Business

WB lifts commitment fee on loans not released in’09

The World Bank (WB) has withdrawn commitment charges on loans approved, but not yet released in the fiscal 2008-09, following a request by the government

However, the multilateral lending agency will not withdraw such charges on loans that have already been released for Bangladesh, according to a WB letter sent to the Ministry of Finance recently.
The WB generally charges 0.5 percent commitment fee on committed and unutilized disbursed loans. Every year the government has to pay a huge amount of money as commitment fees due to its (the government's) failure to spend money or for the donor's unwillingness to release committed money claiming faults in expenditure.
Earlier in 1986, the WB had also withdrawn commitment fees fully, which was effective till 1998. It again attributed such fees in the following year.
The letter, sent by the WB Loan Service Group Division, said in 1988 the Executive Director (ED) of WB decided that the commitment charge levied by the International Development Association (IDA), the WB's concessionary arm, be made variable within a range of 0-0.50 percent per annum.
It was further agreed that the applicable charge for each fiscal year would be reviewed and set on an annual basis.
Concerned officials of the Ministry said Bangladesh has demanded to withdrew commitment charge while a high level WB mission came to Dhaka in November last year. But, they did not say anything in this regard at that time.
Later, they abstained from addressing commitment charge in loan agreements.
Sources said commitment charges normally became effective 90 days after signing loan agreements. Sometimes the government has to pay commitment charge if the money is not released by the donor, showing glitches in the disbursement or project implementation procedures.
An official of the Ministry said in many cases hard conditions imposed by the donor delay the disbursement process and also project duration.
"As donors attribute tough conditions for loan disbursement, commitment charges become a burden for government," he added.
He further said sometimes donors delayed loan disbursement following lack of coordination between concerned Ministries and Divisions.
Though the WB had realised 0.5 per cent commitment fee for long, in 2000 it reduced it to 0.35 per cent.
Economic Relations Division (ERD) sources said regarding the WB loans to Bangladesh, in an average around US $1.5 billion remains in pipeline every year.
In that case, government has to pay a huge amount of money as commitment charges on different grounds.
An ERD official, however, said that commitment charge was not attributed in the last seven to eight loan agreements with the WB.
-New Nation

Govt extends tax return deadline to Oct 7

The National Board of Revenue (NBR) yesterday extended the deadline for submission of income tax returns to October 7 on 'special consideration' following strong demand from leading business chambers.

NBR Chairman Nasiruddin Ahmed told The Daily Star last night that the deadline, which expired yesterday, has been extended for a week.
"We have extended the deadline on special consideration after the businessmen made strong demand," he said.
The extension came on the last day of the five-day long income tax fairs in Dhaka and Chittagong, organised to boost tax collection and bring more people under the tax net.
Earlier, Ahmed, at a press conference at the Diploma Engineers Institute in Dhaka, said 55,707 taxpayer identification number (TIN) holders submitted their income tax returns worth Tk 117.19 crore.
Such fairs would be organised at divisional cities from next year, he added.
It was the first fair of its kind in the country and a total of 17,560 new TINs were registered.
The fairs opened simultaneously at the auditorium of Diploma Engineers Institute in Dhaka and the MA Aziz Stadium in Chittagong on September 26.
Thousands of businessmen, professionals and share traders thronged the fairs. Many queued for hours to submit their returns.
The events offered TINs to new taxpayers and helped them fill income-tax forms from 10:00am to 6:00pm each day. The authorities, however accepted statements till 8:00pm yesterday.
As of September 29, about 3.26 lakh TIN-holders submitted tax returns, which is less than half of the last year's submission by 7.57 lakh people, according to NBR officials.
A meagre 7.57 lakh people paid income taxes in a country of 160 million people, although there are about 27 lakh TIN holders.
At 8.5 percent, Bangladesh's tax-gross domestic product ratio is one of the lowest in South Asia.
-Daily Star