'Border haats' not soon as Dhaka differs on tax, transaction issues

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Nazmul Ahsan
Dhaka has decided to differ on a number of issues including taxation and transaction modalities under the proposed Border Haat agreement between Bangladesh and India, sources in the Prime Minister's Office (PMO) said.
The decision was taken recently at a high-level meeting at the PMO. The meeting was presided over by Dr Mashiur Rahman, Economic Affairs Adviser to the Prime Minister. Representative from different government ministries and agencies attended the meeting.
The Ministry of Commerce (MoC) has been given the responsibility to convey the latest position of the country to New Delhi, the meeting decided.
"We will soon communicate with the Indian High Commission in Dhaka appraising them of our latest position," a high official in the MoC said.
Commerce ministry officials of the two nations hammered out the draft deal in mid May last in Dhaka, agreeing to impose caps on trading and making the bazaars accessible only for the people who live in and around the area.
The MoC sent the negotiated draft to the PMO for approval prior to inking the deal between Dhaka and New Delhi, sources said.
According to the meeting decision at PMO, Dhaka will ask New Delhi to ensure that no local tax of Indian State Government will be imposed on border haat trading as the issue was not there in the negotiated draft, a high official, who attended the meeting, said.
According to the negotiated draft of the proposed agreement, trading at the border markets will not be taxed or levied, won't fall under the two nations' foreign trade policies and laws.
"We now want the draft agreement say the border haat trade is free from both central and state taxes to avoid any uneven trading system as Bangladesh has no local tax compared to those of Indian states," a top official in the PMO said.
Besides, the negotiated draft said an individual will not be able to trade above $50 at the bazaar and the trading should be conducted in currencies of the two nations.
Officials in the PMO said a meeting is required between central bankers of two countries to clarify the transaction modalities to prevent possible smuggling under the proposed haat as the draft agreement did not say anything about establishing bank or Money Exchange outlet to deal with the currencies of two countries.
Furthermore, the negotiated draft agreement said a committee comprising government officials and officers of border security forces of the two nations will manage the markets and will sit periodically to review its operation. The committee will be headed by local administration.
However, the meeting at PMO has decided the Deputy Commissioner will head the committee.
Farm and home made items produced in 10 kilometer radius of border bazaar will be allowed to trade in the bazaar, which will be set up within five kilometers of the frontier, instead of 10 kilometer as agreed earlier in May between the trade officials of two countries, the meeting decided.
Two bazaars will be set up in the first phase - one in Sunamganj and another in Kurigram along India's Meghalaya frontier - in a bid to boost trade and commerce for local border people. The trading will be held once a week.
Dhaka and New Delhi agreed to set up border markets early this year when Prime Minister Sheikh Hasina made her first visit to India.
India has been pressing the government to ink the deal the soonest possible. Earlier, it asked the government to start the markets on the first day of the Bengali new-year - on April 14 last-- but the attempt fell through after concerns were raised that the proposed deal on the border bazaars lacked steps against smuggling.
In 1972, a total of 181 land customs stations were established along the border to facilitate cross-border trading. Operations of around 130 stations were suspended a year later after allegations that they spurred smuggling.