ANNUAL REPORT 2012-2013 FOREIGN INVESTORS’ CHAMBER OF COMMERCE & INDUSTRY “Shama Homes”, Apt. # C-3, House # 59, Road # 01, Block # I, Banani, Dhaka-1213 E-mail: ficci@bdcom.net Website: www.ficci.org.bd Phone: 9893049, 9892913 Fax: 9893058 CONTENTS FICCI NOTICE OF 50TH ANNUAL GENERAL MEETING PRESIDENT’S REVIEW FICCI PRESIDENTS SINCE INCEPTION OF THE CHAMBER MINUTES OF THE 49TH ANNUAL GENERAL MEETING ANNUAL REPORT FOR THE YEAR ENDED 30TH JUNE 2012 ANNEXURES - A, B & C ANNUAL ACCOUNTS FOR THE YEAR ENDED 30TH JUNE 2013 2 FICCI The Foreign Investors’ Chamber of Commerce & Industry (FICCI) was established on the 1st of July 1963 in the port city of Chittagong under the name and style of the “Agrabad Chamber of Commerce & Industry” (‘Agrabad’ being the name of the commercial hub of the city) with the initiative of the foreign companies located in and around Chittagong. It may be mentioned here that, at that point of time, most of the foreign companies, mainly British, had their establishments located in that region of the country. Subsequently, after the emergence of Bangladesh as a sovereign and independent country in 1971, it was felt that the Chamber’s office should be shifted to Dhaka, the capital of Bangladesh for practical reasons and that the name of the Chamber should be suitably changed in order to include foreign companies located outside Chittagong region. Accordingly, in June 1987 the Chamber assumed its present name i.e. the Foreign Investors’ Chamber of Commerce & Industry and had its office shifted to Dhaka from Chittagong. FICCI is affiliated with the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) as an ‘A’ class Chamber and is a founder member of the Bangladesh chapter of the Paris based International Chamber of Commerce-Bangladesh (ICC-B). The Chamber maintains regular communications with the International Trade Centre (ITC), Geneva and the World Trade Organisation (WTO), Paris. The Chamber is represented in various Consultative and Advisory Committees of different government ministries and agencies and has been able to establish itself as an organisation to be reckoned with. Companies having a minimum of 50% foreign share holding in their equity and/or 100% management control in case the percentage of foreign share holding is less than 50 are eligible for ‘Ordinary’ membership of the Chamber and those having less than 50% foreign share holding in their equity are eligible for ‘Associate’ membership. The objectives of the Chamber are: to promote and protect the business interests of its members; to render such assistance and advice to the government of Bangladesh and its concerned agencies/authorities which may help promote growth of trade, commerce and industry of the country in general and foreign investors in particular keeping in mind the interests of FICCI members; to support or oppose, as the case may be, legislative or other measures of the government affecting trade, commerce and industry of the country in general and the FICCI members in particular; to help establish just and equitable principles in the domain of trade, commerce and industry of Bangladesh; to liase with other trade organizations home and abroad and with concerned government agencies/authorities for exchange of information, views etc. to serve the interest of FICCI members and to do such other things from time to time as the situation may demand for promotion and protection of the overall interests of the country’s trade, commerce and industry keeping in mind the interests of FICCI members. 3 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 50th Annual General Meeting of the Foreign Investors’ Chamber of Commerce & Industry will be held on 28th November 2013 at 7:30 pm. at The Westin Dhaka (Ball Room-3). AGENDA 1. To receive and consider the Annual Report of the FICCI Committee for the year ended 30th June 2013. 2. To receive and consider the Annual Accounts of the Chamber for the year ended 30th June 2013 and the report of the auditors’ thereof. 3. To appoint Chamber’s auditors for the financial year 2013-14 and to fix their remuneration. By order of the Committee M. A. MATIN Executive Director November 01, 2013 4 PRESIDENT’S REVIEW SPEECH BY SYED ERSHAD AHMED, PRESIDENT, FICCI, AT THE 50TH AGM ON 28th NOVEMBER, 2013 at 7:30 PM Distinguished Members, A warm welcome to all of you at this Annual General Meeting 2013. As President of Foreign Investors’ Chamber of Commerce of Industry I would like to share with you briefly some key events that took place during the period under report. The Committee as usual maintained the tradition of holding regular monthly luncheon meetings with the participation/presence of distinguished guests of honor from the Government as well as Heads of Diplomatic Missions and International Organizations in Bangladesh. In addition to the regular/routine activities a few special initiatives were undertaken during the tenure of the present Committee which was supported by the distinguished FICCI Members. I would like to take the privilege of sharing few of our achievements: FICCI turned 50 in June 30, 2013. To commemorate the occasion a press conference was arranged by the Chamber supported by SCB at the Pan Pacific Sonargaon on the day. Various events i.e. Newspaper Supplement, Cocktail Reception in Chittagong, Gala Dinner in Dhaka & a Seminar on FDI are planned, to celebrate the golden jubilee of the Chamber. This year membership growth was comparatively better than the previous years. A total of 16 new members were included during the period under report & thereby membership strength crossed 190. Intervened to obtain clarification from Bangladesh Bank resulting in lifting of embargo on renewal of license of existing companies such as foreign GSA, Freight Forwarders, Airlines, Shipping Lines & Tour Operators etc. FICCI joined hands with FinanceAsia as a supporting organization for the Inaugural Bangladesh Investment Summit in Singapore & London which took place in December 2012 & June 2013 respectively. Monthly bulletins of FICCI are coming out on a regular basis. Recently a magazine committee has been formed to improve the quality & content of monthly bulletin. I would like to thank FICCI member companies for their support. The Government has accepted a few of the recommendations made by FICCI along with other major chambers in 2013-14 National Budget. 5 I am pleased to inform you that our members are taking benefit of FICCI visa referral letter to various diplomatic missions in Dhaka & Bangladeshi missions overseas. The Chamber has been issuing certificates of origin & visa referral letters to FICCI member companies and during July 2012 to June 2013 period, the Chamber issued 133 certificates of origin & 63 visa referral letters. Two new officials have been appointed to strengthen the Chamber & the website of FICCI has got a new & improved look. These are highlights of some activities in addition to our usual work mentioned in the Annual Report. I would like to take this opportunity to thank my colleagues in the Executive Committee for their continuous support to the secretariat and me during the tenure of our committee. Further, I would also like to take this opportunity to express my sincere thanks to member companies for their support and cooperation during the tenure of my committee. In conclusion, I am sure that FICCI will play a more productive and proactive role in future with renewed strategy and direction. For & on behalf of the Executive Committee. Syed Ershad Ahmed President 6 FICCI PRESIDENTS SINCE INCEPTION 1963-64: Mr. H. P. Carse, CBE 1964-65: Mr. H. P. Carse, CBE 1965-66: Mr. A. P. Baldwin 1966-67: Mr. H. P. Carse, CBE 1967-68: Mr. F. Wicher 1968-69: Mr. C. W. Tassie 1969-70: Mr. G. W. Inglis 1970-71: Mr. N. L. Smith 1971-72: Mr. P. W. V. Rowe 1972-73: Mr. M. A. Anwar 1973-74: Mr. W. S. Sutherland 1974-75: Mr. W. S. Sutherland 1975-76: Mr. M. A. Anwar 1976-77: Mr. O. R. A. R. Nizam 1977-78: Mr. M. A. Anwar 1978-79: Mr. M. A. Anwar 1979-80: Mr. M. A. Anwar 1980-81: Mr. M. A. Anwar 1981-82: Mr. L. D. B. Bryceson 1982-83: Mr. L. D. B. Bryceson 1983-84: Mr. M. A. Anwar 1984-85: Mr. M. A. Anwar 1985-87: Mr. M. A. Anwar 1987-89: Mr. A. Hasanat Khan 1989-91: Mr. A. Hasanat Khan Dec. ’91-Nov. ’92: Mr. Syed Humayan Kabir Mar. ’93-Nov. ’93: Mr. Mahbub Jamil 1993-95: Mr. Mahbub Jamil 1995-97: Mr. Mahbub Jamil 1997-99: Mr. A. K. M. Shamsuddin 1999-01: Mr. Waliur Rahman Bhuiyan 2001-03: Mr. Waliur Rahman Bhuiyan 2003-05: Mr. Mahbub Jamil 2005-07: Mr. Masih Ul Karim 2007-09: Mr. Waliur Rahman Bhuiyan, OBE 2009-11: Mr. A. M. Hamim Rahmatullah 2011-13: Mr. Syed Ershad Ahmed 7 James Finlay & Co. Ltd. James Finlay & Co. Ltd. Duncan Brothers (Pak) Ltd. James Finlay & Co. Ltd. Volkart Brothers & Co. Ltd. James Finlay & Co. Ltd. Glaxo Laboratories (Pak) Ltd. James Finlay & Co. Ltd. Glaxo Laboratories (BD) Ltd. Robinson Foods (BD) Ltd. James Finlay & Co. Ltd. James Finlay & Co. Ltd. Robinson Foods (BD) Ltd. National Brokers Ltd. Robinson Foods (BD) Ltd. Robinson Foods (BD) Ltd. Robinson Foods (BD) Ltd. Robinson Foods (BD) Ltd. Glaxo Bangladesh Ltd. Glaxo Bangladesh Ltd. Robinson Foods (BD) Ltd. Robinson Foods (BD) Ltd. Robinson Foods (BD) Ltd. Bangladesh Oxygen Ltd. Bangladesh Oxygen Ltd. Pfizer Laboratories (BD) Ltd. Singer Bangladesh Ltd. Singer Bangladesh Ltd. Singer Bangladesh Ltd. Rhone-Poulenc Rorer (BD) Ltd. BOC Bangladesh Ltd. BOC Bangladesh Ltd. Singer Bangladesh Ltd. Berger Paints Bangladesh Ltd. BOC Bangladesh Ltd. Singer Bangladesh Ltd. Expeditors (Bangladesh) Ltd. FOREIGN INVESTORS’ CHAMBER OF COMMERCE & INDUSTRY “Shama Homes” Apt # C3, House # 59, Road # 01, Block – I, Banani, Dhaka-1213 Phone: 9892913, 9893049 Fax: 9893058 E-mail: ficci@bdcom.net Minutes of the 49th Annual General Meeting of the Chamber held on Wednesday, 28th November, 2012 at the Westin Hotel, Dhaka. Members present in the meeting were: SL. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. Member Asian Tyger Capital Partners (BD) Ltd. Augere Wireless Broadband Bangladesh Ltd. Bangladesh Edible Oil Ltd. Berger Becker Bangladesh Ltd. Berger Paints Bangladesh Ltd. Britannia Properties Ltd. Bureau Veritas (BIVAC) Bangladesh Ltd. Chittagong Warehouses Ltd. Citi Bank N. A. Dachser Logistics Bangladesh Ltd. Dachser Logistics Bangladesh Ltd. Expeditors (Bangladesh) Ltd. GE International Inc.-Bangladesh Glaxo SmithKline Bangladesh Ltd. GSP Finance Company (Bangladesh) Ltd. Habib Bank Ltd. Jenson & Nicholson Bangladesh Ltd. “K” Line Bangladesh Ltd. Linde Bangladesh Ltd. Novo Nordisk Pharma (Pvt.) Ltd. Pacific Bangladesh Telecom Ltd. Standard Chartered Bank Surmah Valley Tea Co. Ltd. The Lungla (Sylhet) Tea Co. Ltd. The UAE-Bangladesh Investment Co. Ltd. Unilever Bangladesh Ltd. Represented by Mr. Minhaz Zia Mr. Faisal Hyder Mr. Inam Ahmed Mrs. Rupali Chowdhury Mrs. Rupali Chowdhury Mr. Abdur Rouf Dr. A. Qayyum Khan Mr. Imran Ahmed Mr. Rashed Maqsood Mr. Syed Sadaquat Hossain Mr. Jahangir Alam Sarker Mr. Syed Ershad Ahmed Mr. Sartaj Bhuiyan Mr. M. Azizul Huq Mr. Feroz U. Haider Mr. Asaf Shaikh Mrs. Rupali Chowdhury Mr. Asif A. Chowdhury Mr. Erphan S. Matin Mr. A. Rajan Kumar Mr. Mehboob Chowdhury Mr. Chowdhury Maq Sarwar Mr. Imran Ahmed Mr. Imran Ahmed Dr. S. M. Akbar Mr. Kamran Bakr The President of the Chamber and Chairman of the meeting, Mr. Syed Ershad Ahmed took the chair at 7:45 p.m. and there being quorum, called the 49 th Annual General Meeting of the Chamber to order and read out the Notice thereof which was circulated among all the members earlier. President speech earlier circulated has been taken as read. 8 Thereafter, the Chairman of the meeting and the President of the Chamber, Mr. Syed Ershad Ahmed presented the Annual Report of the Chamber for the year ended 30 th June 2013 on behalf of the Chamber Committee and thereafter, following business were transacted as per set agenda: AGENDUM – 1 The Chairman of the meeting invited comments from the members present on the Annual Report of the Chamber for the year ended 30th June 2012 as presented by him earlier. There was no comment from any quarter. Thereafter, Mr. Asif A. Chowdhury proposed the following resolution for its adoption: “That the Annual Report of the Chamber for the year ended 30th June 2012 as presented by the President of the Chamber on behalf of the FICCI Executive Committee and as circulated among all the members of the Chamber earlier, be received and adopted.” Mr. Rashed Maqsood seconded the resolution. It was then put to vote by the Chairman of the meeting and there being no vote against, declared the same as passed nem con and the resolution was thus adopted. AGENDUM – 2 The Chairman of the meeting invited comments from the members present on the Annual Accounts of the Chamber for the year ended 30th June 2013 as audited and certified by the Chamber’s auditors, M/S. Hoda Vasi Chowdhury & Co. and as circulated among all the members earlier along with the Annual Report of the Chamber for the period. There was no comment from any one present in the meeting. Thereafter, Dr. S. M. Akbar proposed the following resolution for its adoption: “That the Annual Accounts of the Chamber for the year ended 30th June 2012 as audited and certified by the Chamber’s auditors, M/S. Hoda Vasi Chowdhury & Co. and as circulated among all the members of the Chamber earlier, be received and adopted.” Mr. Asaf Shaikh seconded the resolution. It was then put to vote by the Chairman of the meeting and there being no vote against, declared the same as passed nem con and the resolution was thus adopted. 9 AGENDUM – 3 The Chairman informed the meeting that till date the Chamber received only one application i.e. from M/S. Hoda Vasi Chowdhury & Co., Chartered Accountants for their appointment as the Chamber’s auditors for the 2012-13 fiscal year at an annual fee of Tk.30,000.00 (Taka thirty thousand only). He then invited comments from the members present. There was no comment from any quarter. Thereafter, Mr. Rashed Maqsood proposed the following resolution for its adoption: “That M/S. Hoda Vasi Chowdhury & Co., Chartered Accountants, be appointed as the Chamber’s auditors for the 2012-13 fiscal year at an annual fee of Tk. 30,000.00(Taka thirty thousand only).” Mrs. Rupali Chowdhury seconded the resolution. It was then put to vote by the Chairman of the meeting and there being no vote against, declared the same as passed nem con and the resolution was thus adopted. VOTE OF THANKS FICCI Executive Committee Member, Mr. M. Azizul Huq offered the vote of thanks to the President of the Chamber and the Chairman of the meeting for conducting the 49th Annual General Meeting in a smooth and befitting manner. He thanked the other Executive Committee Members for their co-operation in running the affairs of the Chamber during the period. He also thanked the FICCI Members present and the Executive Director for their co-operation and support. There being no other business to transact, the meeting was adjourned at 8:30 p.m. Executive Director Chairman of the meeting 10 ANNUAL REPORT 2012-13 The Committee is pleased to present the Annual Report of the Foreign Investors’ Chamber of Commerce & Industry for the year ended 30th June 2012 as under: MEMBERSHIP Ordinary Members Sl. Name of the Company 33 1 A & A Handbag Bangladesh Ltd. 34 2 ACS Textiles (Bangladesh) Ltd. 35 3 Acorn Infrastructre Services Ltd. 36 4 AEI-English Electric of Bangladesh Ltd. 37 5 Agility Limited 38 6 Airtel Bangladesh Ltd. 39 7 Amann BangladeshLtd 40 8 American Life Insurance Company 41 9 Asian Consumer Care Pvt. Ltd. 42 Asia Energy Corporation (Bangladesh) PTY 43 10 Ltd. 44 11 Asian Paints (Bangladesh) Ltd. 45 12 Asian Tiger Capital Partners (BD) Ltd. 46 13 Atlas Copco (Bangladesh) Ltd. 47 14 Augere Wireless Broadband Bangladesh Ltd. 48 15 Bank Alfalah Limited 49 16 Bangladesh Edible Oil Ltd. 17 BASF Bangladesh Limited 50 18 Bayer CropScience Ltd. 51 19 Bangladesh Edible Oil Ltd. 52 20 Bata Shoe Co. (Bangladesh) Ltd. 53 21 Bergen Engines Bangladesh Private Ltd. 54 22 Berger Becker Bangladesh Limited 55 23 Berger Paints Bangladesh Limited 56 24 Bitopi Advertising Ltd. 57 25 Blossom Textiles Ltd. 58 26 BMT International Ltd. 59 27 Braitrim Plastiform Bangladesh Ltd. 60 28 Britannia Properties Ltd. 61 29 BRAC EPL Stock Brokerage Ltd. 62 30 British American Tobacco Bangladesh Co. Ltd. 63 31 Britannia Properties Ltd. 64 32 BT Communications Bangladesh Ltd. 65 11 Bureau Veritas (Bivac) Bangladesh Ltd. Burroughs Wellcome & Co. (Bangladesh) Ltd. Cemex Cement Bangladesh Ltd. Checkpoint Systems Bangladesh Ltd. Chevron Bangladesh Chittagong Warehouses Limited Chang Jin (BD) Co. Ltd. Chung Hua Aluminium Industry Ltd. Citibank N.A. Clariant (Bangladesh) Limited CMA CGM Bangladesh Shipping Ltd. Coats Bangladesh Limited Coats Crafts Bangladesh Ltd. Coca-Cola Far East Ltd., Bangladesh Branch Commercial Bank of Ceylon Plc. Compustar Private Ltd. ConocoPhillips Bangladesh Exploration 10/11 Ltd. Cosmopolitan Industries (Pvt.) Ltd. Dachser (Bangladesh) Ltd. Daeyu Bangladesh Limited Dart Global Logistics (Pvt.) Ltd. Denim Expert Limited Deundi Tea Company Limited Dhakarea Ltd. DHL Global Forwarding (Bangladesh) Ltd. DHL Worldwide Express (BD) Pvt. Ltd. Dimensions Limited Donnet International (BD) Ltd. DSU Trading Limited ECTA Dhaka Ltd. DuPont Bangladesh Limited Emirates Airlines Emirates Cement Bangladesh Ltd. 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 Epic Garments Manufacturing Co. Ltd. Etihad Airways PJSC Everest Rug Production Ltd. Expeditors (Bangladesh) Limited Forever Living Products Bangladesh Ltd. Fun Factory Ltd. GE Healthcare Bangladesh Ltd. GE International Inc. Bangladesh GlaxoSmithKline Bangladesh Ltd. Global Attire Ltd. GrameenPhone Limited Graphic People Ltd. G4S Security Services Bangladesh (P) Ltd. GSP Finance Company (Bangladesh) Ltd. Habib Bank Ltd. Haripur Power Ltd. Heidelbergcement Bangladesh Ltd. Holcim (Bangladesh) Ltd. ICB Islamic Bank Limited ICICI Bank Ltd. IKEA Trading (Hong Kong) Ltd. 122 Perfect Beverage & Food Industries Ltd. 123 Perfetti Van Melle Bangladesh (Pvt.) Ltd. 124 Philip Morris Services India, SA 91 92 Industrial Promotion and Development Company (IPDC) of Bangladesh Ltd. Intertek Bangladesh Limited Intelligent Image Management Ltd. Jenson & Nicholson (Bangladesh) Ltd. Jin-Su Industries Ltd. Kadena Sportwear Ltd. 93 94 Karnaphuli Fertilizer Company Limited Kuehne + Nagel Limited 95 96 97 98 Lafarge Surma Cement Ltd. Lal Teer Seed Limited 99 LM Ericsson Bangladesh Ltd. 87 88 89 90 106 Mundipharma (Bangladesh) Pvt. Ltd. 107 Mustafa Mart Pvt. Ltd. 108 Nassa Taipei Textile Mills Ltd. 109 Nestle Bangladesh Limited. 110 Niko Resources Bangladesh Limited 111 Nilorn Bangladesh Ltd. 112 Nokia EA Limited 113 Nokia Siemens Networks Bangladesh Ltd. 114 Novartis (Bangladesh) Limited 115 Novo Nordisk Pharma (Pvt.) Ltd. 116 O & M Solutions Bangladesh Ltd. 117 Orascom Telecom Bangladesh Limited 118 Orient Energy Systems Ltd. 119 Pacific Bangladesh Telecom Ltd. 120 Pan Pacific Sonargaon Hotel 121 Paxar Bangladesh Ltd. 125 Pidilite Speciality Chemicals Bangladesh Pvt. Ltd. 126 Pies Caudrados Bangla Ltd. 127 Playdom Bangladesh Pvt. Ltd. 128 Premier LP Gas Ltd. 129 Procter & Gamble Bangladesh Limited 130 Qatar Airways 131 R-Pac (Bangladesh) Ltd. 132 Radisson Water Garden Hotel Dhaka 133 R.A.K Ceramics (Bangladesh) Ltd. 134 RAK Piling Bangladesh Pvt. Ltd. 135 136 137 138 Li & Fung (Bangladesh) Ltd. Linde Bangladesh Limited 100 LR Global Bangladesh Asset Management Company Ltd. 101 LSI Industries Ltd. 102 Maersk Bangladesh Limited 103 Marico Bangladesh Ltd. 104 Meghna Energy Limited. 105 Meghnaghat Power Co. Ltd. 12 R.A.K. Power Pvt. Ltd. Reckitt Benckiser (Bangladesh) Ltd. Reed Consulting Bangladesh Ltd. Revlon Trading Bangladesh Private Ltd. 139 Robi Axiata Ltd. 140 Roche Bangladesh Limited 141 Sanofi-Aventis Bangladesh Ltd. 142 Santos Sangu Field Ltd. 143 Satexco Limited. 144 Saudi-Bangladesh Industrial & Agricultural Investment Co. Ltd. (SABINCO) 145 Scanwell Logistics Bangladsh Pvt. Ltd. 146 Schlumberger SEACO Inc 147 Seven Circle (Bangladesh) Ltd. 148 SGS Bangladesh Limited 149 Siemens Bangladesh Limited 150 Singer Bangladesh Limited 151 S.P.M. Designs Limited 152 Standard Chartered Bank 153 State Bank of India 154 Su-Jin Industries Ltd. 155 Sun Pharmaceutical (Bangladesh) Ltd. 156 Sun Resources Bangladesh Ltd. 157 Supintex Bangladesh Ltd. 158 Surmah Valley Tea Company Limited 159 Synergies Sourcing Bangladesh Ltd. 160 Syngenta Bangladesh Ltd. 161 Thakral Information Systems Private Ltd. 163 The Hongkong & Shanghai Banking Corporation Ltd. (HSBC). 164 The Lungla (Sylhet) Tea Co. Ltd. 165 Trust Solutions Private Ltd. 166 Tullow Bangladesh Limited 167 Tyser Risk Management (Bangladesh) Ltd. 168 Unilever Bangladesh Ltd. 169 Unilliance Textiles Ltd. 170 United Surgical Ltd. 171 UTI Pership (Pvt.) Ltd. 172 Wartsila Bangladesh Ltd. 173 Whitex Garments (BD) Pvt. Ltd. 174 Woody Bangladesh Co. Ltd. 175 Woori Bank. 176 Youngone (CEPZ) Limited 177 Zuellig Pharma Bangladesh Ltd. 162 Thakral One Private Ltd. Associate Members 1. 2. 3. 4. 5. 6. 7. Apollo Hospitals Dhaka Acorn Infrastructure Services Ltd. Barakatullah Electro Dynamics Ltd. Bitopi Advertising Ltd. Dutch-Bangla Bank Limited DK Knitwear Limited Fibre Optic Network Solutions (BD) Ltd. 8. HTL Logistics (BD) Limited 9. Hellmann Worldwide Logistics Ltd. 10. “K” Line Bangladesh Limited 11. R.A.K Paints Pvt. Ltd. 12. R.A.K Pharmaceuticals Pvt. Ltd. 13. Star Ceramics Pvt. Ltd. 14. United Leasing Company Ltd. 15. RAK-MOSFLY (Bangladesh) Pvt. Ltd. MEMBERS WHO CHANGED NAMES DURING THE YEAR 1. Dupont Bangladesh Ltd. [Formerly: E. I. DuPont India Pvt. Ltd.] THOSE WHO LOST MEMBERSHIP DURING THE YEAR 1. 2. 3. 4. 5. 6. 7. APL (Bangladesh) Ltd. [For non-payment of annual dues ] Alcon Pharmaceuticals Ltd. [ Do ] Cosmopolitan Fashion Ind. Ltd. [ Do ] Pacific Zipper Bangladesh Ltd. [ Do ] Japan Garden City Ltd. [ Do ] KMH Junan International Ltd. [ Do ] The General Electric Company of Bangladesh Ltd. [ Do ] 13 NEW MEMBERS ADMITTED DURING THE YEAR 1. A & A Handbag Bangladesh Ltd. 2. Amann BangladeshLtd. 3. Barakatullah Electro Dynamics Ltd. 4. Bergen Engines Bangladesh Private Ltd. 5. Burroughs Wellcome & Co. (Bangladesh) Ltd. 6. Chang Jin (BD) Co. Ltd. 7. Dart Global Logistics (Pvt.) Ltd. 8. Denim Expert Ltd. 9. DHL Global Forwarding (Bangladesh) Ltd. 10. Hellmann Worldwide Logistics Ltd. 11. Nilorn Bangladesh Ltd. 12. Perfect Beverage & Food Industries Ltd. 13. R-Pac (Bangladesh) Ltd. 14. Scanwell Logistics Bangladesh Pvt. Ltd. 15. Sun Resources Bangladesh Ltd. 16. UTI Pership (Pvt.) Ltd. FICCI COMMITTEE President Mr. Syed Ershad Ahmed CM & Managing Director Expeditors (Bangladesh) Ltd. Vice-President Mr. Jim McCabe Chief Executive Officer Standard Chartered Bank Committee Members Mr. Ariel Miranda Managing Director SGS Bangladesh Ltd. Mr. A. Qayyum Khan Ph.D Managing Director Bureau Veritas (Bivac) Bangladesh Ltd. Mr. Arun Kaul Mr. Debasish Deb Managing Director Country Manager British American Tobacco Bangladesh Co. Ltd. Coca-Cola Far East Ltd., Bangladesh Branch Mr. Kamran Bakr Chairman & Managing Director Unilever Bangladesh Ltd. Mr. M Azizul Huq Managing Director GlaxoSmithKline Bangladesh Ltd. Mr. Mehboob Chowdhury Chief Executive Officer Pacific Bangladesh Telecom Limited Ms. Rachel Wu Executive Director LSI Industries Ltd. 14 Mr. Rashed Maqsood Managing Director & Citi Country Officer Citibank N.A. Mr. Rodney J. Reed Chairman & Managing Director Reed Consulting Bangladesh Ltd. Ms. Rupali Chowdhury Managing Director Berger Paints Bangladesh Ltd. Dr. S. M. Akbar Managing Director The UAE-Bangladesh Investment Company Ltd. Mr. Selim A. Chowdhury Managing Director G4S Security Services Bangladesh (P) Ltd. Mr. M. A. Matin Executive Director 15 FICCI Committee in Picture Mr. Syed Ershad Ahmed President Mr. Jim McCabe Vice – President Mr. Ariel Miranda Member Mr. A Qayyum Khan Ph.d Member Mr. Arun Kaul Member Mr. Debasish Deb Member Mr. Kamran Bakr Member Mr. Mehboob Chowdhury Member Mr. Azizul Huq Member Mr. Rashed Maqsood Member 16 Ms. Rachel Wu Member Ms. Rupali Chowdhury Member Mr. Rodney James Reed Member Dr. S. M. Akbar Member Mr. Selim A. Chowdhury Member Mr. M. A. Matin Executive Director 17 SUB-COMMITTEES Strategy & Planning Sub-Committee Mr. M. Azizul Huq, MD, GlaxoSmithKline Bangladesh Ltd. Dr. A. Qayyum Khan, MD, Bureau Veritas (Bivac) Bangladesh Ltd. Mr. Debasish Deb, CM, Coca-Cola Far East Ltd. Bangladesh Branch Mr. Kazi Samiur Rahman, MD & Country Representative, Premier LP Gas Ltd. Mr. Rodney J. Reed, Chairman& MD, Reed Consulting Bangladesh Ltd. Convener Member " " " Membership Sub-Committee Ms. Rachel Wu, Executive Director, LSI Industries Ltd Mr. Debasish Deb, CM, Coca-Cola Far East Ltd. Bangladesh Branch Ms. Rupali Chowdhury, MD, Berger Paints Bangladesh Ltd. Mr. Selim A. Chowdhury, MD, G4S Security Services Bangladesh (P) Ltd. Convener Member " " Power & Energy Sub-Committee Mr. Geoffrey Strong, President, Chevron Bangladesh Mr. Gary Lye, MD, Asia Energy Corp. (Bangladesh) PTY Ltd. Mr. Andrew De Garis, President, Santos Sangu Field Ltd. Mr. Alan Reid Marshall, Tullow Bangladesh Ltd. Mr. Kazi Samiur Rahman, MD & Country Representative, Premier LP Gas Ltd. Mr. Muhammad Reazuddin Chow, CM, Schlumberger SEACO Inc. Mr. Salahuddin Ahmad, CEO, Karnaphuli Fertilizer Co Ltd. Mr. Sartaj Bhuiyan, Director, GE International Inc.-Bangladesh Mr. Shouvik Bhattacharya, MD & CEO, Siemens Bangladesh Ltd. Mr. Tom Earley, MD, ConocoPhillips Bangladesh Exploration 10/11 Ltd. Convener Member " " " " " " " " Transportation & Logistics Sub-Committee Mr. Rafi Omar, MD, Kuehne + Nagel Ltd. Mr. Asif A. Chowdhury, MD, “K” Line Bangladesh Ltd. Mr. Sadaquat Hossain, MD, Dachser Bangladesh Ltd. Mr. K. Ashraful Kabir, CM, Etihad Airways Mr. Nelum Attanayake, MD, CMA CGM Bangladesh Shipping Ltd. Mr. Nooruddin Chowdhury, CM, DHL Global Forwarding (BD) Ltd. Mr. Kalim Iqbal, CM, HTL Logistics (BD) Ltd. Mr. Shamim Ul Huq, MD, Maersk Bangladesh Ltd. 18 Convener Member " " " " Telecom Sub-Committee Mr. Mehboob Chowdhury, CEO, Pacific Bangladesh Telecom Ltd. Mr. Chris Tobit, Managing Director & CEO, Airtel Bangladesh Ltd. Mr. D. S. Faisal Hyder, MD, Augere Wireless Broadband Bangladesh Ltd. Mr. Gary Dewing, MD, LM Ericsson Bangladesh Ltd. Mr. Michael Kuehner, MD & CEO, Robi Axiata Ltd. Mr. Radi Ahmed Chow., MD, Nokia EA Ltd. Mr. Tore Johnsen, CEO, GrameenPhone Ltd. Mr. Ziad Shatara, CEO, Orascom Telecom Bangladesh Ltd. Convener Member " " " " " " Trade, Tariff, Taxation & Company Affairs Sub-Committee Dr. A. Qayyum Khan, MD, Bureau Veritas (Bivac) Bangladesh Ltd. Mr. Abdul Khalek, Director Finance, Berger Paints Bangladesh Ltd Mr. Arun Kaul, MD, British American Tobacco Bangladesh Co. Ltd. Mr. Mohammad Sanaullah, Director, Corporate Affairs & Company Secretary, Singer Bangladesh Ltd. Mr. M Nurul Alam, IA Sr. GM & Company Secretary, Orascom Telecom Bangladesh Ltd. Mr. Nazmul Hossain, Finance Director, Linde Bangladesh Ltd. Mr. Sarwar Azam Khan, Finance Director & Company Secretary, GlaxoSmithKline Bangladesh Ltd. Mr. Sudipta Dey, Finance & Control Director, Nestle Bangladesh Ltd. Mr. Tusher Bhowmik, CFO, Zuellig Pharma Bangladesh Ltd. Convener Member " " " " " " " Pharmaceutical Sub-Committee Mr. M. Azizul Huq, MD, GlaxoSmithKline Bangladesh Ltd. Dr. Asim Jamal, MD, Sanofi-Aventis Bangladesh Ltd. Mr. Mohammad Afroz Jalil, Country Manager, Roche Bangladesh Ltd. Mr. Philip Kahn, MD, Zuellig Pharma Bangladesh Ltd. Mr. Prasanta Das, RSM, Sun Pharmaceutical (BD) Ltd. Convener Member " " Banking & Financial Services Sub-Committee Mr. Jim McCabe, CEO Bangladesh, Standard Chartered Bank Mr. Asaf Shaikh, GM, Habib Bank Ltd. Mr. Andrew Tilke, CEO, The Hongkong & Shanghai Banking Corporation Mr. K M Zakaria, Treasury Sr. GM, Orascom Telecom Bangladesh Ltd. Mr. Rashed Maqsood, MD & Citi Country Officer, Citibank N.A. Mr. Reaz Islam, CEO & Director, LR Global Bangladesh Asset Management Company Ltd. Mr. M. Ala Uddin Ahmad, FCA, Sub-Regional CFO, ALICO Dr. S. M. Akbar, MD, The UAE-Bangladesh Investment Co. Ltd. Mr. S. Prabagar, Country Manager, Commercial Bank of Ceylon Ltd. 19 Convener Member " " " " " " HR & Employees Welfare Sub-Committee Mr. AKM Firoz Alam, Director, HR, GlaxoSmithKline Bangladesh Ltd. Mr. Akhteruddin Mahmood, Director, HR, Nestle Bangladesh Ltd. Mr. Faija Sajia Ansari, Head of HR, Reckitt Benckiser Bangladesh Ltd Mr. Habibur Rahman, Head of HR, Bata Shoe Co. BD. Ltd. Mr. M. M. Ferdous, Head of HR, Singer Bangladesh Ltd. Ms. Saiqa Mazed, Head of HR, Linde Bangladesh Ltd Convener Member " " " Social Responsibilities Sub-Committee Mr. Rodney Reed, Chairman& MD, Reed Consulting Bangladesh Ltd. Convener Mr. Anowarul Amin, External Communication & CSR Manager, British Member American Tobacco Banglades Mr. Ariel Miranda, MD, SGS Bangladesh Ltd. Mr. Ashiqur Rahman, Head of Marketing, Bayer Cropscience Ltd. " Mr. Ataul Hoque, External Affairs & CSR Manager, Tullow Bangladesh Ltd. " Ms. Farhana Tofail, Communication Manager, Sanofi Aventis Ms. Lina Ferdows, Manager, PR & CSR NEPC, Meghnaghat Power Co. Ltd. Mr. Lutful Quddus Mamun, ICB Islamic Bank Ltd. Mr. Mohiuddin Babar, Vice President, Corporate Affairs, Regulatory Affairs & Legal, Robi Axiata Ltd. Mr. Mohammad Sanaullah, Company Secretary, Singer BD Ms. Shamima Akhtar, Manager PR, CSR and Marketing Projects, Augere Wireless Broadband Bangladesh Ltd. Mr. Md. Mizanur Rahman, Talent Management Manager, Linde Bangladesh Ltd. Mr. Jerry Jose, Director, HR, Unilever Bangladesh Ltd. Mr. O. Ejaz, EAD, Chevron Bangladeh Ms. Rachel Wu, Executive Director, LSI Industries Ltd " ** The President of the Chamber is ex-officio member of every Sub-Committee as per Article-41 of the Chamber's Articles of Association. ADMINISTRATION The Chamber is located at “Shama Homes” Apt # C3, House # 59, Road # 01, Block – I, Banani, Dhaka-1213 and the mailing address continued to remain same. The contact phone and fax numbers are being - Phone: 9892913, 9893049 Fax: 9893058. E-mail: ficci@bdcom.net and website remained unchanged. Mr. M. A. Matin continued his services with the Chamber as its Executive Director. 20 MONTHLY BULLETIN The Chamber continued publication of Monthly Bulletins regularly highlighting its activities during the month and containing information on important happenings in member companies, information relating to prevailing economic and investment scenario in the country and trade information received by the Chamber from abroad. These bulletins were circulated among all the members of the Chamber regularly. Ministers, top officials of various ministries and government authorities concerned with trade and investment, heads of important foreign diplomatic missions and international agencies based in the country are generally invited in such meetings as guest speakers. CHAMBER LIBRARY The Chamber has a small but rich library and efforts are on towards its further enrichment. Following luncheon meetings were held during the year: In addition to some valuable books on Trade, Industry, Management and Information Technology received by the chamber few years back as donations from GATT (New WTO), International Trade Centre (ITC), Overseas Economic Co-operation and Development (OECD), Paris and the Asia Foundation, the Chamber continued to receive complementary copies of publications on a regular basis from various national and foreign sources. September 27, 2012: The regular monthly luncheon meeting of the chamber was held on the day at the Westin Hotel, Dhaka. H. E. Heather Cruden, High Commissioner of Canada in Bangladesh was the Guest of Honor on the occasion. ACTIVITIES OF THE CHAMBER DURING THE YEAR Monthly Luncheon Meetings Organizing luncheon meetings every month is a redeeming feature of the Chamber. Such meetings are generally held on the last Sunday of each month with a view to providing the CEOs and top executives of member companies with a forum for exchange of views among themselves and invited guests on issues affecting trade, industry and businesses of the country in general and FICCI members in particular. Canadian High Commissioner in Dhaka Heather Cruden seen at the monthly luncheon meeting of the Foreign Investors’ Chamber of Commerce & Industry (FICCI). FICCI President Syed Ershad Ahmed (second from right), Executive Director, M.A. Matin (extreme right) and FICCI Committee Member M Azizul Haque (extreme left) also seen in the picture. October 21, 2012: The regular monthly luncheon meeting of the chamber was held on the day at the Westin Dhaka. Professor Ainun Nishat, Vice Chancellor, BRAC University was the Guest of Honor on the occasion. 21 BRAC University Vice Chancellor Prof. Ainun Nishat speaking at the monthly luncheon meeting of the Foreign Investors’ Chamber of Commerce & Industry at Westin Dhaka on October 21, 2012. FICCI President Syed Ershad Ahmed (second from right), Executive Director,M A Matin (extreme right), Vice President Jim McCabe (extreme left) also seen in the picture. Ms. Ellen Goldstein of World Bank seen in Monthly Luncheon Meeting of the Chamber on January13, 2013. Seen on her left President of the Chamber, Mr. Syed Ershad Ahmed, on here extreme left Executive Director of FICCI, Mr. M. A. Matin, on her right Vice President of the Chamber Mr. Jim McCabe. November 19, 2012: The regular Monthly Luncheon Meeting of the Chamber was held on the day at the Westin Dhaka. US Ambassador, H.E. Dan W Mozena was the Chief Guest on the occasion. March 31, 2013: The regular Monthly Luncheon meeting of the Chamber held on the day. Chairman of the National Board of Revenue Mr. Md. Ghulam Hossain was the Chief Guest on the occasion. US Ambassador, H. E. Dan W. Mozena speaking at the Monthly Luncheon Meeting of the Chamber at Westin Dhaka on November 19, 2012. FICCI President Syed Ershad Ahmed (second from right), Executive Director, M A Matin (extreme right), Vice President Jim McCabe (extreme left) also seen in the picture. Mr. Md. Ghulam Hussain, Chairman, NBR, at the Monthly Luncheon meeting of the Chamber, on his left President of the Chamber Mr. Syed Ershad Ahmed, Executive Director Mr. M. A. Matin on his far left & Mr. Arun Kaul on his right in the picture. January 13, 2013: The regular Monthly Luncheon Meeting of the Chamber held on the day at the Westin Dhaka. Country Director of World Bank, Ms. Ellen Goldstein was the Guest of Honor on the occasion. May 15, 2013: The regular Monthly Luncheon meeting of the Chamber held on the day. Country Director of Asian Development Bank Ms. Teresa Kho was the Guest of Honor on the occasion. 22 December 02, 2012: A meeting of the Chamber Committee was held on the day at FICCI Conference Room with President Mr. Syed Ershad Ahmed in the chair. January 13, 2013: A meeting of the chamber committee was held on the day at the Ballroom – 3 of Westin Dhaka with Mr. Syed Ershad Ahmed in the chair. Country Director of ADB Ms. Teresa Kho speaking at FICCI’s Monthly Luncheon Meeting. Also seen in the picture, sitting from left, Vice President of the Chamber Mr. Jim McCabe, President Mr. Syed Ershad Ahmed & Executive Director Mr. M. A. Matin. February 03, 2013: A meeting of the chamber committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed in the chair. April 07, 2013: A meeting of the chamber committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed in the chair. Committee Meetings Following meetings of the Chamber Committee were held during the year: July 01, 2012: A meeting of the Chamber Committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed President of the Chamber was in the chair. May 12, 2013: A meeting of the Chamber Committee was held on the day at the FICCI Conference Room with Mr. Jim McCabe in the chair. June 05, 2013: A meeting of the chamber committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed in the chair. September 16, 2012: A meeting of the chamber committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed, President presiding among others. Sub-Committee Meetings October 04, 2012: A meeting of the chamber committee was held on the day at the Westin Hotel (Silver Room) with Mr. Syed Ershad Ahmed in the chair. July 17, 2012: A meeting of the Power & Energy Sub-Committee was held on the day at the Conference Room of Chevron Bangladesh with Mr. Geoffrey Strong, Convenor in the chair. The meeting reviewed the sector activities of the Companies participated in the meeting. November 04, 2012: A meeting of the chamber committee was held on the day at the FICCI Conference Room with Mr. Syed Ershad Ahmed in the chair. August 27, 2012: A meeting of the CSR Sub-Committee was held on the day at the Conference Room of Linde 23 Bangladesh Ltd. with Mr. Rodney James Reed in the Chair. Sub-Committee was held on the day. Mr. Rafi Omar of Kuehne + Nagel Ltd. was in the chair. October 08, 2012: A Financial SubCommittee meeting was held at the FICCI conference room, with Mr. Jim McCabe, Convener in the Chair. April 15, 2013: The 6th meeting of the Power & Energy Sub-Committee held at the FICCI Conference Room hosted by Premier LP Gas Ltd. & Chaired by Mr. Geoffrey Strong, President, Chevron Bangladesh. October 09, 2012: A CSR Sub-Committee meeting was held at the FICCI conference room with Mr. Rodney J. Reed in the chair. June 18, 2013: HR & Employees Welfare Sub-Committee meeting held at the FICCI conference room on the day. Mr. A. K. M. Firoz Alam, Convener of the Sub-Committee presided the meeting. October 15, 2012: A special meeting of the Energy Sub-Committee was held at the Westin Dhaka with the presence of US Deputy Assistant Secretary of State Mr. Robert Ichord, Mr. Robert M Hollister, Mr. Denise M Marsh and Mr. Christopher D Spitzer followed by dinner hosted by Chevron. June 23, 2013: A meeting of the Steering Committee on Celebrating 50th Anniversary of FICCI was held at the Standard Chartered Head Office, chaired by Mr. Jim McCabe, Convener of the Sub-Committee presided the meeting. Other Meetings/Events July 05, 2012: Mr. Syed Ershad Ahmed, President & M. A. Matin, Executive Director of FICCI respectively participated in the launching of World Investment Report 2012 at the BOI Conference Room on the day. January 27, 2013: The 5th meeting of the Power & Energy Sub-Committee held at the FICCI Conference Room hosted by the Asia Energy Corporation Bangladesh Ltd. & Chaired by Mr. Geoffrey Strong, President, Chevron Bangladesh. August 02, 2012: FICCI President attended a Development Dialogue of Centre for Policy Dialogue at the BRAC Centre on the day. August 29, 2012: Mr. Syed Ershad Ahmed, President, FICCI attended a seminar organized by CanCham at the Ruposhi Bangla Hotel on the day. February 13, 2013: Meeting of the Trade, Tariff, Taxation & Company Affairs Sub-Committee was held on the day. Mr. A. Qayyum Khan, PhD was in the Chair. September 13, 2012: Mr. Syed Ershad Ahmed, President, FICCI attended a farewell luncheon of ICC arranged in honor of H. E. Zet Minzal Zainuddin, Ambassador of the Indonesia to February 26, 2013: Meeting of the Chambers Transportation & Logistics 24 Bangladesh & Nepal on the day at Ruposhi Bangla Hotel. Executive Director, FICCI Mr. M. A. Matin was present among others. September 17, 2012: FICCI President, Syed Ershad Ahmed attended a dialogue on State of the Bangladesh Economy, IMF supported program & future outlook held on the day at the BRAC Centre Inn auditorium organized by Centre for Policy Dialogue (CPD). November 05, 2012: President of the Chamber, Mr. Syed Ershad Ahmed attended an interview session on the current Economic Situation of Bangladseh at Ekushey TV. November 07, 2012: FICCI President Mr. Syed Ershad Ahmed attended an Expert Group Meeting arranged by CPD at the CPD dialogue room. October 03, 2012: President of FICCI Mr. Syed Ershad Ahmed & Executive Director Mr. M. A. Matin attended a ceremony of GE at the Westin Dhaka in honor of the visiting Chairman & CEO of General Electric Mr. Jeffrey Immelt. November 08, 2012: Chamber President, Mr. Syed Ershad Ahmed attended the CEO’s Night, jointly arranged by the Independent & Bangladesh Society for Human Resources Management (BSHRM) at the conference room of the Independent. October 04, 2012: FICCI bid farewell to its leaving Vice President Mr. Laurent Therond at the Westin Dhaka. October 17, 2012: FICCI Executive Director, Mr. M A Matin attended a workshop on Challenges for Effective & Transparent Business organized by Nordic Chamber. November 12, 2012: FICCI arranged a reception in honor of visiting Hong Kong AmCham delegation at the International Club Dhaka. President of the Chamber Mr. Syed Ershad Ahmed (middle), Vice President Mr. Jim McCabe (extreme right), Executive Director Mr. M A Matin (extreme left) are seen in the picture (below) with visiting guests. October 18, 2012: FICCI arranged an Open House for its respected donors at the chamber office. October 30, 2012: FICCI Executive Director, Mr. M A Matin attended a meeting on Company Law Amendment at the Ministry of Commerce. November 01, 2012: Chilean National Days was observed on the day at the Utshab Hall of Radisson Blu. Event was attended by the Executive Director of the Chamber Mr. M A Matin. November 04, 2012: Mr. John Chambers outgoing President of Santos Sangu Field Ltd. hosted a Farewell Reception at his residence wherein his replacement Mr. Andrew De Garis was present. November 13, 2012: FICCI President attended the launching ceremony on ‘Bangladesh towards Accelerated, Inclusive & Sustainable Growth, and 25 Opportunities & Challenges organized by World Bank at the Westin Hotel. December 11, 2012: President of the Chamber, Mr. Syed Ershad Ahmed attended the meeting of ICC Executive Committee. November 21, 2012: NORDIC club arranged a get together on this day. FICCI President & Executive Director attended the event. December 12, 2012: Mr. Ershad Ahmed, President, FICCI attended the 23rd BATEXPO at BICC. Prime Minister Sheikh Hasina was the Chief Guest. November 22, 2012: The Acting High Commissioner of BHC arranged a reception on this day at the residence of British High Commissioner. Executive Director, Mr. M A Matin attended the event. December 13, 2012: President Mr. Syed Ershad Ahmed attended the 50th Anniversary dinner of KPMG. December 20, 2012: FICCI President along with others got recognition as the CIP in a ceremony. The Honorable Minister of Industries Mr. Dilip Barua handed over the CIP Card. December 04, 2012: FICCI Executive Director, Mr. M A Matin attended the Inaugural Bangladesh Investment Summit, sponsored by Standard Charterd in Singapore. FICCI joined as a supporting organization. December 21, 2012: President of the Chamber Mr. Syed Ershad Ahmed attended the networking dinner honoring the Thai Prime Minister organized by FBCCI at Radisson Blu. December 05, 2012: FICCI Preseident, Mr. Syed Ershad Ahmed attended the event “Positioning Bangladesh” organized by DCCI in association with BUILD. December 26, 2012: The President of the Chamber attended the discussion on Trade Frauds in Bangladesh: Challenges and Remedies organized by ICC. December 07, 2012: FICCI President Mr. Syed Ershad Ahmed & Executive Director, Mr. M A Matin attended the PPP Global Investors’ Forum: Bangladesh 2012. January 05, 2013: President of the Chamber, Syed Ershad Ahmed attended the workshop arranged by Shippers Council of Bangladesh. Mr. Shahjahan Khan, Minister for Shipping was the chief guest at the event. December 08, 2012: President of the Chamber Mr. Syed Ershad Ahmed attended as a panel discussant at the International HR Conference organized by BSHRM. The president discussed on “Role of Chamber Leaders in Promoting Best HR Practices in Bangladesh”. January 11, 2013: FICCI President attended as the Chief Guest at the event, Supply Chain Management Trends in Bangladesh organized by Supply Chain Management Society. December 09, 2012: Executive Director, FICCI attended the BGMEA seminar on “Opportunities & Challenges in the Changed Global Sourcing Scenario”. Honorable Foreign Minister Dr. Dipu Moni was the Chief Guest. January 13, 2013: President Syed Ershad Ahmed attended the seminar on Arbitration for Business organized by Bangladesh International Arbitration Center (BIAC). 26 March 03, 2013: President of the Chamber attended the meeting arranged by Bangladesh Bank at Governor Bhaban. January 16, 2013: Executive Director of the Chamber, Mr. M. A. Matin attended the “Korea Classic Concert 2013”arranged by the Embassy of the Republic of Korea, Dhaka to commemorate 40 years of diplomatic relation between Bangladesh & Republic of Korea. H.E. Mr. Hasanul Huq Inu, Minister for Information was the chief guest. March 19, 2013: President Syed Ershad Ahmed attended a meeting arranged by ICC Bangladesh. March 20, 2013: President of the Chamber attended the Lunch Meeting arranged by Emirates. January 17, 2013: Mr. M. A. Matin, Executive Director of FICCI attended the CanCham 5th Networking Reception at Canadian Club Dhaka. The event was jointly organized by CanCham Bangladesh & Canadian High Commission in Dhaka. March 20, 2013: President of the Chamber Mr. Syed Ershad Ahmed attended the signing ceremony of syndicated term loan arranged for Barak Patenga Power Ltd. on the day. March 20, 2013: Mr. Abdul Khaleque, Member of the Trade, Tariff, Taxation & Company Affairs Sub-Committee attended the pre budget discussion at FBCCI. FBCCI President was in the Chair. January 19, 2013: FICCI Executive Director attended the farewell party for Ms. Ellen Goldstein & Yann Derriennic as they reach the end of their tenure in Bangladesh. January 24, 2013: The Chamber arranged an Annual Networking Dinner sponsored by Pacific Bangladesh Telecom Ltd. at the International Club Dhaka.FICCI President,EC Members & Executive Director of the Chamber attended the event along with Presidents of selected Chambers & other distinguished invited guests. March 24, 2013: FICCI official attended the National Workshop on Investment Policy Review of Bangladesh on the day. It arranged by UNCTAD & Ministry of Industries. Mr. Dilip Barua, Minister for Industries was the Chief Guest. March 26, 2013: Executive Director of the Chamber, Mr. M. A. Matin attended the inauguration ceremony of the new office of French Bangladesh Chamber of Commerce & Industry on the day. March 28, 2013: Executive Director, Mr. M. A. Matin attended the pre budget discussion on the day, arranged by BoI & Ministry of Finance. Finance Minister Mr. A M A Muhith was the Chief Guest at the event. March 31, 2013: FICCI official attended the pre budget discussion on the day, Annual Networking Dinner: In the Pictrue, FICCI Executive Director Mr. M A Matin in the middle, President Syed Ershad Ahmed on his right, on his far right Mr. Humayun Rashid, President of France-Bangla Chamber of Commerce & Industry. CEO of CityCell Mr. Mehbob Chowdhury on his left, on his far left Mr. Rashed Maqsood, Managind Director & Country Officer Citi Bank. 27 arranged by the Ministry of Industries. Mr. Dilip Barua was the Chief Guest at the event. April 09, 2013: President of the Chamber, Mr. Syed Ershad Ahmed attended the meeting of CHEMONICS on Infrastructure and Customs Procedures. April 15, 2013: The World Bank delegation met with the Chamber President to discuss on Investment Climate and Possibility of FICCI to Involve in Research. April 29, 2013: FICCI official attended a project inception workshop on “South Asia Energy Security through Regional Electricity Trade & Cooperation” organized by the World Bank at the Pan Pacific, Dhaka. April 15, 2013: Executive Director of the Chamber, Mr. M.A. Matin attended a bilateral discussion on “Way Forward from the Current Political Situation of the Country” organized by the Bangladesh – German Chamber of Commerce & Industry. May 05, 2013: A meeting with all bilateral chambers was held on the day at the FICCI Conference Room. President of the Chamber Mr. Syed Ershad Ahmed & Executive Director Mr. M. A. Matin were present from FICCI. April 17, 2013: FICCI official attended the Asian Development Bank’s 2013 Country Programming Mission for Bangladesh at the ADB’s Resident Mission, Dhaka. May 08, 2013: Executive Director of the Chamber Mr. M. A. Matin along with M/S. M. Azizul Huq & Kamran Bakr attended the meeting of the 50th Anniversary Celebration Steering Committee held on the day at the Standard Chartered Conference Room. Convener of the committee Mr. Jim McCabe chaired the meeting. April 22, 2013: FICCI official attended a bilateral discussion with Swiss Trade Delegation arranged by the Swiss Embassy Bangladesh at Hotel Purbani, Dhaka. April 24, 2013: FICCI official attended a meeting arranged by the Ministry of Industries on ‘Providing Special Package to Enhance Industrialization to Eminent Organizations.’ May 09, 2013: Executive Director of the Chamber Mr. M. A. Matin attended the reception “Celebration Europe Day” at the Westin on the day. Foreign Minister Dr. Dipu Moni was the Chief Guest at the event. April 27, 2013: A Delegation from FICCI led by the President, Syed Ershad Ahmed attended a pre-budget discussion with the NBR Chairman on the day at the NBR Conference Room. May 11, 2013: President of the Chamber Syed Ershad Ahmed attended the 18th Annual Council of International Chamber of Commerce (ICC). May 14, 2013: Mr. Syed Ershad Ahmed, President, FICCI attended an event 28 organized by the Australian High Commission, New Delhi on Trade & Investment in South Asia. development” held on the day at the Westin Dhaka. President & Executive Director of the Chamber attended the event. Minister for Ministry of Posts & Telecommunication, Advocate Sahara Khatun was the Chief Guest. May 26, 2013: President Syed Ershad Ahmed attended the US – Bangladesh partnership dialogue on the day, organized by AmCham. June 15, 2013: President of the Chamber Mr. Syed Ershad Ahmed & Executive Director Mr. M. A. Matin attended the CPD dialogue on Budget (2013-14) Analysis at the Lake Shore Hotel on the day. May 28, 2013: Executive Director of the Chamber attended the inaugural ceremony of Green Growth & Renewable Energy arranged by the Danish & Norwegian Embassy at the Westin. Dr. Tawfiq-e-Elahi Chowdhury, BB, Adviser to the Prime Minister, Ministry of Power, Energy & Mineral Resources was present as a Chief Guest on the occasion. June 17, 2013: President of the Chamber attended the discussion of Parliamentary Standing Committee of Ministry of Labor and Employment, on Amendment of Labor Law of Bangladesh. Chaired by Md. Israfil Alam M.P. Chairman Parliamentary Standing Committee on Ministry of Labor and Employment. June 02, 2013: Executive Director of the Chamber, Mr. M. A. Matin attended the program on celebrating Italian National Day at the residence of the Italian Ambassador. June 24, 2013: Meeting on 50th Anniversary newspaper supplement contents held at the meeting room of GlaxoSmithKline. Executive Director of the Chamber & officials from Citycell, GSK & Unilever were present. June 05, 2013: A meeting of the Chamber Election Board held on the day at the FICCI Conference Room. Chairman of the newly formed Election Board Mr. Syed Rezaul Karim, Mr. Syed Pervez Ahmed & Mr. M. Nurul Alam members of the Election Board & Executive Director of the Chamber Mr. M. A. Matin were present. June 27, 2013: An interactive session with Nepalese billionaire Mr. Binod K. Chaudhury held at the Nepal Embassy attended by the Executive Director, Mr. M. A. Matin. June 07, 2013: A post budget reaction meeting was held on the day at the Chambers Conference Room. June 30, 2013: A press conference on FICCI’s 50th Anniversary held at the Surma Hall of Pan Pacific Sonargaon. President Mr. Syed Ershad Ahmed, Vice President Mr. Jim McCabe, Executive Director Mr. M. A. Matin attended the conference & responded to the questions by journalists. The event was sponsored by Standard Chartered Bank. June 11, 2013: Executive Director of the Chamber Mr. M. A. Matin attended the Inaugural Bangladesh Investment Summit in London, sponsored by Standard Chartered. FICCI was the supporting organization of the event. June 15, 2013: A seminar of GSMA on “Telecom policy for national 29 30 FICCI'S REACTION TO 2013-14 NATIONAL BUDGET The Foreign Investors’ Chamber of Commerce & Industry (THE CHAMBER) reviewed the 2013-14 National Budget, as proposed by the Finance Minister on 6th June 2013 and assessed its implications on the country’s business, in general, and foreign investment in particular. Following are the Chamber’s assessments: The proposed budget of Taka 222,491 crore, which is 17.51% higher than that of last fiscal, is somewhat challenging at the backdrop of current economic situation. The Chamber appreciates the measures especially the budget allocation for Transport & Communication but expressed concern of relatively lower allocation for education, technology & health sector which is necessary for the development of human resource. The projected borrowing apparently from banking sector will impact private sector credit & may aggravate ongoing liquidity problem. However, the Chamber feels that it will require strong monitoring to achieve the goals set in the budget. The Chamber particularly appreciates the following proposals, which the Government has made in the proposed budget: Withdrawal of minimum tax from company which was irrational & detrimental to the investment. Withdrawal of tax on share premium, extension of tax exemption limit on the dividend income of individual & thereby a stimulation to capital market. The capital market will also be boosted up by the enhancement of investment allowances by individual assessee. Extension of exemption on tax from 2013-2015 for specific industry & physical infrastructure development. Reduction in the tax on registration of land and building & thereby a fiscal support to real estate sector. Reduction in customs duty leviable on intermediate & semi finished product from 12% to 10%. Extension of the minimum income threshold, house rent allowance & conveyance allowance of individual assessee. Simplification of the VAT laws pertaining to outsourcing of manufacturing services The Chamber expressed its concern about the following: Provision regarding the collection of 10% tax on the differential between MRP & manufacturer selling price, notable portion of which is surrendered by the distributor & dealer to the consumer at the face of severe competition. Provision for whitening of undisclosed money investing in building apartment & land in spite of the commitment of the government at the time of making such provision in previous fiscals. Imposition of 5% regulatory duty on 43 items which attracts 10% customs duty at import stage. Revised price declaration to VAT authority with an increase in product price in case of more than 5% increase in input cost. 31 Extension of the provision for the payment of VAT by the tenant being manufacturer on their rented corporate office. Besides, the proposed budget has not addressed the following recommendations made by the Chamber: Rationalisation of deduction of VAT at source and simplification of the procedure of price declaration. Withdrawal of supplementary duty on locally manufactured product. Withdrawal of the provision regarding inadmissibility of perquisites, royalty & technical knowhow fees. Withdrawal of surcharge on income tax of the assessee with a net worth of Tk. 2 crore Reduction of customs duty on raw materials from 5% to 2.5% & complete withdrawal of duty on machinery equipments. The Chamber feels that the proposed budget with necessary amendments will improve the socio-economic condition of the country. However, a detailed observation on proposed changes in law and regulation shall be given at a later date. 48th ANNUAL GENERAL MEETING November 28, 2012: The 49th Annual General Meeting (AGM) of the Chamber was held on the day at the Westin Dhaka. The FICCI President, Mr. Syed Ershad Ahmed was in the Chair. (See Minutes of the 49th AGM) Syed Ershad Ahmed President November 28, 2012 FICCI President, Mr. Syed Ershad Ahmed speaking at the 49th AGM at the Westin Dhaka. Seen on his right is Mr. Azizul Huq & on his left Executive Director of the Chamber, Mr. M A Matin 32 Annexure-A FICCI’s Proposals/Suggestions on Duties & Tariff for the 2012-13 National Budget MAJOR ISSUES Sl. No 1. 2. 3. Existing situation Proposal/Suggestion Reduction of duty rates basis three-tier structure For basic raw material For basic raw material 3%, semi5%, semi-processed processed 10%, and finished 12%, and finished goods goods 25%. For machinery 1.5%. 25%. For machinery 3%. Disregarding CRF value provided by the PSI agency Customs duty, CRF value provided by the PSI Supplementary duty (if agent must be the base value for any), VAT and other the imposition of tax. duties are payable on Customs authority must accept the Assessable Value the HS Code certified by supplier calculated basis the CRF and PSI. value provided by the PSI agent appointed by If the customs authority is of the the Government. opinion that the CRF value is not However, there are correct, then this can be referred many instances that the to the Review Committee for Customs authority examination and thereafter whimsically disregards appropriate action can be taken. the CRF value certified by the PSI agent and Specific rules for the items arbitrarily fix the attract 5% duty and have option assessable value. to import without CRF. Customs authority also Therefore, full implementation of rejects the HS Code PSI Rules (SRO 255) and certified by supplier and Valuation Rules (SRO 257) should PSI. Consequently the be ensured. importers are suffering penalty and demurrage. Detention charges during sampling period Minimum testing time a) The testing time should be by BSTI is 20-25 days. reduced to 7-10 days. Detention charges b) Provisionary clearance during sampling period certificate on submission of bank being charged from guarantee should be restored. 33 Justification For bringing down the costs of material and increasing competitiveness of locally manufactured products in the international markets. As the PSI agencies are appointed, controlled and supervised by the Government and they are working on behalf of the Government so the CRF value and relevant HS Code certified by them (PSI agencies) are to be deemed to have been declared by the Government itself. In most of the cases items imported without CRF are taken for testing. Such testing takes 2025 days and causes huge demurrage. Decrease in shelf life of product due to delay in clearance. Loss of sales & market share of the company. Trade and consumer importer. c) Demurrage during sampling dissatisfaction. Provisionary certificate time should not be charged on has been withdrawn. importer OTHER ISSUES Sl. No. 1. 2. Existing situation Proposal/Suggestion Supplementary Duty of Supplementary Duty on locally 15% is applicable on locally manufactured Shampoo under manufactured Shampoos. HS Code No. 3305.10.00 should be abolished. H.S. Code No. Items 3305.10.00 Shampoos Soap sector Custom Duty 12% on Crude Palm Kernel Oil (1513.21.00), 30% (25% + 5%) on Caustic Soda (2815.11.00 & 2815.12.00 for solid & liquid res.), Mixture of Odoriferous Substances (3302.90.00) This has encouraged tax evasion on a massive scale in addition to discouraging local manufacture and expansion of market for these products, which currently also face competition from imported & smuggled products. Custom Duty applicable on basic Custom Duty: Items mentioned bulk raw materials mentioned are basic bulk raw materials under soap sector used for required to manufacture soap manufacture of soap noodles noodles attract Duties ranging should be merged into one from 12% to 30% (25% + 5%). uniform & single rate of 5%. This is an anomaly in the tariff structure & therefore, Custom Duty on these items should be reduced to 5% to encourage local value addition. 3. Soap noodles Sodium Salt of Palmitic Acid (which is soap noodles) under HS Code Nos. 2915.70.31 and 2915.70.32 attract 25% Custom Duty. Custom Duty and Supplementary Duty on Sodium Salt of Palmitic Acid (Soap noodles) under HS Code Nos. 2915.70.31 & 2915.70.32 should be re-fixed at maximum rate of 25% Duty plus 20% as Supplementary Duty. 4. Synthetic Detergent Sector Custom Duty Customs Duties on all items mentioned below should be reduced to 5%. Powder Justification 12% on Sulphonic Acid (HS Code 3402.11.10) and Sod. Sulphonic Acid (HS Code Sulphate (HS Code 3402.11.10) and Sod. Sulphate 2833.11.00) (HS Code 2833.11.00) 34 Soap noodles as described in Explanatory Notes (Harmonized Commodity Description & Coding System of World Customs Organization) is Soap & hence, should be treated as finished product attracting maximum rate of Custom Duty and Supplementary Duty as applicable for Soap. This will encourage local manufacturers to make additional investment and thereby generate more employment. Items mentioned are basic bulk raw materials required to manufacture synthetic detergent powders, a mass-market product that is needed for health/hygiene & convenience of the people. Synthetic Detergent Powders substitute Ball Soaps and therefore, its growth will result in significant increase in revenue collection for the government. To enable the lowincome group to buy a better product at affordable price plus to help sustain price at current 5. Duty @ 30% (25% + 5%) on Germ Kill Kit (GKK), a spares under HS code 8421.21.99 for use in domestic type water purifier. Duty on Germ Kill Kit (GKK), a spares for domestic type water purifier should be reduced to 3%. 6. Dental products: Custom Duty Silicon dioxide (2811.22.00): 12% Sorbitol (3824.60.00) 12% SMFP (2826.19.00) 12% Organic Surface Active Agent (3402.11.00) 12% Presently the operators pay Tk. 12% as CD on import of each hand set under HS Code8517.12.10. Presently operators pay 78% duty under various heads on import of RUIM/SIM/Scratch cards under HS Code-8542.39.10 & H.S. Code-4911.99.10. Presently operators are paying higher rate of duty due to fixation of higher tariff on RUIM/SIM/Scratch cards at customs point avoiding Invoice price and CRF price duly certified by the PSI Co. Presently operators pay 5% duty on import of Telecom Equipment under H.S. Code-8517.61.00 Custom duties on following basic materials used for producing toothpaste and shampoo should be reduced to a single uniform rate of 5%. Silicon dioxide (2811.22.00) Sorbitol (3824.60.00) SMFP (2826.19.00) Organic Surface Active Agent (3402.12.00) Reduction of duty rate for H.S. Code-8517.69.00. We propose that the duty rate should be reduced to 5% from 7. 8. 9. 10. 11. levels, to facilitate market conversion from ball soaps, reduction in Custom Duty is required. Duty @ 3% is applicable on domestic type water purifier which is inclusive of a spare called Germ Kill Kit (GKK). Therefore, Duty on Germ Kill Kit (GKK), should be reduced to 3% otherwise domestic type water purifiers will not be commercially viable for sale in the market. Purified water per liter is much cheaper than bottled water or water in jerry can. Toothpaste and shampoos are essential for cleaning the teeth and hair by a majority of all income groups, i.e., related to health & hygiene. Hence, reduction in import duties will enable toothpaste and shampoos to be offered at more affordable prices. Eliminate duty on Hand Set import. The hand sets will be easily reachable to the subscribers and the mobile sector will be expanded. Eliminate duty on SIM/RUIM/Scratch card import. The cost of the connection will be reduced and easy reachable to the mass people. To accept Invoice Value/CRF value or introduce Tariff value. To avoid delay in customs clearance and ascertain duty amount. Reduce duty on import of Telecom Equipment from 5% to 0%. The cost of the network expansion and up gradation will be significantly reduced and subscribers will be ultimately benefited. This reduction will accelerate the expansion of Telecom Industry 35 25%. 12. 13. and economy of the country will be strengthen by means of increasing amount of VAT, Income Tax, Duties, FDI etc. Arbitrary Coding for import Unique Coding for Telecom This elimination will accelerate of Telecom equipments equipments and simplified the expansion of Telecom and complex Customs Customs Clearance procedure Industry and economy of the Clearance procedure. should be ensured. country will be strengthen by means of increasing amount of VAT, Income Tax, Duties, FDI etc. Exemption of Pre-Shipment Inspection (PSI) for Life-Saving Medical Equipment and Spare Parts, (Spare parts for MRI, ESWL Machine, Ultra sonogram /Color Doppler machine). H.S. Code : 9033.00.00 Pre shipment inspection (PSI) is mandatory for importing of spares for exclusively useable at only electro-medical equipment i.e. MRI (Magnetic Resonance Imaging) and ultrasound/Color Doppler Machine under H. S. Code 9033.00.00. The pre shipment inspection process is started by the local PSI company, which takes 2 (two) working days to issue the inspection reference number. After issuing the inspection reference number, the counter part of the PSI company starts the inspection process at the delivery point abroadwhich takes another 3 (three) working days. Then, our principal delivers the spare parts immediately. Again after shipment, our supplier submit all the related documents to PSI company abroad to issue the clean report findings (CRF) certificate and PSI company takes at least 3 (three) working days. After getting the CRF certificate from the PSI company, it again takes more then 3 (three) working days to clear the spare parts from the customers. Our proposal is to include spares of such electro-medical equipment i.e. MRI and Ultrasound/Color Doppler under H.S code 9018.19.00 described other including spare parts and accessories for all sub code of 90.18. We, Siemens Bangladesh Limited, deal with life saving medical equipments, which are used by Government, Semigovernment, Private Hospitals and Diagnostic Centres across the country. As these equipments are used to save lives, these should always be kept in working condition. We are committed to the customers to provide 24 hours uptime services. For this purposes, we have built our strong world-class local team and have streamlines processes with our overseas partners. However, all our efforts fall short when we get handicapped by the lengthy importation regulations. Consequently, a substantial number of patients suffer through painful ordeals because of this lengthy process. In short, we have to simply sit and wait for at least 12 (Twelve) working days to import any Spares as per 36 14. current process because of this PSI process. As a result, a substantial number of patients have to suffer due to this lengthy process of spares clearance with PSI. We would like to point out that our principal can deliver any spares within 12 hours of receiving the letter of credit if it without pre-shipment inspection. Modifying the HS Code to make it Thorough and Understandable. Spares of medical equipment - for X-ray , Gamma Camera. 15. 16. H.S. Code: 9022.90.00 (Others , Including Spare Part & Accessories) The spares parts of X-Ray. Currently HS Code 9022.90.00 As X-ray related machines are CT scan, Angiogram, C-Arm described other, including parts dealt under one customs and Lithotripsy machine and accessories which have to be structure, the related equipment under H.S code other including spare parts and should also be dealt with same 9022.90.00. But some accessories for all sub code of duty structure. times they allow only 90.22. 9022.90.00 for X-ray because the X-ray code is 90.22. The other item of Xray like CT Scan, ESWL which is also X-ray but under sub code of 90.22, so in those cases customs authority referred the code 9033.00.00 which results a longer clearance process due to PSI. Exemption of Pre-Shipment Inspection (PSI) of Industry Automation related Goods Currently in importing Our proposal is to exempt PLC All industry automation related industrial automation and related accessories from PSI. items are imported for related good we need to digitalizing the local industries in complete PSI which cause Bangladesh. If automation us to pass a long time in related products are exempted procuring the automation from PSI our full automated goods (Like PLC and industrialization of our country related accessories). will be accelerated greatly. Moreover, the whole machine or plant might be shut down and there would be huge production loss because of lingering procedure of clearing PLC and other automation related equipments due to PSI. Duty benefit on bulk import of “Preparation for Infant” compared to that of local manufacturing products (HS Code 1901.90.30) Vide SRO no. 334To promote local manufacture, The said exemption will Law/2010/2324/Shulko which is generating employment discourage the local industry dated 4th October 2010, and creating value locally, we manufacturing Infant Cereals as the import duty for import would humbly request for a result of competitive of infant cereals in bulk lowering of duty rates and disadvantage from duty point of covered under a newly withdrawal of supplementary view. If bulk packing industry is formed H.S. Code duty on key ingredients as patronized in this way, no 1901.90.30 described as mentioned in Annexure 1, entrepreneur will come up to “Preparation of Infant” aligned to the above mentioned further invest in the products has been reduced SRO. manufacturing field. to 5% (effective duty 37 6.11%), from 25% (effective duty 31.61%). 17. 18. 19. It should also be noted here that, manufacturing sector can contribute a lot by way of generating employment and increasing GDP which are very supportive parameters to enhance the country branding in the international community. Reduction of customs duty and withdrawal of supplementary duty & Regulatory duty on import of Infant Formula in finished form (H.S. Code 1901.10.00) Currently Customs Duty of We propose for reduction of the Duties and taxes on infant 25%, Regulatory Duty 5% basic duty (customs duty) and formula are very high in and Supplementary Duty withdrawal of supplementary Bangladesh compared to of 20% is levied on the duty and Regulatory Duty at the neighboring countries (Sri Lanka import of infant formula in import stage. 6%, Thailand 12%, and Pakistan finished form (effective 25%). The resultant high duty 58.14%). consumer price of infant formula makes it beyond reach for a large number of mothers unfot for breastfeeding their children. Local manufacturing of infant formula requires huge investment (BDT 500+ Crore) and also depends on the availability of high quality fresh milk. Withdrawal of supplementary duty and regulatory duty on import of Breakfast Cereals (H.S. Code 1904.10.00) Currently 25% basic duty, We would humbly propose for Breakfast cereals are considered 5% regulatory duty and full withdrawal of supplementary as nutritious and healthy for 60% supplementary duty is duty and regulatory duty to everyday diet especially for applicable on the import of make the product more children. Effective duties and Breakfast Cereals, affordable to Bangladeshi taxes of 111.18% make breakfast imported in finished form consumers. cereals extremely expensive and (effective duties and taxes beyond the reach of most approx. 112%). However consumers. the effective duty levied in some countries for the It is possible that the high duty same products are as structure is a stimulus for follows: unscrupulous operators to evade Pakistan – 51% tax, resulting in revenue loss for Malaysia – 5-10% the Government. Further, China – 5-25% lowering of duty has the Hong Kong – 20% potential to develop this healthy Singapore – nil food segment, with the Indonesia – nil possibility of increased revenue Thailand - nol generation for the State. A healthy breakfast will also address the growing health concerns of the average Bangladeshi. Tobacco Leaf Export Duty Bangladesh Government Removal of the existing 10% duty This has resulted in Bangladesh has imposed 10% export on export of tobacco leaf. tobacco leaf exporting industry duty on un-manufactured losing competitiveness in the tobacco (tobacco leaf) in world market. The export orders the budget for the FY have declined and impacted 2010-11 foreign currency earning potential as buyers are shifting to markets that offer competitive price, i.e. India, China, Malawi, etc. We are not aware of any other country in the world that has export duty imposed on tobacco leaf export. Currently, 38 Bangladeshi tobacco leaf is exported to more than 20 countries of the world including USA, EU, Australia and Singapore generating some US$ 70m (nearly TK.600 Crore). Large scale infrastructural investments have been made by operators to ensure the right quality of product. Livelihood of thousands of marginal farmers will be in jeopardy and export related investments by the companies will remain unutilized leading to cut in export related jobs. Restrictive policies like this will impact their crop and livelihood putting them back in a cycle of poverty. In Bangladesh, not even 1% (around 0.7%) of agricultural land is under tobacco cultivation. Due to export demand, the marginal farmers were earning consistent prices being paid by the tobacco companies under contracted growing system. Resultantly, it has Turned in to a prime cash crop in the greater Rangpur and other tobacco growing areas. Now, the farmers can use the earnings from tobacco behind other crops as well as in improvement of livelihood. Helped poverty alleviation-relieved people from the curse of Monga (seasonal famine) in northern tobacco growing districts. Generated employment for 90,000 farmers and agricultural labours in these areas due to the cultivation of export quality tobacco with attractive wages for agricultural labour forces. Created employment of over 100,000 people in tobacco export related jobs. Utilised fallow sandy river beds of Teesta, Dharola, in greater Rangpur, and Dhaleshwari in Manikganj for production of profitable tobacco crop. 39 These lands are generally not suitable for production of food grains such as paddy. Different countries in the world support export including tobacco leaf in different ways. For example, in neighbouring India, the Tobacco Board of India, under the Ministry of Commerce, provides various supports to tobacco leaf export in the form of regulatory support, price and market support, export promotion, research and development (R&D) and fertilizer supply on credit with subsidies. If this export duty is removed, Bangladesh tobacco leaf export can fetch around Taka 1,000 Crore in foreign currency in a year. 20. Supplementary Duty on all Hair Oils manufactured locally should be reduced to ‘Zero’. Brief Background of the Proposal: (a) Usage of Coconut Oil / other oils as a Hair Oil Packed branded Coconut Oils are basically used as Hair Oil, which does not attract 10% SD. Similarly, there are other Oils also which are solely used as Hair Oil, viz. Vatika Hair Oil and Amla Hair Oil. (b) Duty Structure on Coconut Oil, Coconut Oil Chemically / Herbally Modified, and Other Hair Oils on local production HS Code Product SD on Local Manufacturing 1513.11.00 Crude Coconut (Copra) Oil Nil 1513.19.90 Crude Coconut (Copra) Oil – Chemically 10% Modified 3305.90.00 Preparation for Use on the Hair 10% Rational Behind the Proposal: (a) As all the above mentioned HS Code items are used for the same purpose – as hair oils, the supplementary duty for HS Codes 1513.19.90 and 3305.90.00 too should be removed. (b) Main and Basic intent of the legislature to impose Supplementary Duty (as per Section 7 of Vat Act) was to bring the product category of such nature into its ambit, which are Luxury Goods, Non-essential and Socially undesirable Goods and the other Goods and Services. Basis this all Hair oils manufactured locally, even if containing negligible mix of fragrance/ additive for preservation purpose, should be excluded from imposition of Supplementary duty considering basic intent of imposition of Supplementary Duty. (c) Hair Oil is a Necessity Hair Oil is a necessity product which is used by all level of the society on a daily basis. People of the Country have a right to get quality products at the competitive price. (d) Development of New Products as Hair Oil It is a Corporate Social Responsibility for the Companies to provide quality products to the consumers at a competitive price. Accordingly, we have carried out extensive research and development activity, and made new formulations in the hair oil segment which provide several benefits to the consumers over old traditional formulation. 40 Dabur Vatika Hair Oil and Dabur Amla Hair Oil are the example of the new products developed for the benefit of consumers post advanced scientific research. (e) Level Playing Field: Levy the same Duty for products with same usage As shown in the above table, the supplementary duty @ 0% is levied on the Crude Coconut Oil which is basically used as Hair Oil. However, Supplementary Duty @ 10% is levied on Crude Coconut Oil Chemically / Herbally modified and other Oil Preparations used as Hair Oil. Burden of 10% Supplementary Duty is making the Advanced and Scientifically Superior Hair Oil costly to the consumers. Basis the above facts and data, we request your strong recommendation for withdrawal of the Supplementary Duty on Hair Oils. This will provide us level playing field with other products, and help us to provide quality products to the consumers at a competitive price. 21. The SD on imported Finished Goods of Shampoo and Hair oils The SD on imported Finished Goods of Shampoos and Hair oils has been increased to 60% from 20% last financial year. Due to this the overall duty impact has risen to 152% from 86.43%. This has a huge negative impact on the consumers and on us. 22. The import duty on Juices Our brand ‘Real’ is a leader in the segment of Fruit Juices / Nectars / Drinks in India and Nepal. However the high import duty on juices in Bangladesh - 91%, restricts us from importing our product in Bangladesh. M.A. Matin Executive Director Annexure-B FICCI’s Proposals/Suggestions on Income Tax for the 2012-13 National Budget MAJOR ISSUES Sl. No. 1. Existing situation Justification Proposal/Suggestion We recommend to eliminate this Every company shall, section. irrespective of its profits or loss in an assessment year for any reason whatsoever, including the sustaining of a loss, the setting off of a loss of earlier year or years or the claiming of allowances or deductions (including depreciation) allowed under this Ordinance, be liable to pay minimum tax at the 41 I. II. Income tax should be based on income, not on Revenue. Income is computed by deducting allowable expenses from Revenue. This basic postulate is ignored in formulating this section In order to remain unaffected by this section, corporate body must earn Net Profit @ 1.33% on Revenue while this is impossible particularly for a manufacturing company. Net profit earning rate varies rate of 0.50% of the amount representing such company’s gross receipts from all sources for that year. III. IV. 2. depending on the nature of industry, size of market, age of business house, macro economic factors etc. Both profit and loss are very common phenomenon for a commercial enterprise while business house not making profit is compelled to pay minimum tax. Generally, manufacturing companies cannot earn income during the initial years whereas such companies will be required to pay minimum tax from its equity. Company may incur loss and carry it forward. This loss can be set off against income of following 6 years u/s 37 of Income Tax Ordinance. The implication of this section will not be applicable unless the corporate house pays minimum tax u/s 16CCC. However, the business loss will be lapsed after 6 years of the year of origination Deduction not admissible for Royalty/technical know-how remittance (u/s 30(h) of ITO 1984) Section 30(h) of the Income Tax Ordinance 1984 stipulates following inadmissible expenses with regards to payment of royalty, technical service fee, technical know-how fee or technical assistance fee: We, therefore, strongly urge that the existing disallowance basis "8% of profits" be changed to at least "6% of sales” to align with the actual commercial situation as these expenses are based on Sales value. It is to be noted here that as per 30(h) any payment by existing Foreign Exchange way of royalty, (FOREX) regulations and technical service Board Of Investment (BOI) fee, technical know- guidelines, on account of how fee or technical royalty/technical assistance assistance fee fee up to a maximum 6% of exceeding eight per net Sales can be remitted cent of the profit; without any prior 42 As per this section 30(h) of the IT Ordinance 1984, any amount paid as royalty/technical fee exceeding 8% of profit is treated as an inadmissible expense. This disallowance increases the effective tax rate for a company and is a major deterrent for attracting FDI. Further, a company that cannot make profit because of long settlement period but needs to pay royalty to bring technology in Bangladesh will be penalized by this tax in spite of its good intentions of industrialization. permission. 3. 4. Deduction not admissible for excess perquisites (u/s 30(e) of ITO 1984) Section 30(e) of the We, therefore, recommend This clause needs to be reviewed, as Income Tax Ordinance that the existing employees’ compensation is adjusted 1984 stipulates following disallowance should be every year by the employer considering inadmissible expenses raised from Taka Two lakh market situation, inflation, revenue with regards to excess fifty thousand to Taka Five expenditure of the employee, etc. perquisites: lakh. Since employees are paying tax on this perquisite, the provision is in fact an (e) so much of the element of double taxation which was expenditure by an withdrawn by our neighboring country assessee on the long back. provision of perquisites, as defined in clause (45) of section 2, to any employee as exceeds taka (two lakh fifty thousand); Assessment on correct return (u/s 82 of ITO 1984) Basis Amendment made We, therefore, recommend This may cause unnecessary harassment in the Finance Ordinance that this particular provision for the assessee, as the tax authority will 2008 section 82 of the “where the Deputy have discretionary power to disregard ITO 1984, a return or a Commissioner of Taxes is any return or revised return to assess revised return will be satisfied” be withdrawn. the tax based on such return. correct and complete Consequently, the whole assessment without requiring the Since the assessee is to procedure will become very lengthy, presence of the assessee satisfy 3 conditions denoting complicated and discretionary. or the production of any compliance and growth in evidence where the DCT Tax, the provision for DCT is satisfied and he shall satisfaction would be assess the total income of withdrawn. the assessee and determine the tax payable by him on the basis of such return provided that: such return shall be filed on or before the date specified in clause (c) of subsection (2) of section 75; the amount of tax shall be paid on or before the date on which the return is 43 5. filed; and such return does not show any loss or lesser income than the last assessed income or assessment on the basis of such return does not result in refund. Universal Self Assessment (u/s 82BB of ITO 1984) Section 82BB of the ITO We, therefore, recommend 1984 stipulates that: that tax return submitted u/s 82BB should be accepted where an assessee as correct return and 10% of furnishes a correct all such returns can be and complete return selected on a random basis of income, the Deputy for the purpose of audit each Commissioner of year. Taxes shall receive such return himself or cause to be received by any other official authorised by him and issue a receipt of such return and the said receipt shall be deemed to be an order of assessment for the assessment year for which the return is filed; a return shall be taken to be complete, if it is filed in accordance with the provisions of sub-section (2) of section 75 and tax has been paid in accordance with section 74; notwithstanding anything contained in sub-section (1) and section 93, the Board or any authority 44 If the proposed amendment is considered, the difficulties/harassments faced by the assessees will be eliminated. Also as per sub-section (2) of section 82BB of the IT Ordinance 1984, a return shall be considered as completed return, if it is filed in accordance with the provisions of sub-section (2) of section 75 and tax has been paid in accordance with section 74. Where section 75(2)(d) stipulates that, in case of a company, the return shall be accompanied by a statement of accounts audited by a chartered accountant. Compliance of provisions of section 75 (2) and section 74 is well enough to treat as correct and complete return of income as the return is also accompanied by a statement of accounts audited by a chartered accountant. On the other hand, for any tax escaping, the Deputy Commissioner of Taxes can always re-open the file under section 93 without requirement of such audit. subordinate to the Board, if so authorised by the Board in this behalf, may select, in the manner to be determined by the Board, a number of these returns filed under sub-section (1) and refer the returns so selected to the Deputy Commissioner of Taxes for the purpose of audit and the Deputy Commissioner of Taxes shall thereupon proceed, if so required, to make the assessment under section 83 or section 84, as the case may be. After introduction of the above mentioned provision in 2007, all returns filed u/s 82BB are being selected for tax audit every year. 6. Consequently, to satisfy the requirements of tax audit every year, assessees are facing serious difficulties/harassments, which is against the spirit of section 82BB of the Income Tax Ordinance 1984. In the National Budget for Reinstatement of previous FY 2011-2012, Corporate Corporate Tax rate of 27.5% Tax rate for BATB as a from current 35% cigarette manufacturer listed in the Stock Exchange was increased from 27.5% to 35%. 45 This has impacted significantly the shareholders of British American Tobacco Company Limited (BAT Bangladesh) among whom Government of Bangladesh and its different investment arms are also significant shareholders. BAT Bangladesh (BATB) is listed in both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) from their inception. Currently, our market capitalisation is over Taka 3,500 Crore and this scrip is among the Top 10 shares in terms of Market Cap in DSE. BATB share is among the most stable and well performing shares in the market today enjoying highest level of investor confidence among institutional and retail investors. More than 34% shares of BATB are held by Government, its different investment arms and local shareholders. Within that, Government and its different arms own more than 22% shares of the Company. Notable shareholding is with Investment Corporation of Bangladesh (ICB): 17.9%, Sadharan Bima Corporation: 2.8%, Bangladesh Development Bank: 1% and President of the People’s Republic of Bangladesh: 0.6%. In the National Budget for FY 2011-12, Corporate Tax rate for Cigarette manufacturers has been increased from 27.5% to 35%. Due to this large additional tax burden, our earning per share have had a steep fall leading to a dramatic drop in shareholders’ return adversely impacting Government’s dividend revenue as well as share prices. This contradicts the Government’s efforts to promote a more vibrant capital market and acts as a disincentive to attract more companies to be listed in the Stock Exchange. Additionally, given the volatility of the capital markets currently, it is important to be able to attract more foreign institutional 46 investors in Bangladesh. However, we believe policy decision like the abovementioned one does not help the purpose and rather reduces the attractiveness of Bangladeshi companies to foreign investors. 7. 8. 9. Provision for extra Reinstate extra depreciation depreciation allowance allowance for double shift for double shift and triple and triple shift working. shift working has been omitted in the Finance Act 1998 (Third schedule paragraph 4) Tax at the rate of 10% to be deducted from commission or fees or allowances for the distribution or marketing of goods under section 53(E) of ITO 1984. Corporate Tax Existing Corporate Income tax rate for nonpublicly traded companies is 37.5%. Reduction of the rate from 10% 1. Non-publicly traded Companies should be treated at par with publicly traded companies for purposes of corporate taxation. 2. Restore requirements of establishing Tax Holiday Units whereby expansion of existing industrial units and newly established industrial units is allowed to encourage industrialization & FDI. Manufacturing industries that are operating on multiple shift basis should be allowed extra shift allowance for normal wear & tear of their manufacturing equipment. I. Distributor’s commission, discount rate payable by the Principal Company is not significant. This is the lone income for such business houses while expenses under various classes are met from this income. Hence, deduction of 10% is excessive. II. Advance tax exceeding tax payable is refundable according to tax law. However, in reality, advance tax in excess of tax liability is not being refunded to tax payer. Hence, this is creating serious problems for business houses in managing their cash flow. Corporate tax rate for non-publicly traded companies should be reduced in line with neighboring as well as other developing countries to attract more FDI and generate more employment in the country. In addition, the requirements for establishing tax Holiday Units should be restored failing which liberalization of trade post WTO agreement, investing countries would be encouraged to invest where tax is lowest by diverting their existing/proposed units. OTHER ISSUES Sl. No. 1. Existing situation Proposal/Suggestion Tax rebate for giving high dividend should be eligible for all 47 Justification 10% tax rebate is available for the publicly traded companies (other than Bank, Insurance, Financial Institutions and mobile phone operators) who are giving dividend more than 20%. 2. The above tax rebate benefit should be eligible for all the companies who are fulfilling the condition of paying dividend at more than 20%. Final settlement of Tax liability (u/s 82C of ITO 1984 As per amendment made in We, therefore, recommend that the Finance Act 2011 the following sub-section of stipulates the following in section 82C should be removed respect of Section 82C of the to be aligned with the spirit of ITO 1984 that: section 82C i.e. final settlement Subject to sub-sections (3), of income based on tax deducted (4), (5), (6), (7), (8) and (9) or collected at source: notwithstanding anything 82C(3) contained in any other 82C(5) provisions of this 82C(6) Ordinance, tax deducted or 82C(7) collected at source in accordance with the provisions mentioned in sub-section (2) shall be deemed to be the final discharge of tax liability form that source. Tax deducted or collected at source from the sources mentioned in sub-section (2) shall not be adjusted against refund due for earlier year or years or refund due for the assessment year from any source other than those mentioned in sub-section (2). Income from the sources mentioned in sub-section (2) shall be determined on the basis of the tax deducted or collected at source and the rate or rates of tax applicable for the assessment year. Income computed in accordance with subsection (4) shall not be set off with loss computed under any other source for the assessment year or with loss of earlier year or years. Any income shown or assessed in excess of the amount determined in sub- 48 This will encourage Bank, Insurance, Financial Institutions and specially the mobile phone operators to be converted into publicly traded company to a large extent and presently listed companies will be induced to distribute higher amount of dividend which in result will enrich the country’s capital market. This is another form of minimum tax charge, which will ultimately discriminate the imposition of tax amongst the assesses [82C(3), 82C(5)]; The existing provision may create serious ambiguity in terms of shown income and thereby charging additional tax by the authority, which is against the spirit of the entire section. In this regard amongst others, mainly the exporter will be affected seriously or harassed in settling their tax liability. This may ultimately impact in overall export business of the country [82C(6), 82C(7)]; 3. 4. a) section (4) shall be liable to tax at the rate or rates applicable for the assessment year. Any amount not admissible as allowances under section 30 shall be added to the income as referred to in sub-section (4). Income referred to in subsections (6) and (7) shall be taxable at the rate or rates applicable for the year after determining income under sub-section (4). In addition to the tax mentioned in this section, in accordance with the provisions of the Finance Act, if any, the assessee shall pay surcharge. Where the said income arises as a result of disposal by the assessee of his capital assets after not more than five years from the date of their acquisition by him, tax payable @ 25% on the total income including the said income PERSONAL INCOME TAX Conventional Exemption Limit The ceiling of income is subject to taxation started from Tk. 180,000 per annum. Tax payable on the said income should be @15% regardless of the tenure of holding. NBR should reduce the capital gain tax to encourage the individual assesses to invest in the market. There are some IPO shares in the pipeline. The reduction of capital gain tax and without the limitation of tenure will create a positive impact in the market. The ceiling of income not subject Considering the inflation and to taxation should be raised from cost of living this shall be Tk. 180,000 to Tk. 250,000 per enhanced. annum. b) c) d) Entertainment Allowances In the finance Act 1991, exemption of entertainment allowance of Tk. 4,200 per annum in the case of salaries assesses has been withdrawn. House Rent Allowance Currently the ceiling of house rent allowance which is exempted from taxation is 50% of the monthly basic salary or @ Tk. 15,000 per month. Our suggestion is to re-introduce This is not justified. It is entertainment exemption proposed to introduce in the Tk. 10,000 per annum light of match the cost of living. The ceiling of house rent It is proposed for increasing the allowance received in cash cost of hiring over the years. exemption from taxation should be raised from its present level (50% of the monthly basic salary) to 80% of basic monthly basic salary and @ Tk. 25,000 per 49 month. e) Investment Allowance: Section 44 Existing restrictions on tax credit of the investment allowances for individual is ten percent on allowable limit (20% of Total Income or Tk. 10,000,000 whichever is lower) We feel this investment allowance should be enhanced like this: Upto Tk. 1,000,000 tax credit 20% instead of 10% As Incentive to the lower income group towards investment. Upto Tk.10,000,000 tax credit 15% instead of 10%. Existing taxable perquisite is too high. f) Rent free Accommodation Rule 33 (B) Existing taxable perquisite for rent free accommodation is at 25% on the basic salary. Highest Rate of Tax for Individual At present the highest rate of income tax for individual is 25 %. 5. 6. 7. 8. 9. We suggest that the rate of taxable perquisites should be reduced from 25 % to 15% of the basic salary. We suggest reducing the rate at 20%. 25 % tax rate for individual is very high for which individual assessee may discourage to submit their return. Abuse the provisions as to Tax Deduction at Source and resultant disallowances of expenditure by the Tax Authority. [Chapter VII & Section 30 of ITO] There is an internal communication between NBR and LTU instructing to disallow subsidy against RUIM/SIM tax [Memo No. Jarabo/Kor7/A:A:B/04/2005/19(1) Dated 15/02/2006] Income Tax Rate for Mobile Phone Operator -45% if not listed on Stock Exchange and 35% if listed on Stock Exchange. [Section 70 of the Finance Act 2010] Insertion of provision specifying the requirement to deduct tax at source and ensuring the meticulous application of provisions regarding resultant disallowances. Insertion of provisions regarding allowance of expenditure on account of subsidy given against RUIM/SIM tax. Disappear the disputes and misinterpretation of provisions regarding tax deduction at source. Reduction of income tax rate for mobile phone operators from 45% to 40% Regarding Service of Notice, the wordings “with acknowledgement due” was omitted. [Section 178(1) of ITO] No investment allowance on investment for the purpose of Reinstate the wordings acknowledgement due” Mobile operators have been playing very vital role for fulfillment of Government mandate of Digital Bangladesh on time. For Implementation of mandate, mobile operators required to made extensive expansion with high quality mobile communication services. Therefore, government should facilitate mobile sectors by reducing corporate taxes for overall development of the country. This will ensure that the recipient has received the notice on time. “with Reinstate provision of investment allowance on investment for the purpose 50 Subsidy against RUIM/SIM tax is completely business expenditure. In case of any arbitrary disallowance of same expenditure, tax would be charged twice and cost of doing business impacted badly. This incentive will encourage investments and strengthen the cash 10. 11. 12. 13. 14. 15. 16. 17. BMRE of plant or machinery. [Section 29 (1) (xa) omitted by Finance Act 2004] No Tax Holiday incentive for expansion units of Mobile Phone Company. [Section 46A amended by Finance Act 2005] No Accelerated Depreciation for expansion unit of Mobile Phone company set-up after 30 June 2005 [Para 7A of 3rd Schedule of ITO amended by Finance Act 2005] Though SRO No 270-Law/ 2010 the Government has granted tax rebate at 10% on the money spent by corporate organizations in 22 selected areas of corporate social responsibilities. Unfortunately the areas selected are very confined and exclude some important areas which are practiced by the corporate organizations with great importance for social development As per para 11 (6) (a) of third schedule of ITO 1984, in the case of motor vehicles, being passenger vehicles or sedan cars, not plying for hire, the actual cost of the vehicle to the assessee shall be deemed not to exceed twenty lakh taka Employer’s contribution (6th Schedule, Part-A, Para-21) to the recognized provident fund when an employee leaves the company before being eligible to receive the contribution of his employer. Withdrawn the provisions of Investments regarding Tax Credit on Secondary shares, debentures etc. Appeal to the Appellate Tribunal u/s 158 (2)- No appeal under subsection (1) shall lie against an order of the Appellate Joint Commissioner or the Commissioner (Appeals), as the case may be, unless the assessee has paid [ten percent] of the amount representing the difference between the tax as determined on the basis of the order of the Appellate Joint Commissioner or the Commissioner (Appeals) as the case may be, and the tax payable under section 74 Reference to the High Court of BMRE of plant or machinery. flows in the year of investment reducing tax liability. Necessary provisions are to be inserted to avail Tax Holiday incentive by Mobile Phone This incentive will encourage investments and strengthen the cash flows in the years of investment. Reinstate the provision for 5 years to avail of Accelerated Depreciation Scheme by making necessary amendment. This incentive will encourage investments and strengthen the cash flows in the year of investment reducing tax liability. Below mentioned activities should be incorporated in the related SRO under the purview of CSR. Since some important areas of practicing CSR by corporate organizations which helps in social developments a lot has been overlooked, if included in the list of the SRO, will indeed inspire them to continue the activities and ensure the social developments through effective participation of corporate organizations ICT based social services in the areas of Health, Education and environment; Development of digitized educational material; Dissemination of information through information centers for rural & hard to reach areas; Climate change related projects or donation for such programs All payment to any Govt. Organizations. The allowable cost for the vehicle should be increased from Tk. 20 Lac to 30 Lac. The value of sedan car has been increased significantly in the recent years. The allowable cost for vehicle (sedan) should be reviewed year on year in line with cost of vehicle prevailing in the country. The contribution of employer which was suffered at tax while assessment and is not received in part or full by an employee because of leaving early without fulfilling required time, should be inadmissible expenses. Reinstate the provisions regarding Investment allowances for getting tax credit. This will enable the employee to receive the employer’s contribution even he/she leaves the company at any time. We propose to reinstate the previous provision i.e. five percent Sometimes assessing authority makes the assessment arbitrarily. In this case, if the Appellant deposits the amount @ 10% before filing an Appeal to the Taxes Appellate Tribunal, the said fund shall be blocked for the Appellant. As a result, cost of doing business shall be increased significantly for the Assessee. We propose to reinstate the previous Sometimes assessing authority makes 51 It will strengthen the capital market of Bangladesh and the assesse will get tax credit on the said investments. Division under proviso of sec provision i.e. ten percent 160 (1)- Provided that no reference under sub-section (1) shall lie against an order of the Taxes Appellate Tribunal, unless the assessee has paid the following tax at the rate of(a) twenty five per cent of the difference between the tax as determined on the basis of the order of the Taxes Appellate Tribunal and the tax payable under section 74 where tax demand does not exceed one million taka; (b) fifty per cent of the difference between the tax as determined on the basis of the order of the Taxes Appellate Tribunal and the tax payable under section 74 where tax demand exceeds one million taka:] the assessment arbitrarily. In this case, if the Appellant deposits the amount @ 25% or 50% for filling Reference Application to the High Court Division, the said fund shall be blocked for the Appellant. As a result, cost of doing business shall be increased significantly for the Assessee. We propose to reinstate the provisions. These will reduce the total income of an assessee. We propose that there should be no limit. Because this will be beneficial to get investment rebate. 20. Deletion of Paragraph 12, 13, 30 and 31B of SIXTH SCHEDULE- PART A As per SIXTH SCHEDULEPART B an amount not exceeding taka sixty thousand by an individual in any deposit pension scheme sponsored by a scheduled bank 5% tax on interest of saving bonds. No tax To supplement income. 21. Tax Holiday: Continuation of Tax Holiday facility incorporating Ceramics Industry in the Direct List. Ceramics Industry is highly capital intensive, without tax holiday pay back period become too longer to invest. 18. 19. Ceramics Industry Tax Holiday is Withdrawn from Direct List. Continuation of Reduced Rate Tax Withdraw from Tax Holiday would be discouraging for FDI and local investment. WE were encouraged to invest based on SRO 172 and presently invested large amount. Cancellation of the above facility before the expiry of the said time period would incur us huge loss. 22. Reduced Rate: 23. Deposit of tax before referring to the High Court Division under section 160 of Income Tax Ordinance, 1984. facility for Ceramics industry. As per SRO 172 along with other company ceramics company set up between 1st July 2009 to 30 June 2012 will enjoy reduced rated tax facility which is suddenly cancelled by SRO 225 dated 4th July 2011. 52 As per Finance Act, 2011, before appealing to High Court the appellant needs to deposit: a. 25% of the difference between the tax as determined on the basis of the order of the Taxes Appellate Tribunal and the tax payable under section 74 where tax demand does not exceed BDT 1 million OR 24. 25. This should be replaced by earlier requirement of 10% of the difference between the taxes as determined on the basis of the order of the Taxes Appellate Tribunal and the tax payable under section 74. This requirement hinders the right of appealing against any aggrieved order of tax authority. Moreover, existence of such requirement will encourage the assessing authority to make more hypothetical assessment because whatever assessment is made, the tax authority will get at least 50% of tax claim. This is nothing but hurdle to right of getting justice. b. 50% of the difference between the tax as determined on the basis of the order of the Taxes Appellate Tribunal and the tax payable under section 74 where tax demand exceeds BDT 1 million. Inclusion of mobile tower rental company in the definition of “physical infrastructure facility” Mobile tower company is a Infrastructure of Mobile tower Rental Formation of mobile tower rental prospective industry in the country Company should be included in the company will help to avoid repeated on which Government has due definition of “physical infrastructure towers in same place of deferent emphasis. Section 46A(1A)(ii) of facility” operators. This will bring savings by Income Tax Ordinance 1984 allows reducing investment and save tax holiday to physical electricity consumption. infrastructure facility. The definition of physical infrastructure facility does not include infrastructure of mobile tower rental company. Accelerated Amortization should be allowed license renewal As per section 7 of Third Schedule In section 11 of Third Schedule the (1) Accelerated depreciation is one kind of of Income Tax Ordinance 1984, definition of plant should include ‘fees fiscal incentive for investment in plant Accelerated Depreciation for mobile license renewal’ which and machinery in Bangladesh. Similar Allowance is applicable for involves huge investment for mobile type of fiscal incentive is not available machinery and plant. As per section telephone operating companies for investment in license and spectrum 11 of Third Schedule the definition though license and spectrum are of plant does not include any synonymous to ‘plant and machinery’ intangible asset as ‘license renewal’ for telecom sector. where heavy investment may have The definition of plant in Income Tax to make and investment incentive Ordinance 1984 is inclusive and does should be available. Mobile phone not include license and spectrum. In operating companies have to pay tax regime like that in the UK, there is significant amount for license no definition of plant. That tax regime renewal which deserves accelerated does not define what plant is, rather amortization incentive. lists down what plant is not. The UK tax regime seems to take an ‘exclusive approach’ quite opposite to the approach in Bangladesh. A particular asset needs to pass certain tests set out in Wimpy International Restaurants Ltd vs Warland. The tests are: (a) Is the item stock in trade? (b) Is the item the business premises or part of the business premises (the premises test)? (c’) Is the item used for carrying on the business (the business use test)? An item is plant if the answer is ‘No’ to the first two questions and ‘Yes’ to the last question. The above approach is very broad and 53 26. 27. a) scopes in even ‘spectrum cost’ as without that mobile operator will not be able to carry on its business. (2) Mobile phone operating companies are to pay a upfront significant amount of fees for license renewal to the Government in three years for a fifteen years tenure. It is a basic investment for this industry like machinery and plant. Hence ‘fees for license renewal’ paid by any Mobile phone operating company should be brought under the purview of incentive through inclusion of the same to the above definition of plant. Provision of merger or demerger should be included: (should be more specific for asking the change) There is no specific provision Above such provision of merger or Merger and demerger has become a available in current Income Tax demerger should be included in the common scenario in the country under Ordinance 1984 for tax implication Income Tax Ordinance 1984. the same group of companies to create in the case of transfer of assets on more business prospect. But there is no merger or demerger under the same specific provision available in the group of companies. current Income Tax ordinance to address the relevant tax implications. Fiscal year versus tax year difficulties Fiscal year starts from the 1st July and ends on 30th June after passing Finance Act in the Parliament and come into effect i.e. from 1st July. But tax returns need to submit by 15th of July of those assesses whose accounting year end on December. Changes in the Finance Act irrespective of Corporate/ Individual tax should be declared/ confirmed in the current fiscal year for the next year. Fiscal year starts from 1st July and ends on 30th June. Finance Bill passes in the Parliament on 29/30th June of every year and Finance Act become available in the 2nd week of July. Moreover, Circulars (Paripatra) publishes in the last week of July or in the August. But tax return needs to submit by 15th of July. Example: Fiscal Year 2012-2013 shall confirm the tax changes for the assessment year 2013-2014 not an assesses can not submit their tax for the assessment year 2012- returns by 15th July in absence of 2013. updated tax laws and their interpretations. if tax increases in the fiscal policy, there is possibility of giving less advance tax. if tax decreases in the fiscal policy and offers incentives/exemptions, assesses will not be able to get return of excess payment. b) Credit of Tax Deducted at Source U/S 62: The Tax authority avoid giving This practice to the assessee as 54 credit of Tax deducted at source at import level (AIT)with a remark in IT 30 to the effect that "Tax credit will be given on receipt of evidence to the effect that tax has been deposited under the proper head of account of the Government". c) Investment of Provident Fund, Gratuity and Pension Fund Money Due to investment restrictions imposed by the Government, these funds cannot be invested as per the provision of the Finance Act. d) We strongly suggest that the provisions of the law and rules should be made to the effect that in respect of Import Business, tax credit would be allowed based on proof of deposit of Tax with Custom House branch of Sonali Bank Limited and on production of certificate u/s-58 should be considered as a proof of deduction at source during the assessment. We suggest that investment of such funds in the fixed deposits in Banks or Non Banking Financial Institutes. 184D. Reward to officers and employees for collection and detection of evasion of taxes. Rewards for Tax Officials for their performance in collection of taxes and detection of tax evasion or furnishing information NBR may reward its officials but leading to detection of tax there should not be any evasion; provision of cash reward for tax officials at a certain Rewards to Tax officials for percentage against collection collecting of revenue in excess of the revenue target. of tax in access of returns. a means of harassment; therefore it will reduce the harassment of obtaining the tax credit. It is rational to invest the money of Provident Fund, Gratuity and Pension Fund in Banks and Financial Institutions and to get profit from there. It will increase the funds so that the employees will be more benefited. Any reward/incentive in certain percentage against collection of tax in access of returns may be a means of harassment. Therefore this provisions need to be changed for obvious reason. 28. Advance Income Tax Recovery: Presently we are forced to pay Advance Income tax at Customs point itself @ 5% of Assessed value of consignment (Earlier 3%). This 5% Advance Income tax is minimum tax in case of traded items which converts into more than 15% net taxable profit. This presumptive taxation system needs to be revisited and it needs to be brought at par with manufacturing activity where taxable loss is accepted. 55 29. Income tax for individuals: The value of standard deduction should be increased due to increase in prices of all essential commodities. M.A. Matin Executive Director Annexure-C FICCI’s Proposals/Suggestions on Value Added Tax for the 2012-13 National Budget MAJOR ISSUES Sl. No. 1. Existing situation Proposed VAT Act 2011 The government introduced VAT as a substitute of Excise and Sales Tax in 1991 at manufacturing and import stage and gradually in wholesale and retail stage. Over the period the net of VAT has been expanded up to retail level through SRO, GO and other special orders without necessary reconstruction of Act and Rules. Consequently the VAT laws have turned into bottleneck for taxpayers. Understanding the gravity of the situation, the government, in collaboration with taxing agencies, has redrafted the VAT laws both in Bangla and English through drafted VAT Act 2012. Proposal/Suggestion We recommend the implementation of proposed VAT Act in consultation with business community and professionals within the earliest possible time. 56 Justification The proposed Act has addressed lots of complicated aspect of the existing law and in our observation, is a milestone. Drafting the law in English alongside Bangla is an investor friendly step. 2. 3. VAT deducted at source In the existing law, VAT deduction at source is applicable for 35 services (General Order-9). Regardless of VAT 11 challan, VAT is to be deducted at source from 17 services at truncated rate. Price declaration In the existing law, manufacturers and traders are required to declare prices in form VAT-1, 1Kha, 1Ga. 4. Price declaration is not required if the product price is unchanged and the percentage of value addition change is less than 5%. But the VAT officials do not allow credit without price declaration even though the change in price is below 5%. The officials take long time to approve price declaration if value addition is low. The officials pressurize to disclose product formulation which is regarded as confidential business information. The officials do not allow price declaration accounting for actual wastage which may differ from product to product. The officials ask for all B/E, challan, statements etc. which may bulk up to hundreds of pages and in reality, are very difficult to provide. We propose that whether the VAT base is truncated or not, if VAT 11 challan is provided there should be no deduction at source or the service provider is to receive credit on the VAT deducted. The service providers of these 17 services have to pay VAT twice although they provide VAT 11 challan. They should be allowed to take credit of the VAT deducted from them. Both service provider and receiver should be liable for the authenticity of the VAT 11 challan. We recommend that The law stating that ‘price declaration is not required if the product price is unchanged and the percentage of value addition change is less than 5%’ be duly implemented. Irrespective of percentage, price declaration be approved at actual value addition. For necessary verification, price declaration be approved upon explanation of materials during the hearing. Price declaration be approved accounting for actual wastage. Instead of submitting all B/E, challan etc., price of all materials be listed in one sheet. Input tax credit (VAT rebate) As per section 9 read with We recommend that if the Rule 19 of the VAT law, VAT credit is genuine and there are numerous authentic, irrespective of the means and measures, nature of purchase, it should which empower the be allowed. authority to disallow VAT credits on input tax, Clarification or directives are 57 These will ensure compliance of law without unwanted hassle of taxpayers. As the VAT credit is not allowed, the same is transferred to the costs and therefore the price of the goods or services is higher and the ultimate consumer is the sufferer. It will strengthen the overall VAT related to the supply of any particular taxable goods and services. Examples of such disallowances are: -Repairing of furniture, air conditioner, fan, lighting equipment & generator etc.; -Travel, entertainment, staff welfare and developments activities; 5. 6. 7. required so that Input VAT of equipments, spares, services which is used/consumed for construction, renovation, repair and BMRE of BTSs are not construed as Structure or Establishment with reference to Section 9. operating structure and the tax payer will get relief from unjust tax hit. This type of clarification or directives will mitigate the misunderstanding between service renderer and VAT authority and ensure the establishment of true sense of VAT management. There is ambiguity as to worthiness of claiming Input VAT rebate for payment of VAT on purchase of equipments, spares, services which are used/ consumed for construction, renovation, repair and BMRE of Structure or Establishment. Rate of VAT VAT payable rate is 15% We propose the rate should VAT by nature is regressive, poor pay be within 10%. VAT more than the rich as a percentage of their income. Therefore, a reduction in rate will be helpful for the elimination of poverty. Withdrawal of supplementary duty on locally manufactured paint: Supplementary Duty is a We suggest that Due to the imposition of supplementary Supplementary Duty on tax which is levied on duty the local paint manufacturing paints at the manufacturing products or services industry is facing an adverse situation. stage should be withdrawn which are luxurious and Paint industry plays a vital role in socially undesirable. infrastructure development of the Currently 5% country providing different mixture of Supplementary Duty levypaints and saving buildings from able at production stage corrosion and increasing the for locally manufactured functionality of infrastructures. paint increases the cost of paint. Market returns Many companies like We, therefore, propose that, Food & beverages companies have a 58 food & beverages companies are required to take back the unsold products from the market due to date expiry/damages of the sold products. However, a credit note is allowed only if the returns are made within 90 days of invoicing subject to those are not made on account of quality defects. Moreover, how this market return products should be disposed of is not defined in the law. 8. 9. 10. Credit note should be allowed for all market returns irrespective of time passed. regular flow of market returns and often companies are required to dispose of the same to maintain the freshness and hygiene of the products. Since these products are not allowed to be taken back under credit notes, companies have to bear the incidence based on output tax rates. Consequently, it incurs additional cost for the company. As the market return products entail to suffer loss e.g. “Negative Value Addition” so it is not rational to pay VAT on such goods. The time limit for allowing such credit note should also be enlarged because, in practice, the products life may not become expired/dented within such ninety days period. Allowance of input VAT on destroyed goods The food industry is We, therefore, recommend This will enable the company to reduce particularly conscious that, VAT on goods the cost of the company thereby about the shelf life and withdrawn from the allowing the consumers a reduced price. quality/edibility of its market/own warehouses for products and on a regular destruction be allowed to be basis withdrawals are set-off. made from the market or from stocks lying in own warehouses of near expiry/expired products so that they do not pass on to the consumers. Such products are then subsequently destroyed. Currently input VAT on such destroyed finished goods is not allowed. Common VAT software to be developed by NBR -2011-2012 The rule is considered to We suggest that the rule be Use of common VAT software shall both be a very good initiative implemented as soon as diminish room for human error, but the authorities are possible. facilitate calculation and record keeping reluctant towards its as well as reduce harassment for implementation. assesses. VAT Audit/ AG Audit: There are various 1. Provision is needed to To avoid unnecessary harassment and authorities/departments have audit by one protect the interest of business conducting audit, authority/department in a community for the interest of the inspection on the books year and by another nation. 59 of accounts and records of same year. 11. 12. authority/department in alternate year. 2. A clear guide line from VAT perspective to be developed for AG audit. Part adjustment of input VAT We recommend that, the relevant Currently, only 60% of provision be withdrawn and 100% input VAT on expenses of input VAT on such expenditures like telephone, fax, be allowed as VAT rebate. internet, legal advisor etc. and 80% on insurance, gas & electricity is allowed as rebate against the Sales VAT liability. [Ref.: Rule-19 of VAT Rules 1991] Supplementary Duty and Regulatory Duty on SIM Card: SIM Card is the key organ Treating SIM card as nonof the telecommunication luxury item, we propose that industry. Supplementary the Government should Duty (SD) has been withdraw the SD and RD on imposed @ 20% on SIM SIM card for the sake of cards at the import stage. smooth expansion of the Moreover, regulatory telecommunication industry duty (RD) has been and better interest of the imposed at 5% on the people and Government. same. The imposition of SD and RD has increased the cost of SIM card which reduced the expansion of telecommunication industry in Bangladesh. It is notable that the expansion of telecommunication industry is vital for the development of Bangladesh. These expenses are incurred wholly and necessarily for business purposes and hence part adjustment is unreasonable. The withdrawal of the SD and RD on SIM card by the Government will reduce the current cost of SIM card. Consequently, it would be possible for the mobile companies to offer SIM card at the least price which will enhance the subscriber base. If the Government withdraws the duty on SIM card, the subscribers will get the service at lower cost which will ensure more use of telecommunication services and Government will receive more tax and VAT on increased revenues. OTHER ISSUES Sl. No. 1. Existing situation Proposal/Suggestion Justification VAT on commercial floor/space rent 9% payable by tenant. Since this VAT is not rebateable, withdrawal will reduce cost of business. 2. Low price unit packs of toilet soaps, synthetic detergent We therefore proposed that VAT on commercial rent should be reduced from 9% to 1.5% because this has ultimately increased cost of doing business. Low price unit packs of toilet soaps, synthetic detergent powders, shampoos, skin 60 In order to give access to high quality products like toilet soaps, synthetic detergent 3. 4. 5. 6. powders, shampoos, skin cream/lotion and toothpaste are not exempted from VAT and Supplementary Duty whereas VAT is exempted upto Taka 80/- (on local production) on plastic and rubber Hawaii Chappal and plastic footwear falling under HS Code No. 6402.20.00 H.S. Code No. Items 3401.11.00 for Toilet Soaps, 3402.90.10 for Synthetic Detergent Powders, 3305.10.00 for Shampoos, 3304.99.00 for Skin Cream & Lotion, 3306.10.00 for Tooth paste Tk. 605.52/= is payable as VAT & SD on supply of RUIM/SIM on the Tariff value of Tk. 1,095.97/= creams/lotions and toothpaste having retail selling price of Taka 10/- or below should be exempted from VAT and Supplementary Duty on local production. powders, shampoos, skin cream/lotion and Toothpaste at affordable prices and to improve the health and hygiene standards of low income groups, as well as to develop marketing of such products in low price unit packs, VAT and Supplementary should be exempted. With the expansion of the market, it is expected that the Government revenue collection will also go up. The tariff value of RUIM/SIM is unrealistic and should be eliminated completely which will allow operators to pay VAT on actual price of RUIM/SIM. This elimination will accelerate the expansion of Telecom Industry and economy of the country will be strengthen by means of increasing amount of VAT, Income Tax, Duties, FDI etc. VAT & SD on supply of RUIM/SIM shall be payable at the time of any of the following activities, u/s 6 (3) of VAT Act, 1991, which occurs first , namely : i) when the service is rendered; ii) when an invoice is issued; iii) when part or full payment is received; iv) if services rendered from outside Bangladesh, at the time when partial or full payment is made. Adjustment of VAT on uncollected revenue/cancellation of invoice is very much procedure oriented. No explicit provision is available regarding VAT applicable on the own consumption of services by Explicit directives from NBR are required allowing telecom operators to pay SD & VAT after activation of RUIM/SIM and not at the time of supply from warehouse. This type of directives will establish true sense of time for making payment of SD & VAT. Simplified provisions are required to be inserted to make the adjustment of VAT on uncollected revenue/cancellation of invoice Directives/necessary amendment should be made in the VAT Acts so that applicable VAT for services used/ consumed Insertion of this type of provision shall save the operators from making VAT payment on unrealized revenue from own funds. 61 This type of directives/amendment will mitigate the misunderstanding between service renderer and VAT authority and ensure the the service renderer itself. 7. 8. 9. 10. 11. VAT-11 should be submitted to the local VAT office within 5(five) working days. Implied recognition of own VAT management system of Telecom Operators by NBR vide Nothi no. 2(1) Mobile/VAT-Implementation: Service and Excise/99/1237 dated 11.11.2002 by service renderer shall be waived/exempted. Waiver from this provision should be granted in favor of Telecom Operators NBR should explicitly recognize own VAT management system of the telecom operators such as transporting Handsets/SIM/RUIM from warehouse to Point of Sales (POS), documentations, reporting etc. Provisions should be inserted so that indemnification of rebate claimant is ensured for any misstatement made in VAT challan by Service provider or Seller of goods. establishment of true sense of VAT management. Operators will get rid of being defaulter with reference to this unrealistic provision. Operators will get rid of being defaulter with reference to existing unrealistic provisions. There is no provision for It will protect the interest of indemnity in favor of service service recipient from being recipient against cancellation penalized for the fault of service of VAT rebate due to provider. mistakes in the VAT invoices committed by service provider or seller of goods. No specific cell is available in Opening a cell in NBR for This will ensure proper NBR for providing prompt providing prompt clarification on compliance with the provisions clarification on any issue of any issue of VAT law or of VAT laws. VAT law or operational operational guidance from the guidance from VAT point of standpoint of VAT Law. view. Treatment of output VAT for Products Exempted from 15% VAT at Import Stage. Reference: ব্যখ্যাপত্র নং ০৩/মুসক/২০১০ তারিখ্ঃ ১৬ আষাড়, ১৪১৭ ব্ঙ্গাব্দ/ ৩০ জুন, ২০১০ রিষ্টাব্দ। As per above explanation, a We would like to propose for Under given situation, price commercial importer adding adding an additional instruction approval for items for which value more or less than after SL # 5 as a part of Form there is ATV but no VAT @ 15% 13.33% is required to declare Mushak-1Kha as follows: at import stage is contradictory price, pay VAT @ 15% and to as value addition of 13.33% has maintain VAT Current “In case of VAT exempted items no further VAT implication Account. As a result of these, at imported stage, VAT will be whereas in case of value we are also entitled to get paid @ 15% on value addition as addition less than 13.33 will credit of Input VAT duly paid mentioned in Column 5 of result higher VAT implication if at import stage both VAT Mushak-1Kha instead of the VAT any one wants to sell those @15% and applicable ATV. imposable value in Column 9 or products through price There are some products 10”. declaration. which are not subject to 15% VAT but only subject to applicable ATV at import stage. In selling those products with value addition of more or less than 13.33% 62 these are subject to Price Declaration in Mushok 1 Kha. 12. 13. As per requirement of price declaration for Commercial Importer and Trader according to Mushak 1Kha, VAT is to be charged @15% on VAT Imposable Value i.e. Cost of product plus value addition. For VAT exempted items at import stage, if value addition is more or less than 13.33%, price approval is to be taken by showing VAT impossible value of cost of purchase + value addition whereas the importer will not be entitled for credit of input VAT as there is no input VAT. VAT rebate through Treasury Challan in case of service received from outside Bangladesh Generally VAT deduction at Considering the above practical As per section 9 of VAT Act source and thereafter deposit situation, we propose that, 1991, this rebate should be through Treasury Challan in deduction and payment of availed by the service receiver Government exchequer is not applicable withholding VAT will through simplified mechanism allowed for rebate. On the be ensured by remitting bank. as VAT 11 by service renderer other hand, in case of service The bank after deduction and cannot be issued. received from outside payment of the VAT, will issue a Bangladesh, VAT has to be certificate to the payer paid by the service receiver. mentioning including others, So there is no scope of payer’s name, VAT registration collecting Mushak-11 as number and address which will service receiver is liable to be allowed for the payer of pay VAT and for service foreign remittance to be used as Renderer Company it is not instrument to take input VAT possible to be registered in rebate. Bangladesh. VAT payment by the manufacturer/importer on behalf of their distributors Currently, as per prevailing Necessary orders/amendments If the manufacturer/importer VAT Act, the distributors are should be made so that the are allowed to pay VAT liable to pay VAT for manufacturers/importers are considering the distributors distribution of products. allowed to pay VAT considering selling price (without any the distributors selling price, so requirement for printing of Those who are to follow that the distributors are not price), the complex system of credit method, it seems very required to maintain detailed maintaining detailed books & difficult for them to comply books & records like big records and issuing MUSAK with all the VAT requirements manufacturers. This will also 11/11(KA) for every single sale (e.g. price declaration, result in timely collection of like big manufacturers will not 63 14. 15. 16. purchase book, sales book, revenue from VAT. perpetual current accounts register etc.) due to their inadequate logistics facilities. Therefore, they are to suffer a lot of undue harassments. Transfer of materials for production Currently, for transferring We propose that, necessary materials for production from amendments be made so that one factory to another materials to contract factory, price declaration manufacturers or to other units needs to be submitted. of the same organization can be transferred for production, without any price declaration on the basis of raw material transfer Chalan which was practiced earlier. Accounting for the SME (Small and Medium Enterprise): Under the present provision We would therefore recommend of the VAT law, all the that detail record keeping may business entity [vide section be exempted and soften as the 8(4) & SRO issued thereupon case may be for the SME. In this from time to time], are regard, ECR or any other required to be registered electronic device may be viable. with the VAT authority regardless of their turnover. On the other hand, Section 31 & Rule 21 entail that the registered person must maintain the books & records (even if by a small business entity like a conglomerate) as prescribed thereto. SME do not have the logistics support as the conglomerate have. But when a fully compliant company has any transaction with an SME who is not compliant in that case the compliant company is sufferer. Realization of unpaid or short paid VAT Government can realize Government should realize unpaid or short paid VAT and unpaid or short paid VAT and other duties for any period others duties for maximum two from the date on which the years back. said duty or VAT become 64 be required anymore and the VAT implementation at distributors level will be smoother ensuring increased Govt. revenue collection. For transferring materials to contract manufacturers or to other units of the same organization, price declaration needs to be submitted showing value addition (although there is none). This unnecessarily increases cost and hassle without any value addition. SME are not capable to maintain all the required books and records. In view of this, the requirements of the maintaining detail books and records may be relaxed. Books and record should be maintained at most 4 years U/S-33. It is not practical to keep VAT documents for 17. 18. 19. 20. payable. [Section – 55] Trade discount In case of trade discount any Time limitation should not be registered person shall imposed for trade discount. It inform the concerned should be based on the company divisional officer and shall business policy and Govt. should publish a notice in the not fix the percentage of national daily specifying the discount. actual price and the price after trade discount at which goods shall be supplied and duration for which trade discount facilities shall be available and the trade discount shall not exceed 15% of the actual price and shall be given only for maximum 30 days during 12 months period. [Rule -3(6)] VAT payment stage VAT is paid when the goods VAT should be paid at sales point are dispatched from instead of production stage. warehouse to retail store. [Section 6(2)] When no tax can be assessed No tax should be charged before with relevant decision and it disposal of appeal procedure. will be effective until disposal of appeal filed u/s 42(1). Claim of VAT rebate within 90 days time limit The existing provision requires claiming of rebates of input VAT within 30 days of receipt of the (i.e. entry in purchase register and current account) goods or services in factory. 21. 22. We recommend that, relevant provision should be modified to allow a manufacturer to claim input VAT rebate within three months from the date of receipt of materials/services. unlimited time. Trade discount is given for the demand of customers. So there is no specific time for that. Amount of trade discount depend on the business policy of the company. Companies are loosing VAT rebate for imposing such conditions. VAT is for ultimate customer, so it should be paid after sales. It is not logical to charge advance VAT before disposal of appeal. Receipt of goods or services in factory is not always practicable for a manufacturer. There can be numerous reasons for delays in receipt of VAT challans both in case of imported goods and for services. Advance Trade VAT The percentage of advance We recommend the decrease of The reduction in advance trade trade VAT is set at 3%. advance trade VAT be reduced to VAT will help importers to save 2%. and eventually encourage them to invest more. Clarification regarding payee of SD in manufacturing stage The Vat act does not clarify We request that the Act be more Confusion may often arise as to well enough which party is specific in defining the payee for whether the “brand owner” or liable to pay the SD. the “sub-contractor” should Supplementary Duty at the bear the SD in the manufacturing stage. manufacturing stage. Clarification of the Act shall remove confusion. 65 23. Reduction of VAT basis rate The base rate of VAT is We propose that the base rate of With the decrease in VAT base currently set to 15% VAT be reduced to 12.5% rate, the revenue from a single item might be reduced but it would encourage increased sales which will in turn increase VAT revenue through sales volume. Moreover, our neighboring country India has a VAT rate of 12.5%. 24. Extension of time-limit for depositing Withholding VAT: 25. Simplification of VAT rebate on Electricity bills: As per general order # 09/Mushak/201 dated 12 October 2011, at present the time limit for depositing of withhold VAT is 15 (fifteen) working days. Considering huge volume of transactions and the activities to be undertaken, 15 (fifteen) working days time is practically inadequate for the deducting companies to deposit withholding VAT. Electricity consumption when falls under the purview of input item, the VAT registered person becomes eligible for VAT rebate on the input. For the purpose of taking rebate of input VAT, the eligible VAT 11 or equivalent instrument has to be used where the name of registered person, registered address and VAT registration number are to be mentioned. But power supply authorities issue electricity bills only to the consumers which does not include all the required details. Our proposal is that considering the practicality withholding VAT should be allowed to be deposited with the VAT return. We propose to simplify the requirement for VAT rebate by requiring only the name or VAT registration number of the claiming organization in the electricity bill. M.A. Matin Executive Director 66 Taking the trend of business into account, the rules and regulations are required to be made pragmatic so as to facilitate both regulator and assesses for smooth compliance through avoiding redundancy. Since electricity bill is an input there should be a practicable mechanism to avail input rebate out of it. Auditors Report AUDITORS’ REPORT TO THE MEMBERS OF FOREIGN INVESTORS’ CHAMBER OF COMMERCE AND INDUSTRY We have audited the accompanying Balance Sheet of Foreign Investors’ Chamber of Commerce & Industry (the “Chamber”) as of 30 June 2013 and related Income and Expenditure Account and statement of Cash Flows for the year then ended together with the Notes 1 to 12 thereto. The preparation of these Financial Statements is the responsibility of the Chamber's management. Our responsibility is to express an independent opinion on these Financial Statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA) and Bangladesh Auditing Practice Statements (BAPS).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall Financial Statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Financial Statements, prepared in accordance with the recognition and measurement principles of International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as stated in note 2.1 presents fairly in all material aspects the state of the Chambers’ affairs as of 30 June 2013 and of the results of its operations and its cash flow for the year then ended and comply with the Companies Act, 1994 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; b) In our opinion, proper books of account as required by law have been kept by the Chamber so far as it appeared from our examination of those books; and c) The Chamber's Balance Sheet and Income & expenditure Account together with the Notes 1 to 12 dealt with by the report are in agreement with the books of account. Dhaka, 24 October 2013 Chartered Accountants 67 FOREIGN INVESTORS' CHAMBER OF COMMERCE & INDUSTRY BALANCE SHEET AS AT 30 JUNE 2013 APPLICATION OF FUNDS Note Tangible fixed assets- at cost less accumulated depreciation 2013 Taka 2012 Taka 3 18,253,856 18,623,563 4 6 5 7 297,850 411,083 601,000 8,258,700 9,568,634 921,083 369,000 4,465,392 5,755,475 8 Net Current Assets TOTAL ASSETS LONG TERM LIABILITIES 78,883 95,000 750,000 923,883 8,644,751 26,898,607 - 74,853 50,000 750,000 874,853 4,880,622 23,504,185 - NET ASSETS 26,898,607 23,504,185 23,504,185 20,315,148 3,394,422 26,898,607 3,189,037 23,504,185 CURRENT ASSETS Interest accrued on bank deposits Advances and deposits Other receivables Cash and bank balances CURRENT LIABILITIES Accrued expenses Advance annual subscription Gratuity Provision 11c SOURCE OF FUNDS General Fund Balance on 1 July Surplus of income over Expenditure transferred from Income and Expenditure Account These Financial Statements should be read in conjunction with the annexed notes President Vice-President Executive Director AUDITORS' REPORT TO THE MEMBERS See annexed report of date Dhaka, 24 October 2013 Chartered Accountants 68 FOREIGN INVESTORS' CHAMBER OF COMMERCE & INDUSTRY INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 30 JUNE 2013 Note INCOME Membership subscriptions - General Entrance fees Fees for issuing certificate of origin Interest on bank deposits- net of income tax Advertisements income Sale of Old Furniture Sponsorship for 50 Years Sponsorship received for Business Directory Miscellaneous income 10 9 EXPENDITURE Salaries, allowances, benefits and bonus Office rent Telephone bills Electricity bills Gas charges Newspaper Depreciation Subscriptions Audit fee Postage Printing & stationery Photograph expenses Conveyance Entertainment expenses Repairs & maintenance Car expenses Insurance premium on Car Insurance premium on group insurance Courier & E-mail charges Website Bank charges Medical expenses/Assistance Advertisment Legal fee Travel expenses Service Charge Partial provision for Gratuity Expense Gratuity Paid to employee Miscellaneous expenses 11 3 Surplus of income over Expenditure transferred to General Fund 2013 Taka 2012 Taka 5,390,834 480,000 98,500 353,117 1,090,055 110,000 2,397,000 2,500,000 314,600 12,734,106 5,145,000 540,000 82,000 1,197,786 955,142 2,400,000 730,800 11,050,728 3,767,244 110,000 79,898 36,272 5,400 7,220 2,130,255 86,000 30,000 5,317 715,911 6,856 26,820 483,043 153,049 399,600 20,915 51,094 57,250 21,500 29,972 56,850 538,900 83,343 419,200 17,775 9,339,684 2,530,200 1,320,000 81,878 37,987 5,400 5,892 385,998 90,000 30,000 188 984,657 12,346 24,000 326,524 73,302 351,600 20,915 52,044 51,974 2,000 22,610 92,560 11,500 40,000 430,265 110,000 750,000 17,850 7,861,690 3,394,422 3,189,037 These Financial Statements should be read in conjunction with the annexed notes President Vice President Dhaka, 24 October 2013 Executive Director Chartered Accountants 69 FOREIGN INVESTORS' CHAMBER OF COMMERCE & INDUSTRY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013 Note OPERATING ACTIVITIES Excess of Income over Expenditure for the year Paid to Employee against gratuity Provision for Gratuity Depreciation Operating income before changes in Working Capital CHANGES IN WORKING CAPITAL Interest accrued on bank deposits Other receivables Advances and deposits Accrued expenses Advance annual subscription 2012 Taka 3,394,422 3,189,037 (419,200) 419,200 3 4 5 6 8 Net cash inflow from operating activities INVESTING ACTIVITIES Purchase of fixed assets 2013 Taka 3 Net cash outflow from investing activities FINANCING ACTIVITIES 2,130,255 385,998 5,524,677 4,325,036 (297,850) 564,427 (232,000) 56,000 510,000 4,030 7 (7,050) 27,278 45,000 20,000 29,180 660,655 5,553,857 4,985,690 (1,760,550) (18,443,000) (1,760,550) (18,443,000) - Net cash outflow for the year Cash and Bank Balances on '1 July Cash and Bank Balances on 30 June 750,000 - 3,793,307 (13,457,310) 4,465,392 17,922,702 8,258,700 4,465,392 This statement should be read in conjunction with the annexed notes President Vice-President 70 Executive Director FOREIGN INVESTORS' CHAMBER OF COMMERCE AND INDUSTRY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 1 INCORPORATION AND NATURE OF BUSINESS Foreign Investors' Chamber of Commerce and Industry ("FICCI" or "Chamber") was incorporated on 1 July 1963 under the name and style of " The Agrabad Chamber of Commerce and Industry" under the Companies Act, 1913 and subsequently on 9 June 1987, this was renamed as " Foreign Investors' Chamber of Commerce and Industry". Its principal activities throughout the year were to promote and protect the trade, commerce, industry and manufacturers of Bangladesh and to protect the interest of foreign nationals/entities carrying on business in Bangladesh and to render to the Government and or other authorities such assistance, information or advice as may enable them to promote commerce, trade and industry. 2 SIGNIFICANT ACCOUNTING POLICIES 2 Accounting Basis These Financial Statements have been prepared under the historical cost convention and following the recognition and measurement principles outlined in the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). Except employee reirement benefit plan which are recognized on cash basis.Certain disclosures required by IASs and IFRSs are not provided in given as management consider 2 Tangible Fixed Assets Fixed assets are stated at cost less accumulated depreciation. 2 Depreciation Depreciation is charged on straight line method at the rate mentioned against each class of assets shown under note 3 to these Financial Statements and full year's depreciation is charged on assets acquired in the first half of the accounting year while depreciation at 50% of annual rate is charged on additions and at 50% on disposals made in the second-half of the year. 2 Gratuity Gratuity for the employees of the Chamber is accounted for on cash payments basis and no accrual has been made. 3 Tax Provision No provision for Income Tax has been made, As the Chamber is considered to be exempted from the payment of Tax. 3 General Figures appearing in these Financial Statements have been rounded off to the nearest Taka. 71 72 Name of Assets Balance on 1st July,12 Furniture 749,694 Equipment 585,999 A/C 394,850 Computer 218,350 Fax 52,400 Renovation 442,707 Television 31,500 Vehicle 1,660,800 Crockeries 23,100 Flat 18,400,000 2013 22,559,400 2012 4,116,400 1,760,550 18,443,000 1,111,350 40,000 38,500 477,500 93,200 COST Addition Balance at Rate 30 June,13 of % 197,459 1,029,735 10 266,035 413,164 10 258,550 136,300 10 75,000 181,850 10 38,900 13,500 10 442,707 1,111,350 10 31,500 40,000 10 1,660,800 20 23,100 10 18,400,000 10 1,333,251 22,986,699 - 22,559,400 Disposal 3 TANGIBLE FIXED ASSETS- At cost less accumulated depreciation An Independent Correspondent Firm to Deloitte Touche Tohmatsu DEPRECIATION Written Balance at Charge Disposal Balance at Down 1st July,12 30 June,13 Value 2013 630,316 102,974 197,458 535,832 493,904 493,405 40,906 266,034 268,278 144,886 306,220 13,630 258,550 61,300 75,000 150,830 16,260 75,000 92,090 89,760 43,625 1,350 38,900 6,075 7,425 442,707 111,135 442,707 111,135 1,000,215 31,500 4,000 31,500 4,000 36000 1,660,800 1,660,800 23,100 23,100 153333 1,840,000 1,993,333 16,406,667 3,935,837 2,130,255 1,333,249 4,732,843 18,253,857 3549839 4157536 3,935,837 18,623,563 Hoda Vasi Chowdhury & Co. 2013 Taka 2012 Taka 4 INTEREST ACCRUED ON DEPOSITS Gross interest accrued on fixed deposits Less : 10% income tax thereon 330,944 33,094 297,850 5 OTHER RECEIVABLE Accrued income from advertisement Accrued Annual Subscription - 501,000 100,000 601,000 369,000 369,000 393,583 393,583 15,500 2,000 411,083 110,000 393,583 503,583 400,000 15,500 2,000 921,083 668 569 4,000,000 920,285 3,337,747 8,258,700 4,464,823 4,465,392 30,000 9,103 4,380 30,000 5,400 78,883 30,000 7,408 7,445 30,000 74,853 6 ADVANCES AND DEPOSITS Advances Office Rent - Mrs. Rummana Perveen Tax deducted at source* Advance paid Kamranga Designs Ltd. For office renovation Security deposit with T & T Security deposit with Fastnet Services for E-mail 7 CASH AND BANK BALANCES Cash in hand Cash at banks On fixed deposit accounts with Standard Chartered Bank, Dhaka: On SND & Current account with Standard Chartered Bank, Dhaka: 8 ACCRUED EXPENSES Audit fee Telephone bill Electricity bill Subscription to ICC Gas bill 73 9 2013 Taka 2012 Taka 125,000 30,600 16,000 72,000 71,000 314,600 125,000 100,000 43,800 462,000 730,800 2,00,000 2,00,000 1,00,000 1,000,000 1,000,000 2,500,000 1,000,000 100,000 200,000 1,000,000 100,000 2,400,000 MISELLENIOUS INCOME Unilever (BD) Ltd. for Annual Report Grameen Phone for FICCI directory Income from lunch meeting Sale of Business Directory Singer Bangladesh Ltd LSI Industries ltd. (projection screen) * This represents withholding income for deducted at source by the Banks/Financial Institutions at the time of crediting interest. The Chamber expects that eventually this amount will be recoverable and hence included in advances and deposits. 10 SPONSORSHIP FOR BUSINESS DIRECTORY British American Tobbaco Co. Ltd Standerd chartered Bank chevron Bangladesh Robi Axiata Ltd Airtel Bangladesh Ltd Lungla Sylhet Tea Co. Surmah Valley Tea Co. Chittagong Warehouse Ltd Pacific Bangladesh Telecom Ltd Pacific Bangladesh Telecom Ltd 11 SALARIES, ALLOWANCES, BENEFITS AND BONUS 2013 a. b. Number of employees Employees engaged for the whole year drawing remuneration: (I) Above Tk 36,000 per annum 7 (ii) Below Tk 36,000 per annum 7 Employees engaged for a part of the year drawing remuneration: (i) Above Tk 3,000 per month (ii) Below Tk 3,000 per month 7 74 Taka 2012 Number of employees Taka 3,767,244 3,767,244 3,767,244 5 5 2,530,200 2,530,200 5 2,530,200 - c. Gratuity Provision Employees are entitled for gratuity provision at defined rates, upon termination of the employment with the chember. A partial provision of tk. 750,000 has been made during the current year on account of cumulative shortfall in gratuity provision from prior years. Management has decided to cover the remaning shortfall within the next two to three years after performing a detailed calculation of its gratuity obligation. 12 TRAVEL EXPENSES This represents the cost of air ticket and accomodation for overseas trip of the FICCI Executive Director President Vice-President 75 Executive Director