The government has increased cash incentive to 2.5 percent to touch a new landmark of $26 billion in remittance for the current fiscal year 2021-22.
This move took to encourage expatriates to send their hard earn money through legal channels.
The government has increased the cash incentive on remittances to 2.5 percent from the existing 2 percent, said a Finance Ministry press release.
The decision, which came into effect on Saturday, is expected to improve the overall living standards of common people, boosting the foreign currency reserves, checking money laundering, and generating employment.
This increase of cash incentives against remittance is a gift from Prime Minister Sheikh Hasina to the expatriate Bangladeshi workers marking the New Year.
Finance Minister AHM Mustafa Kamal told reporters the government's move to introduce remittance incentives in FY2019-20 has worked wonders.
Regarding increasing incentives for remittances, the finance minister said we have set a target of collecting $26 billion in remittances in the current fiscal year 2021-22. For this, the incentive has been increased from 2 percent to 2.5 percent, he mentioned.
Before giving incentives, only 49 percent of remittances came to the country legally, he said, adding that we are trying to bring all the money earned by expatriates to the country legally.
In this, we will have an account of expatriate income, he mentioned.
We are trying to bring it (remittance inflow) to the right channel. We will discourage informal (illegal) channels. That is why the incentive has been increased, he further said.
The release said the government first decided to provide 2 percent cash incentives against sending remittance in the FY20 which resulted in a healthy inward remittance amount of $18.20 billion which was 13 higher higher than the previous fiscal year (FY19).
In continuation of this, the inward remittance amount was $24.80 billion in the last fiscal year (FY21) was also 36 percent higher than the previous fiscal year (FY20).
Bangladesh Bank first started the groundwork for a 2 percent cash incentive for expatriates over remittance inflow in 2019.
It widened the cash incentive facility and enhanced the paper-free incentive receivable limit in 2020.
Despite the decline over the last few months, Bangladesh will receive more than $ 22 billion in remittances in the outgoing year, more than any other year in the history of Bangladesh.