Bangladesh Bank simplifies remittance for foreign airlines/shipping lines
_A Monitor Report16 Sep, 2020 | 402 Views|-+
Dhaka : The Bangladesh Bank, issued a circular on September 3, making remittance of the sale proceeds of foreign airlines, operating to and from Bangladesh easier.
It may be recalled here that for long foreign airlines operating to and from Bangladesh were fighting for simplification of their remittances. Under the old rule there were lots of paper works involved. So much paper work was there, that airlines required separate staff to do the job of seeking approval from Bangladesh Bank in remitting their sale proceeds. Sometimes it used to get delayed for months together.
The new rules
The Foreign Exchange Operation Department of Bangladesh Bank issued SPA Circular No 1 on September 3 to simplify its rules on surplus earnings remittance by the foreign airlines. The BB, through the circular, has allowed calculation of surplus earnings of the foreign airline operators on the basis of passage and freight collections. Besides, the banks were allowed to remit on account of surplus earnings against passage and freight based on actual realisation. The remittance would be allowed upon all collections, supported by the bank statements.
The banks were also asked to remit after keeping a minimum 10 per cent provision on the collections for the refund of unavailed journeys.
Apart from these, the necessary adjustments for all the disbursements including accrued expenses, refunds and income tax payments were made conditions for remittance of surplus earnings by the foreign airlines entities. The entities would be allowed to carry forward the unused portion of the provisions in the following period. The fund borrowed by the airlines cannot be included in the unused portion of fund and would not be allowed to remit abroad, the BB said.
The central bank also scrapped the requirement of producing hard copies as a proof of sales of tickets. Requirement of Form P/Form P-2 from outgoing passengers against sales of tickets in local currency will no longer be required.
The exemption would also be applicable for the foreign shipping lines and Bangladeshi airlines or shipping lines operating on international routes. The central bank also scrapped another provision, submission of statement of passage for the IATA member, instead the airlines were asked to submit IATA system generated documents.
The documents include Billing and Settlement Plan (BSP) airlines billing summary and BSP statement summary including system generated counter sales and excess baggage sales report containing full details of each transaction, and a summary statement of revenue and expenditure.
However, the exemption from submission of statement of passage would still be a requirement for the non-IATA members. There would be no requirements of producing documents, except bank statements, in support of disbursements of different types of applicable taxes. Instead of submitting these documents, the airlines operators were asked to preserve the documents for any future inspection of the BB and the banks.
Meanwhile, Monzur Morshed, former president of Association of Travel Agents in Bangladesh (ATAB) alleged existence of anomalies in the new circular and demanded corrective measures to remove those. The former ATAB president opined that the anomalies likely to create scope of misuse of relaxed control and incur revenue losses for the government and business loss for the local travel agents.