Expatriate Remittance and NRB Bonds
Expatriate Remittance and NRB Bonds earnings of Bangladeshi expatriates sent home. The flow of expatriate income is playing an important role in keeping the external sector of Bangladesh in favor. Remittance income sent from abroad is completely income tax free. In order to encourage sending remittances through legal routes, the government introduced an incentive at the rate of 2% along with income tax-free facilities. The incentive rate was later increased to 2.5% from May 2022.
In 2001, Bangladesh economy received USD 1.9 billion from its expatriates abroad. The remittance inflow increased to 24.8 billion in FY 2021 which was 36.1 percent higher than the previous year. After FY 2016 the external sector went down to disfavorable. To recover the situation, the government started a 2 percent incentive for home bound remittances. In fact, it helped to deduce the current account deficit.
Bangladesh nationals working and earning abroad are allowed to invest in 5-Year Wage Earners Development Bond, 3-Year US Dollar Premium Bond and 3-Year US Dollar Investment Bond in Bangladesh. The profit/return rate for Wage Earners Development Bond is 12% in BDT. Premium bond offers 7.5% return in foreign currency and US Dollar Investment Bond offers 6.5% in foreign currency. All income from those 3 eurobonds (bonds issued in other than own currency) is tax free and principle is repatriable to abroad. At the end of June 2021, outstanding balances of Wage Earners Development Bond, US Dollar Premium Bond and US Dollar Investment Bond were USD 1.5 billion, USD 33.2 million and USD 258.8 million. [Bayazid Sarker]
