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Eid pushes up remittance

  • Published at 12:22 am September 20th, 2016
Eid pushes up remittance
Bangladesh saw 17% rise in remittance inflow last month from its expatriates as they sent home more of their earnings on the occasion of Eid ul Azha, one of the largest Muslim festivals. The total amount of remittance sent in August ahead of Eid was $1.18 billion compared to $1 billion in July, according to the Bangladesh Bank data. The remittance Bangladesh received in the first two months of the current fiscal year was 15% lower than the same period in previous fiscal year. A total of $2.18 billion remittance came in July-August period while at the same time last year, it was $2.58 billion. Remittance inflow became slower after gulf countries fell in crisis of low oil price, said a senior executive of Bangladesh Bank. Remittance from gulf countries dropped by 5.7% to $8.55 billion in the last fiscal year compared to $9 billion in the previous fiscal year. The total remittance came below $15 billion mark in the last fiscal year reaching $14.93 billion mainly hit by low oil price in global market. Bangladesh experienced a significant rise in manpower export to Saudi Arabia last year after the country lifted ban on hiring Bangladeshi workers. But the remittance inflow remained slower due to falling oil prices in the international market as oil export is the only revenue source of the gulf countries. The number of total overseas employment rose to 555,000 last year whereas the figure was hovering around 400,000 in the previous two years, according to data from Bureau of Manpower, Employment and Training (BMET). The higher manpower export resulted in record remittance inflow of $15 billion in the year 2015 compared to $14.94 billion in 2014. Meanwhile, Saudi Arabia proposed 6% tax on money sent out by the expatriate workers. If implemented, Bangladesh might lose more than Tk150 crore a year from its remittance income. The country’s Shura Council finance committee on May 2 proposed a tax on remittance, starting from 6% in the first year and gradually reducing to 2% permanently from the fifth year onward, reports Arab News. Saudi Arabia is the largest employer of Bangladeshis abroad. If it approves the tax there will be a significant drop in remittance inflow from the country. In 2015 Bangladeshi expatriates sent $3.22 billion remittance from there. In the last five months it was $943.25 million. At 6% tax rate, the last year’s figure would drop by $193.047 million or Tk151.39 crore. The tax proposal was drafted by Hossam Al-Anqari, head of the General Auditing Bureau and former member of the Shura, who said this would be a way to force expats to invest or spend their money in Saudi Arabia. The tax would be on all money transfers by expats, with the collection being done through financial institutions in the country, and deposited in a special government account, according to a media report on Thursday. Abdur Rouf, a joint secretary at the Expatriates Ministry of Bangladesh, said: “We are still not aware of the matter, so we cannot make any comments about it.” Dhaka Tribune contacted some Bangladeshis living in Saudi Arabia recently to learn their views on the proposed tax. Billal ahmed said: “I’m curious to know, what are the investment opportunities for expats in the Kingdom?” Another expatriate, Sannu Sheikh, said: “How can expatriates invest in the Kingdom when they need a local kafeel for any business?” It is estimated that 1.28 million Bangladeshis are now working in Saudi Arabia, making it the largest destination for labour exports from Bangladesh. As oil prices drop globally, the Saudi government has hastened to wean itself from petroleum, with attempts to diversify the economy and replace foreign workers with citizens.