Tax return submission rule for NRB bank sponsors may be waived

The government is considering relaxation of the condition relating to 'mandatory tax return submission' by the non-resident Bangladesh (NRB) sponsors of the proposed NRB bank, a top official of the Ministry of Finance (MoF) said Friday. Finance Minister AMA Muhith gave green signal in this connection following a recent application submitted by an NRB on behalf of the 104 NRBs from 12 countries, sources said. The minister has passed the application on to the secretary of the Banking Division of the ministry for necessary action. The condition number six of the proposed NRB bank has made mandatory for the sponsors submission of tax return and certificate in this regard. The condition reads: "Sponsors' contribution to the share capital of the proposed bank will be required to be out of the net worth declared to the concerned tax authorities; contribution out of borrowings shall not be acceptable. Tax return and certificate has to be submitted." The Bangladesh Bank (BB) recently has sought application from the NRBs to be sponsors for establishing a bank. Any individual or a group of individuals can submit applications to become sponsor-directors of the bank. One Engr. Ali in his letter to the Foreign Minister said, "It won't be possible for NRBs to submit declaration, return, and certificates in favour of the huge amount of earnings from the 'authorities' concerned. There are various complexities in the laws and regulations of different counties." He wrote: "NRBs may face difficulty abroad in the future regarding the earnings which will be invested in the bank. The mandatory tax return submission policy may bring down the number of NRB entrepreneurs." Talking to the FE Friday, Engr. Ali said the Finance Minister has taken into consideration their concern in this connection and is thinking it over. Mr Ali, vice president of USA Awami League, is the head of a group of 104 NRBs from 12 countries who want to be sponsor-directors of the proposed bank. He said the authorities in the UAE (United Arab Emirates) and Portugal do not give tax return to the tax payers. "Thus, it will be impossible for the non-resident Bangladeshis in the UAE and Portugal to enclose tax return with the application. That's why we want the relaxation," he added. Mr Ali, an NRB hailing from Rajnagar in Moulvibazar district, further said that of the 104 persons united for the bank, 30 per cent come from greater Sylhet. Mr. Ali is involved in textile and restaurant business in the USA. The NRB bank will be established with a paid-up capital not less than Tk 4 billion. Share holding of the NRB bank will be 50 per cent from the NRB sponsors, and the rest 50 per cent will be collected from public offers. The minimum shareholding stake of each sponsor will be Tk 100 million, and the maximum will be 10 per cent of the bank's total share-capital.