Bangladesh eases rules further to get cash incentives on remittances

[Bilal9]

News Desk, bdnews24.com​

Published: 23 May 2022 07:17 PM BdST Updated: 23 May 2022 07:17 PM BdST

Migrant workers in essential services wearing safety vests cross a street at Orchard Road, amid the coronavirus disease (COVID-19) outbreak in Singapore, May 27, 2020. Reuters

Bangladesh Bank has relaxed further the conditions for expatriates to obtain 2.5 percent cash incentives on remittances as the authorities scramble to shore up foreign currency reserves.​

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The expatriate Bangladeshis do not need to submit any paper for incentives on more than $5,000 or Tk 500,000, the central bank said in a notice on Monday, citing a government order.

To lift up the sinking flow of remittances in the early days of the coronavirus pandemic, Bangladesh Bank raised the ceiling from Tk 150,000 to Tk 500,000 for Bangladeshis abroad to send remittances without papers in May 2020.

The time to submit papers for those sending more than Tk 500,000 was increased from 15 days to two months at that time.

They needed to produce copies of their passports and appointment letters of their overseas employer to claim incentives. Those who own a business required copies of their licenses.

It means Bangladeshi workers without the papers, or those unwilling to submit the documents, were unable to get the incentives. Many of the expatriate Bangladeshis in the Middle East, Malaysia, Europe or America are undocumented.

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Although the cash incentives were 2 percent and many migrant workers returned home, remittances reached record levels during the peak of the pandemic as, analysts believe, the illegal channels were closed due to the pandemic while many expatriate Bangladeshis opted for the incentives.

The government raised the incentives to 2.5 percent in the beginning of 2022, but remittances dipped with life becoming more normal across the world, making it easy for the migrant workers to use the illegal channels to send money.

Now, higher dollar expenditure for imports and other necessities is putting pressure on the foreign exchange reserves. Bangladesh had a record $48.02 billion in its reserves in August 2021, sufficient to pay import bills for up to one year, but a steady decline has brought it down to $42 billion.

The reserves fell below the $42 billion mark recently, a fall enough to make the government nervous as the economy has already been suffering from sluggish inward remittances and rising inflation.

Besides the efforts to boost remittances, the government braced for austerity measures to cushion fallouts of the global economic volatility caused by the Russia-Ukraine war, Prime Minister Sheikh Hasina said in a recent programme.

To tackle the latest situation, especially the pressure on reserves due to an increase in imports, the government is also discouraging the import of luxury items and imposed restrictions on foreign trips of government officials and employees of private organisations.

 

[mb444]

Expats wants to send money...why burden them with paperwork. Abandon the whole lot of it.

If we compare how much money is allowed to be whiten each year this 2.5% incentive is nothing.... GoB will make it back many times over through economic activities hopefully translating into tax receipts. Even if it does not it can easily make 2.5% by investing some of reserves in short term international money markets.