltd. at Shyampur to move the chemical factories and warehouses scattered in Old Dhaka to safer places as soon as possible.
Finance Minister AHM Mustafa Kamal informed this in his budget speech.
He said as pledged in the election manifesto, the establishment of ETP has been made compulsory in the red and orange marked factories set up in BSCIC industrial cities as part of the environmental protection programme.
He said there is no alternative to increasing the productivity of the industrial sector and improving the quality of manufactured goods to maintain the pace of development for a sustainable, universal, and environment-friendly economic development in continuance of the development achieved in the past decades.
Also read: Budget FY23: Will increase use of tobacco products, say anti-tobacco platforms
“To increase the contribution of the industrial sector to 41.86 percent of GDP, in line with the Eighth National Five-Year Plan we have formulated time-befitting policies and identified implementation strategies for industrial expansion,” he said.
According to the BBS, the contribution of the industrial sector to the GDP in FY2007-2008 was 17.7 per cent, which stood at 35.36 per cent FY2021-2022.
He said that considering the growing demand for urea fertilizer for the development of agriculture in Bangladesh, the government has started commercial production of urea fertilizer at the Shahjalal Fertilizer Factory at Fenchuganj in Sylhet District at a cost of Tk. 4 thousand 985 crore .
Cash incentive on remittance to remain unchanged at 2.5 per cent
Keeping the rate of incentive on sending remittance unchanged at 2.5 per cent in the fiscal year 2022-23, Finance Minister AHM Mustafa Kamal has hoped that a satisfactory growth of remittance will be back on track soon.
In his budget speech on Thursday, he mentioned that in FY2020-2021 the growth of remittance stood at 36.10 per cent.
However, since the very beginning of FY2021-2022, the income from remittances slightly decreased.
With a view to encouraging remittance through legal channels, he said the government has raised the rate of incentives by 0.5 per cent to 2.5 per cent from January, 2022.
The government has withdrawn the mandatory provisions for submission of earning documents of the remitters in the case of availing cash incentives against remittances exceeding the amount of US$ 5,000. As a result, in recent months the flow of remittance has begun to increase again, he mentioned.
Also Read: Finance Minister starts unveiling Tk 678,064 cr national budget
Overseas Employment Generation
About the overseas job, Mustafa Kamal said that in order to ensure dignified jobs for Bangladeshi workers abroad, it is necessary to ensure the quality of their training and skill.
With this end in view, all the training programmes of technical training institutes and institutes of marine technology are conducted under the National, Technical and Vocational Qualification Framework (NTVQF) from the current fiscal year.
Mustafa Kamal mentioned that the government has taken up a range of initiatives for the welfare of both expatriate workers and workers returning from abroad.
A plan of action for establishing technical training institutes at every Upazila by phase has been taken up for inspiring the marginalised communities across the country.
He said the implementation of the project for establishing 100 technical institutes at Upazila level will start soon.
Apart from this, there is a plan to ensure overseas employment of 8.10 lakh Bangladeshi workers and provide skill development training to 5.20 lakh workers in different trades, he said.
Finance minister is set to unveil Tk6.80 tn national budget at JS on Thursday
Finance Minister AHM Mustafa Kamal is set to place the national budget of Tk 6.80 trillion ( 6.80 lakh crore) in the Jatiya Sangsad for FY2022-2023 on Thursday.
The size of the budget will be about 15 percent of the country's gross domestic product or GDP.
This is the country’s 51st budget and the 23rd of the Awami League government in five terms. The budget will see special measures of tax exemptions on agriculture, food processing and small sector development.
Also read: Gender budget framework needs to be redesigned, say discussants at a pre-budget dialogue
The revenue collection target set for NBR is Tk 4.33 trillion, an increase of 9 per cent from the revenue target of the current fiscal year and annual development program (ADP) is set at Tk2.44 trillion.
Experts emphasize on having measures to control growing inflation, stabilise foreign exchange rate and steps to ensure food security.
Tajuddin Ahmed presented the first budget as the first finance minister of the post-independence Bangabandhu government in 1972.
In the upcoming budget, the target of GDP growth is set at 7.5 per cent and inflation will be kept at 5.5 per cent.
In the proposed budget, the expectation of GDP is set 7.5 percent – around Tk44.50 trillion (Tk 44 lakh 50 thousand crore, which is Tk14 trillion more than the FY22, finance division sources said.
The GDP size in FY 22 was Tk28.34 trillion or Tk 28.34 lakh crore.
The government policy makers believe in the FY23, three major infrastructures of the country will help in achieving the GDP growth despite projection of decline in global economy due to Russia-Ukraine war.
Officials concerned think that three big mega projects will be launched in FY 23. The dream Padma Bridge will be opened on June 25. This will open new doors for business and trade, which will have a positive impact on the economy.
The ministry officials said development of power, energy, communications and transport sectors will also boost growth following completion of these three mega projects.
The impact of the development of these sectors will play an important role in achieving the growth of other sectors including industry. Naturally, importance is being given to agriculture for achieving growth. Therefore, emphasis is laid on ensuring supply of agricultural inputs and maintaining subsidy. Growth is expected to be accelerated if the ongoing reforms in various sectors (revenue sector and Investment) are implemented, they said.
According to the finance division, the prices of food, fuel and fertilizer have risen sharply due to the Russia-Ukraine war. Farmers are getting it at a lower price as the government is subsidizing fertilizer. A plan has been taken to give a subsidy of Tk 12,000 crore in agriculture in the next financial year as well.
Also read:Russia-Ukraine war creates uncertainties: Kamal on upcoming national budget
The implementation of incentive packages in the new budget will also be continued. This will add to the sector based GDP.
In this context, the former caretaker government's finance adviser AB Mirza Azizul Islam told UNB that if there is no growth, there will be stagnation in the economy.
“Poverty must be reduced by ensuring employment by increasing the coverage of social safety net programs,” he said.
Dr. M. Masrur Reaz, economist and Chairman, Policy Exchange of Bangladesh said the budget faces challenges to keep a stable exchange rate of forex and import trade inflation.
The budget should have measured inflation as well as price control of commodities and the health sector by developing institutional capacity of government entities.
The government set an ambitious revenue collection target of Tk4.33 trillion, comfortably the highest ever, although meeting this target has never been the point.
The national board of revenue (NBR), a wing of the internal resources division (IRD), usually collects revenue for the government. The upcoming budget is set to have a Tk4.33 trillion revenue target that is Tk 44000 crore more than the target in the budget for the current fiscal and 9.8 percent of GDP.
As per the calculation, the budget deficit would stand at Tk2.44 trillion that is 5.5 per cent of GDP.
According to sources at the finance ministry, the government would borrow Tk128,341 crore from the domestic sources and Tk1,16,523 crore from abroad to meet the deficit in the proposed budget.
Of the domestic borrowing, Tk 93,889 crore would be taken from the banking system while Tk 34,452 crore from savings certificates.
Govt mulls amnesty to bring back laundered money: Finance Minister
Finance Minister AHM Mustafa Kamal has said that the government is contemplating amnesty for bringing the laundered money back into the country.
“We’re thinking of announcing amnesty for bringing the smuggled money back,” he told reporters in briefing after the two consecutive meetings of the Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Public Purchase on Thursday.
Also read: Finance minister directs regulators to boost investment in stock market
He said Bangladesh Bank will make more announcements in this regard before the national budget is placed in Parliament.
He said the issue of amnesty will be reflected in the national budget.
"The initiative will be taken by the Bangladesh Bank and announced by it through circulars. But we don’t want to make any announcement in this regard before placing the national budget in parliament”, he said.
The finance minister’s remarks came in response to the reporters’ questions on the government’s initiative as Bangladesh Bank recently announced that any person will be allowed to bring in upto $5000 from abroad without any prior declaration and no question will be asked about the source of the money.
Such an announcement from the central bank came to encourage people to bring more US dollars against the backdrop of its prevailing crisis.
Recently, the greenback gained strength against the local currency as the dollar rate went up to Tk 100 in the kerb market while officially Bangladesh Taka (BDT) was depreciated on a number of occasions.
Kamal said the initiative is being taken mainly to bring back that money which was laundered from the country.
He, however, did not give any detail of the amount as to how much money was laundered. “I can’t give you any idea how much money was laundered. But we collect information from the media and other official and non-official sources”, he said.
Also read: Finance minister hints at hard decisions due to Russia-Ukraine war
He said different countries are announcing amnesty like tax exemption. “We’re also thinking so”.
The finance minister said he believes that the people who laundered money will take advantage of the government’s amnesty as it is a good scope for them.
Responding to a question on the issue, he said there is a dollar crisis. “But it’s not at a level that would hamper our import. We have enough dollars in our reserves to run the import business”, he said.