Vol. 4 Num 94 Fri. August 29, 2003  

Dhaka may decide Saarc multilateral tax treaty soon

Bangladesh may soon finalise its position on a multilateral tax treaty proposed to be signed among the Saarc member countries, sources said.

The Saarc Secretariat in June this year proposed for such a comprehensive treaty to boost regional trade and investment avoiding double taxation.

However, the agreement will be signed when all seven members of the South Asian Association for Regional Cooperation (Saarc) reach a consensus. The association comprises Bangladesh, India, Pakistan, Nepal, Sri Lanka, Bhutan and the Maldives.

Government officials said the Bangladesh position on the proposed agreement is now under process as different government agencies are giving their opinions on it.

Meanwhile, the National Board of Revenue (NBR), the Tariff Commission and the Bangladesh Bank have expressed their views in favour of signing the treaty.

These government agencies said trade and investment would be facilitated once such a tax treaty is signed among the Saarc members. They formally informed the Ministry of Commerce about the positive aspects of signing the treaty, ministry officials said.

The commerce ministry is set to place the proposal at the cabinet meeting for approval to finalise the country position on the issue, they added.

All the Saarc members will place their country positions at the upcoming 12th meeting of the Committee on Economic Cooperation of Saarc. The meeting will be held in New Delhi at the end of this year, sources in the Ministry of Foreign Affairs said.

It was learnt that the first Saarc meeting on a comprehensive tax treaty was held in Islamabad in August 1999 where the member countries could not decide on the issue due to lack of ideas about such a multilateral tax system.

Bangladesh has so far signed agreements on avoidance of double taxation with India, Pakistan and Sri Lanka among the Saarc countries on bilateral basis. A similar agreement is likely to be signed with Nepal soon, sources in the NBR said.

"The bilateral tax agreements would not be affected once a multilateral tax treaty under the SAARC umbrella is signed," a high official in the NBR said, when asked.

According to the Saarc charter, all the member countries have to reach a consensus prior to deciding any matter having a multilateral character. So, signing of a multilateral tax treaty would be a critical task, a foreign ministry official said.