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Asian Development Bank (ADB) is working to provide around $2 billion in budgetary support to Bangladesh this fiscal year in a co-funding initiative it plans to lead, a move that would to some extent relieve the existing pressure on the foreign exchange reserve.
“We are working on it. I am positive. We have some internal matters among the financiers,” said Edimon Ginting, the ADB’s country director for Bangladesh, yesterday. He was talking to reporters after a meeting with the planning minister at Sher-e-Bangla Nagar in the city.
The fund would come in two phases: $1.05 billion in April and about $1 billion more in June, learned The Daily Star from the finance ministry officials involved with the proceedings.
Of the sum, the Manila-based multilateral lender will provide $400 million, Japan International Cooperation Agency $250 million, Asian Infrastructure Investment Bank $250 million and South Korea $150 million.
Besides, over a climate-related issue, the ADB will provide $360 million and the others $650 million.
However, the total fund of around $2.05 billion will be provided under a “public financial management support” to bring some relief from the ongoing decline of the foreign exchange reserve.
According to finance ministry sources, the government would have to implement at least 14 reforms in return for the funds.
The other donors are not coming up with separate conditions; they are going along with the reform programme drafted by the ADB.
The government has already implemented some of the conditions under an ADB-designed co-financing programme and is working earnestly on implementing the remaining reform actions, said a finance ministry official on condition of anonymity.
One of the conditions is getting amendments to an Income Tax Ordinance 1984 approved in parliament. The amendment would make income tax return submission mandatory for those who have spent Tk 4 lakh when travelling abroad in the previous income year, excluding Hajj spendings.
In doing so, the government would be able to expand the taxpayer base for income tax through expenditure tracking.
The government must also consolidate and revise the law on income taxes and secure cabinet approval.
Regarding the ADB conditions for receiving the $2.05 billion, Planning Minister MA Mannan said reform was a continuous matter that has to be always updated as per need.
He also said the National Board of Revenue was a major player in mobilising internal resources and so from time to time it needs to bring in reforms for its own interests.
(TDS)
