Dhaka, Monday, 21 October 2019

2pc incentive for remittance receipts

2pc incentive for remittance receipts

Staff Reporter : The government has proposed an allocation of Tk 3,060 crore in the budget for the next fiscal year of 2019-20 to provide two per cent incentive for remittance receipts and to encourage the expatriate workers to send their money through the legal channel.

In his budget speech at parliament on 13 June, finance minister AHM Mustafa Kamal said that to mitigate the burden of increased expenses in sending foreign remittance and to encourage bringing remittance to the country through legal channels, an incentive at the rate of two per cent on money remitted by expatriate Bangladeshi would be provided from this financial year.

He proposed an allocation of Tk 3,060 crore and hoped that would significantly increase the remittance flow through legal channels and discourage the ‘hundi’ business.
The finance minister said that the country’s remittance receipts in FY 2005-06 were $4.9 billion, which grew by three times to reach $15 billion in 2018.
Experts, however, said that the government’s cash incentive to encourage inflow of remittance would introduce multiple currency rates setting a bad precedent and scope for abuse.
Policy Research Institute executive director Ahsan H Mansur criticised the move saying that it would create multiple currency rates and establish a bad precedent.
Readymade garment exporters would be encouraged to push for their long-standing demand for multiple currency rates with the introduction of cash incentive for remittance senders, he said.
Ahsan H Mansur noted that if the gap between the currency rates became 2.5 per cent, it would go against the international practice.
He said that chance of abuse by whitening illegal money through the planned scheme could not be ruled out.
Former Bangladesh Bank governor Salehuddin Ahmed said that incentive for remittance senders should be given carefully so that vested quarters could not abuse it.
In his budget speech, the finance minister said that expatriate Bangladeshi workers and their families often face financial losses and risks due to accidents and various other causes as there are no insurance facilities available for them.
‘Preparations have been taken to bring the expatriate workers under the insurance scheme, which will be implemented shortly,’ he said.
Kamal said that they had been striving to develop skills of workers to make them competent for foreign labour markets.
‘As a result of our time-bound plans and their proper implementation, the rate of overseas employment has increased which in turn enhanced our image and also played a role in increasing the remittances,’ he said.
The budgetary allocation for expatriates’ welfare and overseas employment ministry decreased to Tk 591 crore for the coming fiscal year from Tk 595 crore for the outgoing fiscal year.
WARBE Development Foundation chairman Syed Saiful Haque said that as the EWOE ministry performed better in implementing projects in the outgoing years, so the budget for the ministry should be increased.
He urged the government to bring the migrants and their family members under the social safety net programme considering their contribution to the economy.