Muhith reprimands ministries for failure to offload SoEs' shares

FE Report (February 02, 2011)

Finance Minister AMA Muhith has reprimanded the ministries concerned for their failure to offload shares of the state-owned enterprises (SoEs) under their control defying the directives from the Prime Minister, a top official in the Ministry of Finance (MoF) said.

Muhith in an official note sent early this week made a few harsh observations about the defaulting ministries.

The MoF has convened a meeting on February, 10 to review the status of SoEs' share offloading.

The MoF Monday last sent letters to different ministries including ministries of power, energy and mineral resources and civil aviation criticising them for ignoring the decision coming from the highest authority of the government on offloading the shares of the state-owned firms.

The letter, a copy of which is available with the FE, contains the observation made by the finance minister.

Earlier, Hasina in November, 2010 approved a proposal of the finance ministry to offload up to 49 per cent stakes the government holds in 27 SoEs by December of the same year.

'The deadline (to offload the shares of SoEs) was set after obtaining approval from Prime Minister. No ministry can change the deadline. So, energy and mineral resources division did not act rightfully,' the letter quoted Muhith, as saying.

Of the 27 enterprises, nine fall under the power and energy ministry, eight under the industries ministry, four under the post and telecommunication ministry, and three under the civil aviation and tourism ministry. The rest three are under the communications, shipping and health ministries.

Of the 27 SoEs, eight are already listed on the capital market. However, three (Padma Oil, Atlas Bangladesh and Usmania Glass) were asked not to offload their shares further as 49 per cent of their stakes are already held by general investors.

The remaining five state firms were asked to offload up to 49 per cent of their shares.

However, barring the Rupali Bank Ltd none of the SoEs slated for listing has so far implemented the decision of the government.

Officials in the MoF said energy and mineral resources division had informed them about the decision to extend the deadline for offloading the shares of their three firms to March 31, 2011. The division had taken decision on its own and did not bother to have consultation with the finance ministry, they said.

The four SoEs are -- Jamuna Oil, Meghna Petroleum and Eastern Lubricants.

SEC likely to revise existing margin loan ratio

FE Report (February 01, 2011)

The securities regulator will sit today (Tuesday) with key stakeholders of the stock market in a move to take measures for a sustainable stock market, sources said. At the meeting, the leaders of both the bourses, Bangladesh Merchant Bankers' Association (BMBA) and Bangladesh Association of Publicly Listed Companies (BAPLC) are expected to remain present. According to sources, the SEC is likely to revise the existing margin loan ratio on the basis of discussion with the stakeholders; and the merchant bankers are likely to get some responsibilities in providing their margin loans.

'Stock mkt crash won't affect revenue earning'

FE Report (February 01, 2011)

The National Board of Revenue (NBR) Monday said its revenue earning would not be affected due to the recent stock market crash.

The board has also blamed the big players for share market scam saying that individual investors constitute a small portion of the market.

Our revenue earning target from the stock market for the current fiscal was originally based on a daily turnover of Tk 15 billion. The daily turnover has now dropped to Tk 10 billion, which had earlier soared to Tk 30 billion. So, we are optimistic to meet the target on an average," said Aminur Rahman, income tax policy member of the board.

Basir Uddin Ahmed, tax administration and monitoring member, said: "Share market is not an economic indicator. Revenue earning depends on export diversification and domestic production."

The NBR members said these while responding to a query from newsmen at a press briefing on NBR premises in the city.

"Tax measures had nothing to do with the recent developments in the share market," said NBR chairman Dr Nasiruddin Ahmed.

About imposition of gain tax on individual investors, the NBR chief said: "We will think about it later. But we will have to be cautious before taking any step for the sake of the growth of the capital market."

Aminur Rahman said around 65 per cent investors are institutional while 35 per cent are individuals. He also said institutional investors might be responsible for share market scam, not individuals.

Basiruddin Ahmed said the NBR always sets target considering the risk factor, if any sector collapses it would meet revenue earning target from other sector.

NBR chairman briefed newsmen on the revenue earning of the Board in the first half of the current fiscal. Revenue earning posted 109 per cent growth over the target and 27 per cent growth over the corresponding period last year.

"Income tax achieved the highest growth of about 34 per cent. It is a record since independence of the country," the NBR chief said.

He expressed optimism over surpassing the revenue earning target set for the current fiscal.

In the July-December period, VAT collection posted 30 per cent growth while customs (export and import) 20 per cent over those of the corresponding period.

Customs member Hossain Ahmed said: "The customs duty collection turns higher due to increased import of raw materials and capital machinery."

On upward trend in revenue earning amid sluggish economic situation, NBR members listed increased efforts, field-level visits, motivational campaigns and intensified monitoring for the success.

On two draft laws for direct tax and VAT, the NBR has sought opinion from experts to improve those laws.

Aminul Karim, income tax member (tax exemption), said the board has now taken a strict position on offering new tax exemptions.

Farid Uddin, member VAT and customs administration, said the NBR is going to introduce ADR within a short period.

"We have observed the best practice of ADR in South Africa recently. Around 80 per cent of the cases are being solved with the ADR," he said.