DSEX 6,235.71 16.43 Gold (Ounce) $1,280.70 Dollar 81.25 (Buy) 82.25(Sell) REPO Rate (16/10/2017) 3.44% DSE30 2,270.30 7.60 Oil (Barrel) $54.30 Euro 93.52 (Buy) 97.88(Sell) REPO Rate (15/10/2017) 3.46% Source: DSE Source: Yahoo Finance Source: One Bank Limited Source: Bangladesh Bank (W AV) National News Take steps against GP over VAT claims Govt goes for incremental increase of VAT ‘New conditions for state-run banks subject to legal, political factors’ Export earnings from US, EU go up Smartphone sales tepid RAJUK, Malaysia co sign deal today Tk 1,699cr Sheikh Hasina Cantonment Project okayed BSEC to form intelligence unit to monitor merchant banks New chief for ACI Pure Flour, ACI Foods International News Myanmar denied membership in global footwear makers' platform Apple to help India develop anti-spam app after face-off with regulator National News Take steps against GP over VAT claims NBR calls upon stock regulator The Large Taxpayers Unit has requested the capital market regulator to take legal measures against Grameenphone for not keeping provision in its accounts against state's VAT claim of Tk 2,015 crore. The move comes at a time when Grameenphone's stock has been on an upward trajectory and even hit an all-time high of Tk 500 on Tuesday. The field office of the National Board of Revenue sent a letter to the Bangladesh Securities and Exchange Commission on November 14, citing eight VAT-related cases pending at different courts between the government and the largest mobile phone operator. The cases include Tk 1,023 crore VAT claims by the NBR related to the issuance of SIMs. The LTU VAT earlier said the country's largest mobile operator had sold SIMs to new customers between July 2007 and December 2011 under the guise of issuing replacement SIMs to customers with the view to evading tax on SIMs. The NBR's field office has also claimed VAT from other operators as unpaid tax on SIM issuance. The operators, including Grameenphone, appealed to the High Court against LTU's claims after losing battle at the VAT Appellate Tribunal in June this year. The LTU, in its letter, said the High Court earlier gave judgment in favour of the government following a writ petition filed by Grameenphone against the VAT claims on SIM replacement. There is another case of VAT evasion of Tk 378.95 crore related to issuance of replaced SIMs between July 2012 and June 2015. The LTU has issued primary demand citing that the Appellate Tribunal gave verdict in favour of the government. The mobile phone operator also has a dispute of Tk 19 crore involving VAT on space and establishment rents. The NBR's field office got judgment in favour of the government from the Appellate Tribunal on VAT on this case as well. The LTU said Grameenphone appealed to the High Court challenging the Tribunal's verdict. 1 | P a g e The mobile operator earlier filed a writ petition with the upper court and the apex court gave judgment in favour of the government. Grameenphone also has a Tk 452 crore VAT dispute for non-payment of Tk 348 crore SIM tax during August 2006 to March 2007 on time, according to the LTU. Contacted, LTU VAT Commissioner Matiur Rahman said the mobile operator has not kept any provision in its accounts even though it owes Tk 2,015 crore to the government. “So we have asked the BSEC to take steps so that the company keeps provision.” As per standard accounting principles, companies should keep provisioning in its accounts against arrears when there are cases at courts. With the face value of Tk 10, Grameenphone shares closed at Tk 486.10 yesterday after opening at Tk 500 per share. The operator recorded Tk 700 crore as profit for the third quarter to take the tally so far this year to Tk 2,146 crore. Grameenphone's highest profit was registered last year: Tk 2,250 crore. Rahman said the LTU has also requested Bangladesh Bank a month ago to not allow Grameenphone to remit money to its parent company Telenor Group unless it keeps provisioning. On the issue, Sayed Talat Kamal, head of external communications of Grameenphone, said, “We have not received any communication and can only comment after we have seen it and have had time to assess the allegations.” Source: http://www.thedailystar.net/business/take-steps-against-gp-over-vat-claims-1491979 Govt goes for incremental increase of VAT As there is no effective rebate system in the existing VAT law, the government should refrain from changing the truncated base value and tariff value Unable to implement the Value Added Tax and Supplementary Duty Act 2012 for a number of years, the government is looking the gradually increase VAT revenue across the board to avoid adverse reactions when the Act is finally implemented. As part of the move, the government is likely to increase VAT in many of Bangladesh’s service sectors from the next fiscal year. With this goal in mind, the National Board of Revenue (NBR) has taken initiatives to revise the Value Added Tax Act, 1991. The revised draft is set to be placed before the cabinet committee for evaluation, and the revised VAT law will be announced along with the budget for the next fiscal year, NBR sources told the Dhaka Tribune. Under the existing VAT law, some of the service sectors in the country enjoy special benefits, such as a reduced VAT rate, which is known as the ‘Truncated Base Price’. Apart from the tax benefits, the service sector and also some of the goods produced locally enjoy fixed tariff rates. According to insider sources from the NBR, some of the special facilities will be removed in the revised VAT law. Speaking on the issue, experts and businessmen warned that the cost of services and products will surely go up if the compressed base price and fixed tariff value facilities are withdrawn. Local consumers will be indirectly affected by the increased service costs. At present, a total of 15 services pay VAT on a truncated basis under this special facility. Besides, VAT has been levied at fixed tariff value on 70 local products and services, such as local suppliers, construction companies, power distribution companies, local brand clothing dealers, furniture dealers and land development agencies. 2 | P a g e If the ‘Truncate Base Price’ facility is withdrawn from those sectors, the imposed VAT will jump to 15% from the current rate of 1.5 to 10%. Responding to query, a senior official of the NBR said the existing ‘Truncated Base Price’ and tariff value facilities in the current VAT law will be gradually withdrawn. The goal of the NBR is to eliminate this inconsistency by implementing the same rate of VAT in all spheres. For this, initiatives have been taken to amend the VAT law 1991, he added. According to NBR sources, Finance Minister AMA Muhith has already given his consent to the new VAT policy. The NBR is planning to amend some sections of the existing VAT law to withdraw facility. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Adviser Manzur Ahmed said the revenue board must thoroughly assess the existing ‘Truncated Base Price’ before making any changes to the policy. “If the service sectors do not have the ability to pay VAT to the NBR on actual transactions, these sectors will be affected severely,” he added. The implementation of the amended VAT law has been postponed for the past two years due to strong objections from the local traders and businessmen. However, the NBR is now trying to bypass the objections by increasing the VAT rate by raising fixed tariff under the existing law. 3 | P a g e Vice President of Bangladesh Shop Owners Association, Rezaul Islam said the NBR must hold discussions with traders before making any changes to truncated value and fixed tariff rates in the VAT law. “If a decision is made without consulting all stakeholders, it might not have a positive effect on the local business community,” he pointed out. A businessman, on condition of anonymity said, as there is no effective rebate system in the existing VAT law, the government should refrain from changing the truncated base value and tariff value. He expressed concern over the fact that the government could gradually implement a new VAT law with 15% uniform rate in most, if not all sectors in Bangladesh. Source: http://www.dhakatribune.com/business/2017/11/15/govt-goes-incremental-increase-vat/ ‘New conditions for state-run banks subject to legal, political factors’ The new conditions will be focused on mainly improving the financial status and the management of eight state-run banking institutions Implementing new conditions to improve the status and performance of eight state-run banks depends on several factors, most of which are legal and political, an official of the Bank and Financial Institutions Division said on Wednesday. “One of the recommendations made to improve the state-run banks suggests revealing the names of large loan defaulters, which could be tricky seeing as some of them are also politically influential and even part of the government,” said one official, seeking anonymity. “Furthermore, we also have to ensure that the new conditions do not contradict any of the existing laws,” the official added. A delegation of Bank and Financial Institutions Division held a meeting with the managing directors of eight state-run banks at the Finance Division auditorium on Wednesday, where they discussed how to improve the state of the banks and recover the default loans.