Book Page (Amirul)

Post-Budget Discussion

National Budget2020-2021

on

July 15, 2020 @ 8:00 PM

July 15, 2020

ICMABTHE INSTITUTE OF COST AND MANAGEMENTACCOUNTANTS OF BANGLADESH

Chief Guest : Mr. M. A. Mannan MP Hon'ble Minister, Ministry of Planning Government of the People's Republic of Bangladesh

Paper presenters : Dr. Swapan Kumar Bala FCMA Professor, Department of Accounting & Information Systems, University of Dhaka

Mr. Md. Abdus Satter Sarkar FCA, FCMA Partner, Mahfel Huq & Co., Chartered Accountants

Moderator : Mr. Md. Mamunur Rashid FCMA Vice - President, ICMAB & Deputy Managing Director, Index Group of Companies

Discussants : Dr. Atiur Rahman Bangabandhu Chair Professor, University of Dhaka & Former Governor of Bangladesh Bank

Mr. Md. Mosharraf Hossain Bhuiyan ndc Former Senior Secretary, IRD & Chairman National Board of Revenue (NBR) Mr. Ranjan Kumar Bhowmik FCMA Member (Tax Survey & Inspection), National Board of Revenue (NBR)

Mr. Asif Ibrahim Chairman, Chittagong Stock Exchange Ltd. (CSE)

Dr. Khondaker Golam Moazzem Research Director Centre for Policy Dialogue (CPD)

Webinar on "Post-Budget Discussion on

National Budget 2020-2021"

About ICMABThe Institute of Cost and Management Accountants of Bangladesh (ICMAB) is the national body of the professional Cost and Management Accountants of Bangladesh established with the prime objective of promoting and regulating the Cost and Management Accounting profession in the country. The Institute offers education and training to the students interested to pursue career in this �ield and provide highly recognized CMA degree on ful�illment of requisite quali�ication. The Institute undertakes research in relevant �ields and is the sole authority to issue practicing license to its members. The Institute is a statutory organization constituted by the Government which is regulated under the Cost and Management Accountants Act 2018 (Act No- 70 of 2018) and the Cost and Management Accountants Regulations 1980. It is the member of a number of regional and global accounting bodies.

ManagementThe Institute is governed by a Council constituted under the provision of the Cost and Management Accountants Acts 2018. The Council consists of 16 Members elected by the members of ICMAB and 5 nominees from the Government of Bangladesh. The Council is elected for a period of three years. Every year one President, two Vice-Presidents, one Secretary and one Treasurer are elected as of�ice bearers from amongst the councilors. The day to day administrative affairs of the Institute is however carried out by a team of fully employed people.

Mission The Institute's mission is to develop, equip and promote Cost and Management Accounting profession by maintaining highest professional standard of its members in order to enable them to provide better services to the society.

The Institute is entrusted with the formulation and implementation of National Accounting as well as Cost Accounting Standards and takes other necessary steps with a view to regulating the Cost and Management Accounting profession commensurate with global standard with the ultimate objective of developing Bangladesh's human and natural resources to ensure common welfare and to enrich our shared future

Vision Institute's vision is to help Bangladesh become an industrialized nation by promoting and regulat ing Cost and Management Accounting profession to enhance economic competitiveness and quality of life.

Global Af�iliationIt is the member of a number of regional and global accounting bodies like International Federation of Accountants (IFAC), Confederation of Asian and Paci�ic Accountants (CAPA) and South Asian Federation of Accountants (SAFA).

Mr. Muhammad Abdul Mannan, MP was born in Village- Dungria, Upa-Zilla-Dakhin Sunamgonj, District- Sunamgonj, Bangladesh, in 1946. He received his early education in his village school and obtained "O'-l.evel from Pakistan Air Force school, in Sargodha, Pakistan in 1962. After obtaining graduation from Dhaka University he joined the former Civil Service of Pakistan (CSP) cadre in 1974 and served in the Government of Bangladesh in various positions, including as Deputy Commissioner of Kishorgonj, Mymensing and Chittagong Districts. He worked as Joint Secretary (Political) in Ministry of Home Affairs, Director General in the Prime Minister's of�ice and Director General of NGO Affairs Bureau. He also served in the Bangladesh Permanent Mission in Geneva as Economic Minister. He retired from Government service in 2003 as Chairman of Bangladesh Small & Cottage Industries Corporation (BSCIC).

He joined Bangladesh Awami League in 2005 and was returned as Member of Parliament (MP) on Bangladesh Awami League ticket in 2008. In the 9th parliament he served as Chairman of the Parliamentary Standing Committee on Public Accounts. Besides he served as member in the Parliamentary Standing Comittee of Ministry of Public Administration, Ministry of Finance and Ministry of Defense. In the later position he represented the Honorable Prime Minister. He was elected to the Central Executive Committee of Bangladesh Awami League as member in 2010 and 2013.

Mr. Mannan is married; his wife Zolekha Mannan is a teacher in a women's college in Dhaka. His daughter Sara is a Doctor and lives in the U.S.A with her husband. His son Sadat is a Managing Director in the Barclay's Capital (Bank) in the UK and lives in London. Mr. Mannan is interested in Development literature and spends time working for the welfare of the rural people of Bangladesh.Having returned a second time as Member of Parliament in 2014 he was appointed in the new Cabinet of Prime Minister Sheikh Hasina as State Minister of Finance on 12 January in 2014. In April same year he was given the concurrent responsibility of State Minister the Ministry of Planning. After the Eleventh Parliament election, he was appointed minister of the Ministry of Planning on 7th January in 2019.

Mr. M. A. Mannan MPHonorable Minister, Ministry of Planning

Government of the People's Republic of Bangladesh

Prof. Dr. Swapan Kumar Bala FCMA has served as the Commissioner of Bangladesh Securities and Exchange Commission (BSEC) since April 19, 2016. Earlier he served Dhaka Stock Exchange (DSE) as Managing Director/CEO. Under his able leadership, DSE has been demutualized in November 2013. He began his teaching career at Dhaka University as a Lecturer of Accounting in 1991 and became Professor in 2011. He is an IFRS professional from ICAEW (UK). Dr. Bala has been the Treasurer of the Institute since the calendar year 2015. He was the Chairman, SAFA Committee on NPOs and Cooperative Sector for a period of four years from Nov. 2014. He was the Editor of the ICMAB Journal (March 2012 to Feb. 2013) and also the Chairman of Dhaka Branch Council of ICMAB (2008). He was in charge of supervising the BSEC's Committee to revise the Corporate Governance Guidelines 2012 and to prepare the Corporate Governance Code 2018. He is currently representing BSEC in the National Advisory Board (NAB) for Impact Investing in Bangladesh, He is also a Director, Board of Directors, Bangladesh Institute of Capital Market (BICM), and a Member, First Board of Governors, Bangladesh Academy for Securities Markets (BASM). Dr. Bala is a Professional Member of IMA (USA), an Associate Member of Virtual Institute, UNCTAD and a life member of the Asiatic Society of Bangladesh. He has extensive Training of Trainers (ToT) experience including Leadership ToT Programs organized by IFC at Dhaka and IIM Calcutta held at Kuala Lumpur, Malaysia. Dr. Bala also rendered professional services to Bangladesh Bank, NBR, ISTCL and BICM. He participated in several Securities Market Development Programs held in USA (SEC, US XBRL and MIT), Qatar, South Korea, Germany, Brazil, China, Maldives, the Philippines, Hong Kong, Austria, Germany, Sweden, Japan, Hungary, France and Australia. To his credit, he has 88 research articles/book chapters (26 international), 9 research monographs, 9 books (1 international), 1 study manual, 49 seminar/workshop papers and 9 entries in Banglapedia.

Dr. Swapan Kumar Bala FCMAProfessor, Department of Accounting &

Information Systems, University of Dhaka

Mr. Md. Abdus Satter Sarkar is a fellow member of Institute of Cost and Management Accountants of Bangladesh and he is also the fellow member of Institute of Chartered Accountants of Bangladesh. He is the Partner of MahfelHuq& Co. Chartered Accountants. Before joining the �irm he acted as the head of �inance of BRAC, the number one and largest NGO in the world for over a decade. Presently he is the Treasurer and Chairman of Audit Committee of ActionAid Bangladesh.

Mr. Md. Abdus Satter Sarkar FCA, FCMAFellow Member, ICMAB &

Partner, Mahfel Huq & Co., Chartered Accountants

Md. Mamunur Rashid FCMA, a Fellow Member of the Institute of Cost & Management Accountants of Bangladesh (ICMAB), was born in Bogra District on the 31st of December 1967. His academic brilliance was revealed when Mr. Rashid obtained his undergraduate degree in Bachelors of Commerce in the year 1987 and his post- graduation degree in Masters of Commerce (Management) in the year 1989, securing First Class 2nd Position and First Class 4th Position respectively both under the educational guidance and accreditation of University of Dhaka.

Presently Mr. Rashid is serving as Deputy Managing Director at Index Group of Companies. He is also serving as the Independent Director at West Zone Power Distribution Co. Ltd- An enterprise of Bangladesh Power Development Board, Nitol Insurance Co. Ltd- A public l isted Insurance company, and Board Director of several sister concern of Index C o m p a n i e s . H e h a s b e e n e l e c t e d a s t h e V i c e P r e s i d e n t o f B a n g l a d e s h C e r a m i c s Manufacturers and exporters Association (BCMEA) and the governing body member of Federation of Bangladesh Chamber & Commerce Industry (FBCCI).

His career lifted off when he started as an of�icer of Bangladesh Steel & Engineering Corporation (BSEC) in the year 1989. After that he accumulated a wealth of experience via serving in the following in�luential designations and esteemed organizations: He served as Chief Financial Of�icer at Kazi Farms Group, Director of Finance at Sheba Phone, Financial Controller & Company Secretary at Summit Power Limited, Chief Accountant at BRAC-Aarong, and Finance Manager at Desh Group of Companies. He also served in Government organizations namely, Bangladesh Power Development Board (BPDB) and Bangladesh Parjatan Corporation (BPC).

Mr. Rashid successfully completed a one year International Diploma in MIS & IT, validated by NCC Education Services, United Kingdom (U.K) which was conducted by BRAC Information Technology Institute (BITI), Bangladesh, in the year 2000.

He has been actively associated with the National Council of ICMAB. Currently he is serving as the Council member of the National Council of ICMAB. He has also served as Vice- Chairman in the year 2004 and Secretary in 1999 & 2002 of the Dhaka Branch Council of ICMAB. Mr. Rashid served as the Executive Secretary of South Asian Federation of Accountants (SAFA) for the year 2013. He has been blessed with his wife Jesmin Sultana and two daughters Tanha & Tahiya.

Mr. Md. Mamunur Rashid FCMAVice President, ICMAB &

Deputy Managing Director, Index Group of Companies

Dr. Atiur Rahmanis a Bangabandhu Chair Professor, University of Dhaka. Dr. Rahman served as the Governor of Central Bank of Bangladesh during the period of May 2009-March 2016. He occupied different positions in eminent research and academic institutions. After obtaining M.A. in Economics from Dhaka University, he pursued studies in the School of Oriental and African Studies (SOAS), University of London under a Commonwealth Scholarship, securing M.A. and Ph.D. in Economics (1983). He was also awarded a Commonwealth Development Fellowship at the University of Manitoba in Canada (1989), a Ford Foundation Post-Doctoral Fellowship at The University of London (1991-92), and a Visiting Research Fellowship, at the Institute of South-East Asian Studies, Singapore (1998-99).

The de�ining feature of Dr. Rahman's tenure as a Governor was his decisive drive reorienting the institutional objectives and ethos to support a pro-poor, inclusive and sustainable development model through his �lagship initiatives of �inancial inclusion and environmentally benign green banking. His consistent support for widespread digitization of both central banking and commercial banking has helped achieve robust transparency and accountability in the �inancial sector in Bangladesh. He made signi�icant contribution in the3GF conference,Rio+20, COP18 and MDG Global Compact international negotiations linking sustainability and socio?economic development goals as a member/panelist of Bangladesh delegation. He was also a member of the UNEP Enquiry on designing 'global sustainable �inancing'.

Dr. Rahman has published70 books (including 22 English) and dozens of articles in national and international journals.He has written extensively on Tagore's contributions towards sustainable development touching on his thinking on rural development, education environment, poverty, peasant's rights, inclusive �inance etc. He has published half a dozen books on Tagore's socio-economic thinking including `Tagore's Thoughts on Peasantry' (2017), `TaboBhuboneTaboBhavone' (2015) (collection of essays on Tagore's socio-economic thinking) and `Tagores thoughts on Sustainable Development' (forthcoming).In addition, he has written extensively on Bangabandhu `Sheikh MujibBangladesherArek Name; BangabandhuBanglasherProtichobi; including `Bangabandhu-A primer'.

Dr. Atiur RahmanBangabandhu Chair Professor, University of Dhaka &

Former Governor of Bangladesh Bank

Dr. Rahman has won many awards and Gold Medals includingthe Asiatic Society's (Kolkata) Indira Gandhi Gold Plaque-2011 for his outstanding contribution to international cooperation towards human progress, a certi�icate of world record by Hong Kong based World Record Association as the central bank governor undertaking the highest number of pro-poor and �inancial inclusive programs in the world, 'Regulator with a Human Face' by the University of Dhaka, and Manila based GUSI Peace Prize International 2014 in the �ield of Economics. Dr. Rahman has been awarded the Best Central Bank governor - Asia Paci�ic, 2015 by The Banker magazine, a Financial Times publication for his role in channeling credit towards environmentally and socially responsible development projects and as well as the Emerging Markets (a subsidiary of the Euromoney) has also awarded him the 'Central Bank Governor of the Year for Asia 2015' in recognition of his unparallel leadership to build con�idence among the mass people, visually re�lecting their faith in central bank policy. Bangla Academy has honored him with the Bangla Academy Literary Award for 2015 for his extraordinary contribution in bangla literature.

Mr. Md. Mosharraf Hossain Bhuiyan ndc joined as Senior Secretary, Internal Resources Division (IRD), Ministry of Finance and Chairman, National Board of Revenue (NBR), Bangladesh on January 04, 2018. Prior to this appointment he worked as Senior Secretary, Ministry of Industries for about two years and eight months. He started his career as a Civil Servant in BCS: Audit and Accounts Cadre, where he joined on 30 January, 1981. During the early stages of his service l i fe , Mr Bhuyian worked in different of� ices under the Comptroller and Auditor General (C&AG) of Bangladesh. After that in 1999 Mr. Bhuiyan was appointed on deputation as the Additional Director General (Member, Finance) of Bangladesh Water Development Board under Ministry of Water Resources. He held the position of Deputy Secretary, Joint Secretary and Additional Secretary of different ministries including the Ministry of Commerce, Education and Finance. He also served as Registrar, Cooperatives under Rural Development and Cooperatives Division. He was incumbent to the position of Secretary in-charge of Bridges Division under the Ministry of Communications on February 2010 and promoted as a Secretary in the same Division on July 2010. In November 2011, he was appointed as the Executive Chairman of Bangladesh Economic Zones Authority (BEZA) under Prime Minister's Of�ice. He also served as a member of Privatization Commission under PMO from January 2014 to October 2014. After that he was posted to the ministry of Industries as Secretary. He became Senior Secretary in April 2016.

Mr. Bhuiyan obtained his Honours and Master's degrees in Economics with achievements from the University of Dhaka. He also obtained an MA degree in Development Economics from Williams College, USA in 1992. In addition, he took part in several signi�icant training courses, including 'Asia-Paci�ic Course on Security Studies' in Hawaii, USA, 'Managing at the top (MATT)' in Dhaka and Singapore and NDC course in National Defence College, Dhaka. Alongside his professional responsibilities, Mr. Bhuiyan is closely involved with social development activities. He is the President of Narsingdi Upazilla Jonokollyan Somity, President of Benuka Institute of Fine Arts, Life Members of Bangladesh Economic Association and Bangla Academy, Vice President of Dhaka University Economics Department Alumni Association (DUEDAA) and Executive Member of Dhaka University Alumni Association (DUAA), Members of Dhaka Club, Gulshan Club, Uttara Club, Narsingdi Club and Of�icers Club, Dhaka. He is also the Secretary General of BCS'81 Forum.

Mr. Md. Mosharraf Hossain Bhuiyan ndcSenior Secretary (Retd.)

Internal Resources Division (IRD)Ministry of Finance

&Chairman, National Board of Revenue (Retd.)


During his long government service carrier Mr. Bhuiyan was associated with various kinds of social work in the �ield of education, health and social development alongside his government job. He has been the Chairman of Balusair High School (Narsingdi) for a long time. This school has been developed through his personal initiatives. He was associated with the establishment of the Nurunnesa High School and College (Rupgonj, Narayanganj). Moreover, he mobilized funds for development of many schools and Colleges particularly in Dhaka, Narayanganj and Narsingdi. He has also been associated with development and management of various Mosques and Madrashas. In addition, he helps various social and philanthropic organizations in mobilizing funds for their development.

In connection with government work Mr. Bhuiyan had the opportunity to travel many countries of the world such as India, Pakistan, Nepal, Myanmar, Thailand, Malaysia, Indonesia, Singapore, Srilanka, Iran, Turkey, UAE, Qatar, Saudi Arabia, Egypt, Japan, China, Hongkong, United Kingdom, Belgium, Netherlands, Denmark, Switzerland, USA, Canada, Australia, South Africa, Tanzania, Ghana, Brazil, Germany, Uganda, France and Italy. The pleasant journeys around the world prompted Mr. Bhuyian to write two books on his t r a v e l e x p e r i e n c e s w h i c h w e r e p u b l i s h e d i n 2 0 1 3 a n d 2 0 1 4 r e s p e c t i v e l y f r o m Biddyaprakash. He is the father of one son and two daughters. His son Ashraf Hossain Bhuiyan obtained MBA from Dhaka University and MPA from Cornell University, USA. Ashraf has been serving in The Infrastructure Development Company Ltd. (IDCOL) as Manager. His two daughters Samia and Sadia have been studying in Schools and Colleges. His wife Mahfuza Begum was a teacher in a Teachers' Training College, now a housewife.

Mr. Ranjan Kumar Bhowmik, FCMA is a senior member of tax family of Bangladesh. Currently he is holding the position of Member, National Board of Revenue. He joined the Taxation Cadre Service in 1989 and served the Tax department from different positions starting from Assistant Commissioner to Member, National Board of Revenue. Before this position he was Commissioner of Taxes. Before this service, he served Bangladesh Bank for 1½ years as Assistant Director and obtained Banking Diploma from The Institute of Bankers (IBB).

Mr. Bhowmik obtained his B. Com. (Honours.) and M. Com. in Accounting from the Department of Accounting, University of Dhaka in 1983 & 1984 respectively. He is an IFRS professional from ICAEW (UK). He began his teaching career as a part time faculty at ICAB and ICMAB in1992. He also rendered professional services to MPA Program of Dhaka University, BCS (Tax) Academy, BCS (Admin) Academy, Planning Academy, Judicial Administration Training Institute(JATI), BIAM, FIMA, BPI, BPATC, etc. Among other mentionable service achievements, he got cash rewards repeatedly from the National Board of Revenue (NBR) for detection of tax evasion.

Mr. Bhowmik is a regular feature writer on the changes of the Income Tax Law in the ICMAB Journal and has many publications on Tax related issues at "Tax Chronicle" published by the BCS (Taxation) Association, and also at "The Accountant" published by ICAB. To his credit, he has one study manual for probationer tax of�icials of BCS (Tax) Academy and other two study manuals for ICAB Certi�icate level and Professional level.

He actively participated in many national and international seminars, conferences, training programs and workshops on accounting and tax related issues, including training on IFRS at UK, Property Taxation at Malaysia, Financial Management at Singapore, Govt. Accounts & Finance at India, Tax & Crime-Tackling illicit �inancial �lows at Turkey, G20 Global Leadership Program at South Korea and a tax related study tour at IRS, USA.

Mr. Bhowmik is a reputed trainer in the �ield of taxation, because of his unique and engaging techniques. A �luent speaker and an excellent presenter Mr. Bhowmik combines theory and application in an effective manner. His real life experiences and attention to detail make him a knowledgeable person and a skilled trainer alike.

Mr. Ranjan Kumar Bhowmik FCMAMember (Tax Survey & Inspection), National Board of Revenue (NBR),


Asif Ibrahim was born in Dhaka, Bangladesh in the year 1965. He received his formal education from the University of Delhi (India) and the University of North Texas (USA). Mr. Ibrahim is the Vice Chairman of Newage Group of Industries, a business house involved mainly in manufacturing and exporting ready -made garments, textiles and plastic products. The Ministry of Commerce of the Government of Bangladesh awarded him the Commercially Important Person (CIP) status in the year 2007, 2012 and 2014 for his contribution in national export.

Mr. Asif Ibrahim is the former President (2011-2012) of Dhaka Chamber of Commerce and Industry (DCCI), the largest SME Trade Body of Bangladesh. He is the Former Founder Chairman (2012-2015) of Business Initiative Leading Development (BUILD), a Public Private Dialogue platform to expedite the policy reforms to enable private sector led economic growth of Bangladesh. Mr. Ibrahim served as a board member of Federation of Bangladesh Chamber of Commerce and Industry (2012-2015) and was the Chairman of the Privatization Standing Committee of FBCCI.

Mr. Ibrahim is a Director of Bangladesh Garments Manufactures and Exporters Association (BGMEA) and Bangladesh Thai Chamber of Commerce and Industry (BTCCI). Mr. Ibrahim is a member of UNESCAP Sustainable Business Network (ESBN) and is the Chairman of the UNESCAP Sustainable Business Network Taskforce on Disaster and Climate Risk Reduction.

He was also a member of the Executive Committee of Bangladesh Employers' Federation (BEF) and a Director of Bangladesh Philippines Chamber of Commerce and Industry (BPCCI)) . He has previously been in the Board of France Bangladesh Chamber of Commerce and Industry (CCIFB).

Mr. Ibrahim is a member of the Board of Advisers for BRAC Business School (BBS) under BRAC University. He is also a Core Committee member of the Eminent Citizen's platform to implement the Sustainable Development Goals (SDGs) in Bangladesh.

He was also the President (2016-2018) of Bangladesh Professional Golfer's Association (BPGA).

Mr. Asif IbrahimChairman

Chittagong Stock Exchange Ltd. (CSE)

Expertise: global value chain development, RMG and textiles, jute, labour and industrial relations, SME development, business environment analysis, Foreign Direct Investment, regional connectivity, WTO and trade related issues.

Dr Khondaker Golam Moazzem is industrial economist by profession. His major area of interests includes development of industrial enterprises, entrepreneurship development, private investment including FDI, competition policy and trade related issues at the bilateral, regional and multilateral levels. Dr Moazzem holds a PhD from the Kyoto University, Japan. He was a visiting fellow at the Centre for South East Asian Studies (CSEAS), Kyoto University. He worked as a member of various committees at both the national and international levels. Dr Moazzem has published numerous articles in international peer-reviewed journals and several book chapters and co-authored books published by CPD.

Dr. Khondaker Golam MoazzemResearch Director

Centre for Policy Dialogue (CPD)

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Post Budget discussionon National Budget

2020-2021

Presented ByMd. Abdus Satter Sarkar, FCMA, FCAPartnerMahfel Huq & Co. Chartered Accountants

N ti l B d t 2020 21National Budget 2020-21

Part-A Overview of Budget

Part-B Changes in Income TaxPart-B Changes in Income Tax

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Part-A Overview of BudgetNature of Expenditure Budget on

2020-21 % Budget 2019-20 (Revised) % Increase

in %

Operating Expenditure 352,957 62.1% 299,228 59.7% 18%Operating Expenditure 352,957 62.1% 299,228 59.7% 18%

Development Expenditure 215,043 37.9% 202,349 40.3% 6%

Total Budget 568,000 100% 501,577 100% 13%

Financing

Revenue 378,000 66.5% 348,069 69.4% 8.6%

Loan and Grant 190,000 33.5% 153,508 30.6% 24%

Total Financing 568,000 100% 501,577 100% 13%g

Sl. Particulars 2020-21 % 2019-20 %

1 Interest Payment 63,801 11.2% 57,118 10.9%2 Education and Technology 85,760 15.1% 79,486 15.2%3 Defense 30 899 5 4% 29 067 5 6%

Tk. In CroreAllocation of Expenditure

3 Defense 30,899 5.4% 29,067 5.6%4 Public Order and Security 27,794 4.9% 26,793 5.1%5 Health 29,246 5.1% 25,732 4.9%6 Subsidies and Incentives 38,688 6.8% 33,459 6.4%7 Fuel and Electricity 26,758 4.7% 28,050 5.4%8 Pension and Gratuity 27,706 4.9% 27,118 5.2%9 Public Administration 38,240 6.7% 23,997 4.6%10 Transportation and Communication 63,423 11 2% 63,679 12 2%10 Transportation and Communication 63,423 11.2% 63,679 12.2%11 Social Security and Welfare 26,742 4.7% 25,884 4.9%12 Agriculture 20,480 3.6% 19,354 3.7%13 Local Government and Rural Development 39,573 7.0% 37,884 7.2%14 Others 48,890 8.6% 45,569 8.7%

Total Revenue Income 5,68,000 100% 523,190 100%

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Sector-wise source of Income

Sl. Particulars 2020-21 % 2019-20 % % of Increase

Tk. In Crore

Increase

1 Value Added Tax 125,162 33.1% 123,067 32.6% 1.7%

2 Tax from Income and Profit 103,945 27.5% 113,912 30.2% -8.7%

3 Supplementary Duty 57,815 15.3% 48,153 12.7% 20.1%

4 Import Duty 37,807 10.0% 36,498 9.7% 3.6%

5 Non-tax Revenue 33,000 8.7% 37,710 10.0% -12.5%

6 NBR’s Other Collection 5 271 1 4% 3 970 1 1% 32 8%6 NBR s Other Collection 5,271 1.4% 3,970 1.1% 32.8%

7 Collection from Non-NBR Sources 15,000 4.0% 14,500 3.8% 3.4%

Total Revenue Income 378,000 100.0% 377,810 100.0% 0.1%

Budget Deficit Financing Target

Sl. Particulars 2020-21 % 2019-20 % % of Increase

Tk. In Crore

Increase

1 Foreign Loan 76,004 40.0% 56,163 35.6% 35.3%

2 Loan from Local Bank 84,980 44.7% 82,421 52.3% 3.1%

3 Loan from Others 25,003 13.2% 14,924 9.5% 67.5%

4 Foreign Donation 4,013 2.1% 4,168 2.6% -3.7%

Total Revenue Income 100% 157,676 100% 20.5%

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Highlights of Budget

Volume of budget is 18% of GDP

The growth rate has been fixed at 8.2 percent.The growth rate has been fixed at 8.2 percent.

The government aims to keep inflation limited to 5.4% in the coming 2020-21 financial year.

Govt. takes Tk. 3,198 crore farm mechanization project to support farmers.

Tk. 10,000 crore for fight against Covid-19.

Tk. 2,000 crore loan scheme for jobless, expat returnees.

Budget deficit will be Tk. 190,000 crore, which is 6% of the GDP.

Part-B Changes in Income Tax

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Individual and Other than Company Tax RatesTax Exempted Income

Tax Payer Previous Slab (Tk.) Current Slab (Tk.)

G l T P 250 000 300 000General Tax Payer 250,000 300,000

Women and senior citizens (65+) 300,000 350,000

Physically challenged persons 400,000 450,000

War-wounded gazette freedom fighters 425,000 475,000

For parents or legal guardians of physically challenged persons, the Nil Tax Limit would be increased by BDT 50,000.

Personal income: Individual/Firm tax ratesGeneral Tax Rate

Income Slabs(Previously)

Tax Rate(Previously)

Income Slabs(Current)

Tax Rate(Current)(Previously) (Previously) (Current) (Current)

Up to Tk. 250,000 Nil Up to Tk. 300,000 Nil

Next Tk. 400,000 10% Next Tk. 100,000 5%

Next Tk. 500,000 15% Next Tk. 300,000 10%

Next Tk. 600,000 20% Next Tk. 400,000 15%

Next Tk. 3,000,000 25% Next Tk. 500,000 20%

On balance 30% On balance 25%

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Effects on Individual Tax

Net Taxable Income Amount for GeneralTax liability

(Previously) (Tk.)Current Tax

liability (Tk.)Tax Savings

Tk. 3 lac Tk. 5,000 Nil Tk. 5,000

Tk. 5 lac Tk. 25,000 Tk. 15,000 Tk. 10,000

Tk. 10 lac Tk. 92,500 Tk. 80,000 Tk. 12,500

Tk. 20 lac Tk. 297,500 Tk. 295,000 Tk. 2,500

Tk. 30 lac Tk. 547,500 Tk. 545,000 Tk. 2,500

Tk. 50 Lac Tk. 1,060,000 Tk. 1,045,000 Tk. 15,000

* Computed for male tax payers

Tax Rate for CompanyDescription Rate 2019-20 Rate 2020-21

Publicly Traded Company 25% UnchangedNon-Publicly Traded Company 35% 32.5%Publicly Traded Bank Insurance and Financial Institution 37 5%Publicly Traded Bank, Insurance and Financial Institution 37.5%

Unchanged

Merchant Bank 37.5%Non-Publicly Traded Bank, Insurance and Financial Institution

40%

All classes of tobacco manufacturing company including Cigarette, Biri, Jorda and Gul

45%

Mobile Phone:Publicly Traded Company 40%Non-Publicly Traded Company 45%Dividend Income 20%

Readymade Garments having Green Building Certificate 10%Extended for

another 2 yearsReadymade Garments without having Green Building Certificate

12% Unchanged

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Special Tax Rate

Tax Payer Rate 2019-20 Rate 2020-21

Income from Tobacco business including Cigarette, Biri, Jordaand Gul

45%

UnchangedIncome of Individual classified as Non-resident in Bangladesh Tax payer (Excluding Non-residential Bangladeshi)

30%

Income of registered Co-operative Society 15%g p y

Special tax treatments for investment in securities

No question on the sources of fund invested in securities between 1 July 2020 and 30 June 2021. Investment withdrawal within 1 years of investment will be treated as income in that income year.

10% Tax on the investment amount will need to be paid within 30 days of investment

Finance Act 2020 reduced the investment lock-in period to 1 year from 3 years which was proposed in the Finance Bill 2020. This gives more flexibility to the investor

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Special tax treatments (section 19BBBBB) 2019-20 2020-21

No question would be raised over the sourceof fund for construction or purchase of

Limitation to only residential buildings,apartment have been removed.p

residential buildings, apartment etc.p

Hence, all buildings and apartment would bewithin the scope.

This investment opportunity is only applicable for future investments!!All building and apartment would be included.

Special tax treatments (section 19AAAAA)No question will be raised over the source of fund of certain previously undisclosed investments

Land Tk. 500 to Tk. 20,000 Tax per sq. meter will need to be paid depending onl tilocation.

Buildings Tk. 200 to 6,000 Tax per sq. meter will need to be paid depending on area

Cash & savingsinstruments

10% Tax on the total amount

This opportunity will not apply if any proceeding has been initiated under any law before 30 June 2020

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Expense allowance

Overseas travelling expenses limit 1.25% reduced to 0.5% of turnover

Promotional expenses limit 0 5% of turnoverPromotional expenses limit 0.5% of turnover(any expense incurred by way of giving anybenefit in kind or cash or in any other form forthe promotion of business or profession)

Royalty expense computation Net profit used for allowance computation willexclude profit or income of subsidiary orassociate or joint ventureassoc ate o jo t e tu e

Foreign income by residents (section 52Q)10% Tax is deducted on fee, service charges, commission or remuneration or similar foreign income by banks

Nature of foreign income include

• providing any service rendered in Bangladesh

• rendering any service or performing any task by aresident person in favour of a foreign person

• allowing the use of any online platform foradvertisement or any other purposes

10% Tax deduction is exempted on Para 48 Part A Sixth Schedule Income brought in by banking channel

Para 33 Part A Sixth ScheduleProceeds of sales of software or IT services is included

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Professional services and technical services

Wheeling charge for electricity transmission

Ferro alloy products

Inclusion in scope of Minimum Tax Regulations

Minimum Tax based on gross receiptsWill be paid by All companies

Firms with gross receipts over Tk. 50 lakh

Individuals with gross receipts over Tk. 3 crore

Nature of Company % of tax on gross receiptsp y g p

Manufacturer of cigarette or tobacco products 1%

Mobile phone operator 2%

Individuals other than mobile operator & tobacco manufacturer 0.5%

Others 0.6%

Tax exemptions for individuals (Sixth Schedule)

2019-20 exemption 2020-21 exemption

A i O l G d i f dAny pension Only Government or an approved pension fund

Any gratuity up to certain limit Only Government or an approved gratuity fund

Any income earned from alternative investmentfund recognised by BSEC

Any income earned by alternative investment fund recognised by BSEC

• Unapproved pension fund• Unapproved gratuity fund

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Advance income tax for private car ownersAdvance income tax payment for private motor car owners at the time of registration or fitnessrenewal

Type of car / engine capacity 2019-20 2020-21

Car or Jeep capacity up to 1500cc Tk 15 000 Tk 25 000Car or Jeep, capacity up to 1500cc Tk. 15,000 Tk. 25,000

Car or Jeep, capacity from 1500cc to 2000cc Tk. 30,000 Tk. 50,000




Car or Jeep, capacity over 3500cc Tk. 125,000 Tk. 200,000

Microbus Tk. 20,000 Tk. 30,000, ,

50% higher tax with each additional vehicle

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1

Post-Budget Discussion on National Budget 2020-2021

Webinar

Presentation onNational Budget 2020-21 and Changes in

VAT and SD

Presentation by:Prof. Dr. Swapan Kumar Bala, FCMA

15.07.2020

• National Budget 2020-2021• National Budget 2020-21: COVID-19 responsive?

Points to be discussed:

g pNational Budget 2020-21: Overall Structure

• National Budget 2020-21: Tax Structure• National Budget 2020-21: VAT & SD• Changes in VAT & SD Act 2012• Changes in VAT & SD Act 2012• Changes in VAT & SD Rules 2016

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National Budget 2020-2021 • 8th Session (Budget Session) of 11th Parliament started 10 June 2020• National Budget 2020-21 was

Country’s 49th national budgety g Awami League Government’s 21st budget Finance Minister AHM Mustafa Kamal’s 2nd budget

• Tabled in the Parliament on 11 June 2020 (2nd working day of the Budget Session)• Finance Minister placed the budget starting with speech, then presented digitally with recorded commentator’s voice, at the end, concluded with speech• Finance Bill 2020 also placed after Budget Speech on 11 June 2020• Finance Bill was passed on 29 June as the Finance Act 2020 (6th working day)• Budget passed on 30 June 2020 (7th working day)• Budget Session of the Parliament prorogued on 09 July 2020 (9th working day)

National Budget 2020-21: COVID-19 responsive?

• National budget placed on 96th day of Corona Outbreak in Bangladesh after 08 March 2020 with several precautionary measures

• Budget Session was for only 09 working days (June 10, 11, 14, 15, 23, 29, 30, and July 08, 09)

• Budget activity was for only 06 working days (June 11, 14, 15, 23, 29, and 30)3, 9, a d 30)

• For COVID-19, Speakers, Ministers and MPs attended the session, all wearing masks and other protective gear

• Number of on-duty officials also cut in the house

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COVID-19: Global and Bangladesh ScenariosGlobal BangladeshFirst case on 31 Dec 2019crosses 100 on 19 Jan 2020 First case on 08 March 2020crosses 100 on 06 April

Confirmed Cases

crosses 100 on 19 Jan 2020crosses 1,000 on 25 Jancrosses 10,000 on 01 Febcrosses 100,000 on 06 Marcrosses 1,000,000 on 04 Aprcrosses 10.000,000 on 29 Junecrosses 100 on 06 Aprilcrosses 1,000 on 15 Aprilcrosses 10,000 on 04 Maycrosses 100,000 on 18 Junecrosses 150,000 on 02 Julycrosses 175,000 on 09 July

11 Jun: 7,274,310 cases 74,865 (1.03% of the world)30 Jun: 10,193,723 cases 141,801 (1.39% of the world)08 July: 11,635,939 cases 168,645 (1.45% of the world)183,795 cases on 12 July 2020

Budget placed on

Budget passed

on

COVID-19: Global and Bangladesh ScenariosGlobal BangladeshFirst death on 16 Jan 2020crosses 100 deaths on 28 Jan

First death on 19 March 2020crosses 100 deaths on 20 April

Deaths

crosses 100 deaths on 28 Jancrosses 1,000 deaths on 11 Febcrosses 10,000 deaths on 20 Marcrosses 100,000 deaths on 11 Aprcrosses 500,000 deaths on 30 Jun

crosses 100 deaths on 20 Aprilcrosses 500 deaths on 25 Maycrosses 1,000 deaths on 10 Junecrosses 2,000 deaths on 05 July

11 Jun: 413 385 deaths 1 012 (0 24% of the world)Budget 11 Jun: 413,385 deaths 1,012 (0.24% of the world)30 Jun: 503,867 deaths 1,783 (0.35% of the world)08 July: 539,026 deaths 2,151 (0.40% of the world)

2,352 deaths on 12 July 2020

placed on

Budget passed

on

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National Budget 2020-21: COVID-19 responsive?

• In 136-page English-version Budget Speech 2020-21 [6-page initials, 110-page body & 20-page annexure]: the term “CPVID-19” was used 64 times on 42 pages twice on 2 initial pages on cover and table of64 times on 42 pages – twice on 2 initial pages on cover and table of contents; and 62 times on 40 pages of the body of speech.• Government has declared a number of stimulus packages to support the emergency healthcare services, to protect jobs and to achieve smooth economic recovery:• First package of BDT 5,000 crore (US$590mn) announced by PM on 25First package of BDT 5,000 crore (US$590mn) announced by PM on 25 March 2020 (on 18th day of first COVID-19 case in Bangladesh)• Budget speech includes the economic recovery packages declared so far (from 25 March to 10 June 2020), which totaled Tk. 1,03,117 crore under 19 packages, which is 3.7% of GDP.

National Budget 2020-21: Overall StructureParticulars A FY16 A FY17 A FY18 A FY19 B FY20 RB FY20 B FY21

Revenue 172,953 201,210 216,555 251,879 377,810 348,069 378,000Tax Revenue 151,887 178,074 194,326 225,958 340,100 313,067 345,000

NBR Tax Revenue 146,242 171636 187,103 218,616 325,600 300,500 330,000Non-NBR Tax Rev. 5,645 6,438 7,223 7,342 14,500 12,567 15,000

Non-Tax Revenue 21,066 23,136 22,229 25,921 37,710 35,002 33,000Total Expenditure (TE) 238,433 269,499 321,862 391,690 523,190 501,577 568,000

ADP 79,351 84,093 173,000 147,287 202,721 192,921 205,145Non-ADP 159,082 185,406 148,862 244,403 320,469 308,656 362,855

Deficit (excl. Forn. Grants) -65,480 -68,289 -105,307 -139,811 -145,380 -153,508 -190,000(% of GDP) (3.79) (3.49) (4.70) (5.51) (5.04) (5.47) (5.99)

Financing 65,485 68,289 105,304 139,811 145,379 153,508 190,000Foreign Grants 1,889 701 868 1,677 4,168 3,454 4,013Forn Borrowing-Net 12,866 11,603 25,621 31,289 63,848 52,709 76,004Domestic Borrowing 50,730 55,985 78,815 106,845 77,363 97,345 109,983

Deficit incl. Forn. Grants (% of GDP) (3.68) (3.46) (4.67) (5.45) (4.89) (5.35) (5.86)

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National Budget 2020-21: Overall StructureParticulars A FY19 % of TE B FY20 % of TE RB FY20 % of TE B FY21 % of TE

Revenue 251,879 64.3 377,810 72.2 348,069 69.4 378,000 66.5Tax Revenue 225,958 57.7 340,100 65.0 313,067 62.4 345,000 60.7

NBR Tax Revenue 218,616 55.8 325,600 62.2 300,500 59.9 330,000 58.1Non-NBR Tax Rev. 7,342 1.9 14,500 2.8 12,567 2.5 15,000 2.6

Non-Tax Revenue 25,921 6.6 37,710 7.2 35,002 7.0 33,000 5.8Total Expenditure (TE) 391,690 100.0 523,190 100.0 501,577 100.0 568,000 100.0

ADP 147,287 37.6 202,721 38.7 192,921 38.5 205,145 36.1Non-ADP 244,403 62.4 320,469 61.3 308,656 61.5 362,855 63.9

Deficit (excl. Forn. Grants) -139,811 -35.7 -145,380 -27.8 -153,508 -30.6 -190,000 -33.5Financing 139,811 35.7 145,379 27.8 153,508 30.6 190,000 33.5

Foreign Grants 1,677 0.4 4,168 0.8 3,454 0.7 4,013 0.7Forgn. Borrowing-Net 31,289 8.0 63,848 12.2 52,709 10.5 76,004 13.4Domestic Borrowing 106,845 27.3 77,363 14.8 97,345 19.4 109,983 19.4

National Budget 2020-21: Tax StructureParticulars A FY16 A FY17 A FY18 A FY19 B FY20 RB FY20 B FY21

NBR TaxTaxes on Income 45,078 52,433 59,031 67,293 113,912 102,894 103,945Value Added Tax 54,576 63,757 68,222 85,011 123,067 109,846 125,162Supplementary Duty 26,133 31,487 36,510 38,426 48,153 47,135 57,815Import Duty 17,796 20,763 19,986 24,282 36,498 33,684 37,807Export Duty 30 22 31 115 54 49 55Excise Duty 1,560 1,791 2,117 2,339 2,239 5,345 3,686Other Taxes 1,067 1,384 1,209 1,150 1,677 1,547 1,530

Total NBR Taxes 146,241 171,637 187,106 218,616 325,600 300,500 330,000Total Non-NBR Tax 5,644 6,438 7,222 7,342 14,501 12,567 15,000

Total Tax 151,886 178,075 194,328 225,958 340,101 313,067 345,000Tax-GDP Ratio 8.78 9.10 8.68 8.91 11.78 11.16 10.88Tax-GDP Ratio (Budget) 10.62 10.73 11.55 12.05

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National Budget 2020-21: Tax StructureParticulars A FY19 % of TT B FY20 % of TT RB FY20 % of TT B FY21 % of TT

NBR TaxTaxes on Income 67,293 29.78 113,912 33.49 102,894 32.87 103,945 30.13Value Added Tax 85,011 37.62 123,067 36.19 109,846 35.09 125,162 36.28Supplementary Duty 38,426 17.01 48,153 14.16 47,135 15.06 57,815 16.76Import Duty 24,282 10.75 36,498 10.73 33,684 10.76 37,807 10.96Export Duty 115 0.05 54 0.02 49 0.02 55 0.02Excise Duty 2,339 1.04 2,239 0.66 5,345 1.71 3,686 1.07Other Taxes 1,150 0.51 1,677 0.49 1,547 0.49 1,530 0.44

Total NBR Taxes 218,616 96.75 325,600 95.74 300,500 95.99 330,000 95.6516 84 48 94 37 46 9 82Increase (Y-to-Y) 16.84A FY18 48.94A FY19 37.46A FY19 9.82RB FY20Total Non-NBR Tax 7,342 3.25 14,501 4.26 12,567 4.01 15,000 4.35

Total Tax 225,958 100.00 340,101 100.00 313,067 100.00 345,000 100.00Increase (Y-to-Y) 16.28A FY18 50.52A FY19 38.55A FY19 10.20RB FY20

National Budget 2020-21: VAT & SDParticulars A FY16 A FY17 A FY18 A FY19 B FY20 RB FY20 B FY21

VAT & SDValue Added Tax (VAT) 54,576 63,757 68,222 85,011 123,067 109,846 125,162Increase (Y-to-Y) 20.30A FY15 16.82A FY16 7.00A FY17 24.61A FY18 44.77A FY19 29.21A FY19 13.94RB FY20Increase (Y to Y) A FY15 A FY16 A FY17 A FY18 A FY19 A FY19 RB FY20Supplementary Duty (SD) 26,133 31,487 36,510 38,426 48,153 47,135 57,815Increase (Y-to-Y) 23.97A FY15 20.49A FY16 15.95A FY17 5.25A FY18 25.31A FY19 22.66A FY19 22.66RB FY20

Total VAT & SD 146,241 171,637 187,106 218,616 325,600 300,500 330,000% of Total Tax 53.14 53.49 53.90 54.63 50.34 50.14 53.04Increase (Y-to-Y) 21.46 18.01 9.96 17.86 38.71 27.17 16.56Increase (Y to Y) A FY15 A FY16 A FY17 A FY18 A FY19 A FY19 RB FY20

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Changes in VAT & SD Act 2012

• Finance Act 2020 has 8 Chapters, 82 Sections, 2 Schedules• Four Tax Statutes amended by 80 sections (Sec. 2-81):

Excise & Salt Act 1944 (06 sections of FA; Sec 2-7) Excise & Salt Act 1944 (06 sections of FA; Sec. 2-7) Customs Act 1969 (08 sections of FA; Sec. 8-15) Income-tax Ordinance 1984 (38 sections of FA; Sec. 16-53) VAT & SD Act 2012 (28 sections of FA; Sec. 54-81)

Changes in VAT & SD Act 2012Chapter Sections Schedules Schedule-1 Schedule-2 Schedule-3

As on 01 July 2019

18 146 3 1st Part &2nd Part

Table-1, Table-2 & Table-3

Table-1 (Parts A & B), Table-2 (Parts A & B), Table-3 (Parts A & B) & Table-4 (Parts A & B)

Amend-ment by FA2020

12 25 (3 subs. Sec.

48, 53 &68)

3 1st Part &2nd Part

Table-1 (subs), Table-2 & Table-3

Table-1 (Parts A & B), Table-2 (Part B), Table-3 (Part B) & Table-4 (Part A)

As on 01 July 2020

18 146 3 1st Part &2nd Part

Table-1, Table-2 &

Table-1 (Parts A & B), Table-2 (Parts A & B),

Table-3 Table-3 (Parts A & B) & Table-4 (Parts A & B)Sch-1: Goods and Services exempted from VAT: First Part on “Goods”; Second Part on “Services”

Sch-2: Goods and Services subject to SD: Table-1 (Goods at Import Stage), Table-2 (Goods at Supply Stage) and Table-3 (Services at Supply Stage)

Sch-3: Goods and Services subject to VAT (non-standard rate): Table-1 [Part-A (Goods @ 5%) & Part-B (Services @ 5%)], Table-2 [Part-A (Goods @ 7.5%) & Part-B (Services @ 7.5%)], Table-3 [Part-A (Goods @ 10%) & Part-B (Services @ 10%)], Table-4 [Part-A (Goods @ per MT/kg/thousand/100 cft) & Part-B (Services @ per SIM card)

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Changes in VAT & SD Rules 2016• VAT & SD Rules 2016 amended by S.R. No. 142-Ain/2020/103-

Musak, dated 11 June 2020.

Ch t R l FChapter Rules FormsAs on 01 July 2019 18 123 73

Amendment by SRO 142

8 12 amend., 2 subs., 4 new, 2 deleted

8 subs., 2 new

As on 01 July 2020 18 125 75

2 subst. Rules 21 & 109; 4 new Rules 24A, 24B, 24C, & 118B 2 deleted Rules 53 & 112

5 definitions amended, 6 definitions substituted, 1 definition inserted• Clauses amended: (57), (62), (74), (82) and (92)

Changes in Statutory Definitions: Sec. 2Changes in VAT StatutesChapter I (Preliminary): Sec. 1-3/Rules 1-2

• Clauses substituted: (17), (19), (28), (38), (40) and (103)• New Clause inserted: (18A)

Definition of “imported service” u/s 2(17): open-ended scope

Previous Present“imported service” means supply of any service made from outside Bangladesh to a person registered or required to be registered

“imported service” means supply of any service made from outside Bangladesh to a person registered or required to be registered

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Changes in Statutory Definitions: Sec. 2Definition of “input” u/s 2(18A): new definition [Sec. 68 amended/Rule 53 deleted]

Previous Present

✖“Input” means all raw materials, laboratory reagent, laboratory equipment, laboratory accessories,

Changes in VAT StatutesChapter I (Preliminary): Sec. 1-3/Rules 1-2

✖p , y g , y q p , y ,

any particular used as fuel, packing materials, services, machines and parts of machines. Following goods and services are excluded: — Land, labour, building, office equipment and fixtures, buildings/ infrastructures construction,

maintenance, repair, renovation — All furniture, office supplies, stationary materials, refrigerator, air conditioner, fan, lighting

materials, generator purchase and repair — Interior design, architecture planning & design

L d t l t f t t ti— Lease and rental payments for transportation — Travelling, entertainment, goods and services related to employee welfare related activities — Rentals for office premises, showrooms However, the above items can be considered as input for a trader who purchase those items for its trading business.

Sec. 68: Carry Forward of Negative Net Amount and Refunds; Rule 53: Refund for construction, construction of house or building, development of land or property and conduct of other economic activities

Changes in Statutory Definitions: Sec. 2Definition of “input tax” u/s 2(19): 1 thing deleted Previous Present“i ” h VAT ( Ad “i t t ” th VAT ( t Ad T ) id


“input tax” means the VAT (except Advance Tax) paid by any registered person at import stage against imported goods and services as inputs and VAT paid against purchase of goods or services or immovable property from local sources

“input tax” means the VAT (except Advance Tax) paid by any registered person at import stage against imported goods and services as inputs and VAT paid against purchase of goods or services or immovable property from local sources

Definition of “tax determination” u/s 2(28): Title of Chap 11 amended

Previous Present“tax determination” means an assessment of net payable tax by any taxpayer by any Commissioner under Chapter Eleven (Se. 73-77)

“tax determination” means an assessment of net payable tax by any taxpayer by any appropriate official under Chapter Eleven (Se. 73-77)

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Changes in Statutory Definitions: Sec. 2Definition of “company” u/s 2(38): correctedPrevious Present“ ” i i d “ ” tit i t d


“company” means an entity incorporated as a company under the Companies Act, 1994 (Act No. XVIII of 1994)

“company” means an entity incorporated as a company under an existing Act of Bangladesh or any other country

Definition of “Chalan” u/s 2(40): corrected to “Chalanpatra” (invoice)…. means a document showing the liability of the payment of any consideration

Previous PresentTaka 3 crore over each 12-month period excluding some value

A new proviso added to clarify that VAT registration is mandatory (irrespective annual turnover) for goods or services mentioned in General Order No. 17/Musak/2019, dt 17 July 2019 [86 goods at production stage, 79 services at supply stage, 10 goods at trade stage]

Definition of “registration threshold” u/s 2(57): clarified

Changes in Statutory Definitions: Sec. 2Definition of “deemed export” u/s 2(62): corrected ???Previous Present2(62)( ) l f i di f d i i ib d f d


2(62)(a): supply of any ingredient of goods or service in a prescribed manner against foreign exchange and destined for consumption outside Bangladesh

…. any of goods or service …..

Definition of “person” u/s 2(74): expanded with open-ended itemnew sub-clause (g): any other business organization.

Previous Present“export” means a supply of any goods from inside to outside the geographical limits of Bangladesh, and also includes a deemed export

“export” means a supply of any goods from inside to outside the geographical limits of Bangladesh, and also includes a deemed export

Definition of “export” u/s 2(82): amended

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Changes in Statutory Definitions: Sec. 2Definition of “integrated tax invoice and withholding certificate” u/s 2(92): corrected

Last year, Rule 40 amended to consider “Tax Invoice” as “integrated tax invoice and withholding certificate”; This year Clause (92) of Sec 2 amended and Section 53 substituted for this


certificate ; This year Clause (92) of Sec. 2 amended and Section 53 substituted for this. Sec. 49(2) & 50(3) amended

Previous Present“decreasing adjustment” means any of the following:-(a) a decreasing adjustment for the money paid as advance tax;(b) d i dj ll d li f

(103) “decreasing adjustment” means any of the following:-(a) a decreasing adjustment for the money paid as advance tax;(b) d i dj ll d li f

Definition of “decreasing adjustment” u/s 2(103): reduced scope [Sec. 48 amended]

(b) a decreasing adjustment allowed to a supplier of telecommunication goods or services; [Section 38(5)](c) a decreasing adjustment in respect of withholding tax against the supply given by supplier;(d) a decreasing adjustment applicable as a result of an annual re-calculation-------

(b) a decreasing adjustment allowed to a supplier of telecommunication goods or services; [Section 38(5)](b) a decreasing adjustment in respect of withholding tax against the supply given by supplier;(c) a decreasing adjustment applicable as a result of an annual re-calculation or as result of audit;(d) a decreasing adjustment because of issuing a credit note; New

Changes in Statutory Definitions: Sec. 2

Previous Present( ) d d f d f

Definition of “decreasing adjustment” u/s 2(103): reduced scope


…..

(e) a decreasing adjustment on being registered; [Rule 31](f) a decreasing adjustment in relation to second-hand goods purchased for re-sale; [Rule 33](g) a decreasing adjustment in relation to an indemnity payment under a policy of insurance; [Rule 34](h) a decreasing adjustment in relation to a monetary prize paid for a lottery lucky draw raffle or similar undertaking;

(e) a decreasing adjustment of input tax paid in case of export; New(e) a decreasing adjustment on being registered; [Rule 31](f) a decreasing adjustment in relation to second-hand goods purchased for re-sale; [Rule 33](g) a decreasing adjustment in relation to an indemnity payment under a policy of insurance; [Rule 34](h) a decreasing adjustment in relation to a monetary prize paid for a lottery lucky draw raffle or similar undertaking;paid for a lottery, lucky draw, raffle or similar undertaking;

[Rule 35]

(i) a decreasing adjustment where there is a decrease in the VAT rate;

paid for a lottery, lucky draw, raffle or similar undertaking; [Rule 35]

(f) a decreasing adjustment where there is a decrease in the VAT rate;

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Changes in Statutory Definitions: Sec. 2

Previous Present

Definition of “decreasing adjustment” u/s 2(103): reduced scope


…..(j) a decreasing adjustment allowed to refund of supplementary duty; [Section 62 and Rule 45]

(k) a decreasing adjustment claimed for a negative net amount carried forward from a previous tax period;

(l) a decreasing adjustment allowed for VAT overpaid in a previous tax period;

(j) a decreasing adjustment allowed to refund of supplementary duty; [Section 62 and Rule 45]

(g) a decreasing adjustment claimed for a negative net amount carried forward from a previous tax period;

(h) a decreasing adjustment allowed for VAT overpaid in a previous tax period;previous tax period;

(m) any other prescribed decreasing adjustment.previous tax period;(i) any other prescribed decreasing adjustment.

Old 13 clauses – Old 6 clauses deleted + New 2 Clauses added = 9 clauses after substitution

1 clause amended to be wider [new clause (c), old clause (d)

Changes in VAT StatutesSec. 5, 8 and 12; Rules 7, 8 and 9 amended Sec. 5: Registration• Sub-sec. (1): “prescribed manner” replaced by “prescribed condition and manner”• Second proviso added sec. 5(1) to empower NBR to make rules on central registration

Chapter II (VAT Registration and Turnover Tax Enlistment): Sec. 4-14/Rules 3-15

p ( ) p gSec. 8: Voluntary VAT Registration• Sub-sec. (1): “prescribed condition and manner” deleted to correct the languageSec. 12: Registration or Enlistment, by the Commissioner, suo moto, of persons required to

be registered or enlisted• “by the Commissioner” deleted from the title• word “Commissioner” replaced by “Official concerned” twice• field-level Divisional Officer is empowered to give registration or enlistment

[NOTE: VAT @ applicable rate and TT @ 4% from 1 July 2019 or @ 3% earlier, to be collected from the relevant starting date and with 2% monthly interest rate u/s 127]

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Changes in VAT StatutesSec. 5, 8 and 12; Rules 7, 8 and 9 amended Rule 7: Registration or Enlistment, by the Commissioner Divisional Officer, on his own initiative• In sub-rules (1), (2), (4), and (5), word “Commissioner” replaced by “Divisional Officer”

Chapter II (VAT Registration and Turnover Tax Enlistment): Sec. 4-14/Rules 3-15

Rule 8: Cancellation of VAT Registration• “in form ‘Mushak-2.1’ in case of online application for clause (d), paper application, and in

case of online application for clauses (a) to (c)” deleted since form “Mushak-2.1” is “VAT/Turnover Tax Registration Form” and not for cancellation purpose

Rule 9: Cancellation of TT Enlistment• “in form ‘Mushak-2 1’ in case of online application and in case of paper application”in form Mushak 2.1 in case of online application, and in case of paper application

deleted since form “Mushak-2.1” is “VAT/Turnover Tax Registration Form” and not for cancellation purpose

Changes in VAT StatutesSec. 31, 32 and 33; Rules 19 amended, 21 subst., 24A, 24B & 24C inserted Sec. 31: Payment of Advance Tax on Import and Its Adjustment• Sub-sec. (2): 5% usual rate of Advance Tax (AT) at import stage was reduced to 4% for

“imported inputs”

Chapter IV (VAT Collection Method): Sec. 27-44/Rules 19-24C [ with new sections 24A, 24B, and 24C]

• Sub-sec. (3): Tax period for adjusting AT increased from 2 Tax Periods to 4 Tax Periods [1 period being 1 month in Gregorian calendar u/s 2(30)]

Sec. 32: Determination of Value of the Taxable Supply• Past: Sub-sec. (2): The consideration for a taxable supply of an imported service shall be

the value determined as per sub-section (1) [= Consideration u/s 2(59) minus Tax-fraction u/s 2(29)] or, if the supplier and the recipient of the supply are related to each other, then the determined fair market price of the said service

• Present: Sub-sec. (2): The consideration for a taxable supply of an imported service shall be the value of the supply determined as per sub-section (1) or, if the supplier and the recipient of the supply are related to each other, then the determined fair market price of the said service

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Changes in VAT StatutesSec. 31, 32 and 33; Rules 19 amended, 21 subst., 24A, 24B & 24C inserted Sec. 33: Time of Payment of VAT on Taxable Supplies• Usually at the earliest of following: supply, invoice-issue, partial/full payment of

consideration, or consumption


COVID-19

• Sub-sec. (3): Time for payment of VAT imposed on utility bills [water, gas, oil or electricity] enhanced from 60 days to 90 days from date of invoice-issue

Rule 19: Adjustment and Refund of Advance Tax Paid at Import Stage• Sub-rule (3)(b): Application for getting refund of AT within 120 days [previously 60 days] to

be made online or in paper [previously only ‘online’] Rule 21: Declaration of Input-Output Coefficient

COVID-19

COVID-19Rule 21: Declaration of Input Output Coefficient• Time extended for sending form “Mushak-4.3” (input-out coefficient) to Commissioner

from 7 to 15 working days• No requirement for 100% export-oriented industrial undertaking in cases of exportable or

exported goods

COVID 19

Changes in VAT StatutesSec. 31, 32 and 33; Rules 19 amended, 21 subst., 24A, 24B & 24C inserted Rule 24A: Disposal of Inputs Unused or Inappropriate for Use• Application in form “Mushak-4.4” to Divisional Officer, who is to decide within 15 working

days from being intimated, send a report to Commissioner within 7 days after decision-ki


NEW

making;• Credit taken on above inputs to be treated as “increasing adjustment” [u/s 2(71)]Rule 24B: Disposal of Goods damaged by Accident or Destroyed• Application within 2 days of accident in form “Mushak-4.5” to Divisional Officer, who is to

decide within 30 days from being intimated, send a report to Commissioner within 7 days after decision-making;

NEW

• Credit taken on above inputs to be treated as “increasing adjustment” or “adjustment by cancelling input tax”

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Changes in VAT StatutesSec. 31, 32 and 33; Rules 19 amended, 21 subst., 24A, 24B & 24C inserted Rule 24C: Supply and Disposal of Waste and By-Product• Application in form “Mushak-4.3” to Divisional Officer• Value to be determined u/r 6 of Determination of FMV Rules 2019


NEW

/• Waste or by-product inappropriate for supply, may be fully demolished or destroyed

subject to compliance with provisions of the Environmental Conservation Act 1995 or any rules made thereunder

• Divisional Officer is to send a report to Commissioner within 7 days after demolition or destruction

Changes in VAT StatutesSec. 46, 48, 49 and 50; No Rule amended

Chapter V (Determination and Payment of Net Payable Tax by the Taxpayer): Sec. 45-50/Rules 25-39

Sec. 46: Input Tax Credit (ITC)• Sub-sec. (1): No ITC against VAT imposed on a taxable supply–• Cl. (c): ITC not allowed if not taken within 2 succeeding tax periods, NOW extended to 4 periods• Cl. (e) ITC not allowed if goods/services not entered into the Purchase Book, NOW into Purchase

Book [“Mushak-6.1”] or Purchase-Sales Book [“Mushak-6.2.1”]• NEW Cl. (n): ITC not allowed if new input-out coefficient [“Mushak-4.3”] not submitted, in case of

changes in value of inputs by more than 7.5%• Sub-sec. (2): No ITC against an acquisition or import–• NEW Cl. (d): Against an acquisition, ITC not allowed if the acquisition exceeds 80% of costs in

relation to transport service of goods • Sub-sec. (3): Documents to be submitted to claim ITC while filing Return–• Cl. (d): reference of Sec. 20(5) corrected o Sec. 20(2) in relation to “import of service” [Treasury

Chalan as document]• NEW Cl. (e): In case of ITC for VAT paid on Utility Services [gas, water, electricity and telephone],

issued bill, to be treated as invoice

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Sec. 48: Adjustment ……. SubstitutedPrevious mixed-up adjustments (no sub-sections)…. separated into 2 sub-sectionssub-sec. (1) for “increasing adjustments” [sec. 2(71)]( ) g j [ ( )]sub-sec. (2) for “decreasing adjustments” (DA) [sec. 2(103), subst. FA2020]Following items deleted from the list of DA, but relevant Rules are still in place:(1) a DA on being registered; [Rule 31](2) a DA in relation to second-hand goods purchased for re-sale; [Rule 33](3) a DA relation to insurance; [Rule 34]( ) ; [ ](4) a DA in relation to a monetary prize paid for a lottery, lucky draw, raffle draw or similar

undertaking; [Rule 35](5) a DA to a supplier of telecommunication goods or services; [Section 38(5)](6) a decreasing adjustment allowed to refund of SD; [Section 62 and Rule 45]



Sec. 49: Tax withholding at source and increasing adjustment by withholding entity • Sub-sec. (1): “Notwithstanding anything contained in the provisions in Section 33” (Time of

payment of VAT on taxable supply), added to prevail provisions of section 49 over section 3333

• Sub-section (2): words “integrated tax invoice and withholding certificate” replaced by words “tax invoice” to correct as per provisions of sec. 2(92)

• NEW Sub-sec. (5): In case of a project, primarily main service-recipient is to withhold tax, and thereafter withholding tax is not applicable for sub-contractor, agent or employed person of the main service-recipient for supply of “services”, but NOT for purchasing “goods” under the projectgoods under the project

Sec. 50: Decreasing adjustment by the supplier after the tax withheld at source • Sub-section (3): words “integrated tax invoice and withholding certificate” replaced by

words “tax invoice” to correct as per provisions of sec. 2(92)

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Changes in VAT StatutesSec. 53 subst. ; Rule 40 amendedSec. 53: Integrated tax invoice and Withholding certificate …….. See Sec. 2(92)• Application for getting refund of AT within 120 days [previously 60 days] to be made online

or in paper [previously only ‘online’]

Chapter VI (Invoices and Documents ): Sec. 51-54/(Accounting of VAT & TT) Rules 40-44

Rule 40: Accounting of VATSub-rule (1)(c) Tax Invoice is to be issued in following manner–• Sub-clause (v) [hraswa U]

Description of goods supplied, quantity, actual date of supply, time and type of conveyance and numberS b l ( ii) [ A A]• Sub-clause (xii) [sware A sware A]Main Chalanpatra is to be given to buyer and to be kept with the conveyance during transport

Changes in VAT StatutesSec. 64; Rule 47 amended

Chapter IX (Filing of Return and Rectification Thereof): Sec. 64-67/Rules 47-51

Sec. 64: Filing of Return • Sub-section (1): Return to filed within maximum 15 days after expiry of tax period• NEW proviso: If 15th day is holiday, on next working dayp y y, g y• NEW Sub-section (1A): Notwithstanding anything contrary contained in other provisions,

the Board, with prior approval of the Government, due to natural disaster, epidemic, sudden-adversity or war, may through order, in the public interest, after allowing exemption from collecting interest and fines for such time in need, extend the time-limit of filing return.

• NEW Sub-section (1B): The order mentioned in sub-section (1A) may be made effective

COVID-19

retrospectively.Rule 47: Filing of Return• Sub-rule (3): Place of filing return: “Local VAT Office” added, but place must be “related”,

not “convenient”; prescribed “Service center” replaced by “place”

COVID-19

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Changes in VAT StatutesSec. 78: VAT Authority and Officers Thereof• NEW Authority: DG, Duty Exemption and Drawback Office [u/s 78(1)(ff)]Sec. 73: Tax Determination• Sub-sec (1) authority distributed from “Commissioner” to “appropriate officials” stated in

Various Chapters: CHANGES IN VAT AUTHORITY

• Sub-sec. (1) authority distributed from Commissioner to appropriate officials stated in Table u/s 86 [Monetary limits of the VAT officials in initiating a proceeding for adjudication]

• NEW sub-sec (5): Authority delegated to lower-level official not below the rank of Assistant Commissioner

Sec. 83: Power to enter and search by VAT officers• By VAT officer not below the rank of Assistant Commissioner/Director authorized by

C i i l d ti b i i ti b k th it b i t t d tCommissioner; only on day time by giving notice; bank authority may be instructed to freeze bank accounts;

• New sub-sec. (4): Overriding authority given to Divisional Officer (Assistant/Deputy Commissioner) to inspect business place within their jurisdiction and examine inventory, service, inputs and accounts

Changes in VAT StatutesSec. 86: Monetary limits of VAT officers in initiating a proceeding for adjudication• New sub-sec. (3): Introduction of brief adjudication• On application by a person for his failure or irregularity, the adjudicating authority may

conduct a brief adjudication without issuing a show-cause notice or arranging hearing

Various Chapters: CHANGES IN AUTHORITY

Sec. 95: Recovery of Arrear TaxRule 68: Standard Procedure to realize arrear tax• Recover officer was previously a VAT officer not below the rank of Deputy Commissioner,

now this is Assistant CommissionerRule 118B: Power to issue Order, Notice, Explanation, Circular, Clarification, etc. [NEW]• Board as a whole; Commissioner or DG of Directorate within their jurisdictionSec. 71: Refund of taxes paid by diplomatic and other international organizationsRule 55: Refund of taxes paid by diplomatic and other international organizations• Previously “Commissioner” was authorized for such refund, now “Commissioner or DG” is

authorized [actually DG, DEDO will do it]

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Thank you.

Q & AQ & A

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