From now, foreign airlines would not be required to submit documents of every ticket of outbound passengers for getting approval from the Bangladesh Bank to repatriate their profit.
The Bangladesh Bank issued a circular in this regard on Thursday, simplifying the procedure of remitting earnings of foreign airlines operating in the country.
According to the circular, submission of the statement of immigration stamp will not be required for IATA (International Air Transport Association) member airlines. Instead, the airlines will submit IATA system generated documents such as airline billing summary.
The airlines would no longer require to submit copies of documents, except bank statements and documents, against the payment of different types of applicable taxes such as excise duty, embarkation fee, tax deduction at source, and so on, in support of the disbursements. In its place, they will retain the documents at their end for submission to banks and the inspection team of the Bangladesh Bank, as and when required, according to the circular.
To simplify the transaction modalities of foreign airlines, it has been decided that their surplus earnings may be calculated on the basis of passage and freight collections, said the circular.
Accordingly, banks will allow remittance on account of surplus earnings against passage and freight based on actual realisation provided that all collections are supported by bank statements, minimum provision at 10% on the collections is maintained for refund of unavailed journeys and necessary adjustments are made for all disbursements including accrued expenses, refunds, and income tax paid.
Remittance is, however, to be allowed out of the fund available, without borrowed one, in the designated bank account, said the circular with immediate effect.
Foreign airlines have long been demanding to omit the provision of submitting each sales ticket for repatriating their earnings, as maintaining each ticket to show to the authorities was a big hassle and time consuming for them, according to industry insiders.
In a recent interview with The Business Standard, George Robertson, general manager of Singapore Airlines, Bangladesh pointed out that the process of taking funds outside the country is very complex and lengthy.
"Airlines are required to submit documents for every ticket to the bank – for repatriation of funds – which is very time-consuming. For foreign airlines, this is a complex operation. As a result, it takes several months to take permission to remit funds to the head office," the general manager of Singapore Airlines stated.
"This is one of the major challenges of working in Bangladesh. India and some other countries have moved more progressively in regulatory changes allowing foreign airlines to operate smoothly," he said.
Repatriation of funds from other countries is simpler for international airlines.
He said in India, foreign airlines do not need to supply documentation for every ticket. Airline companies just pay the relevant tax on all sales.
However, he welcomed the development as an initial step in improving confidence in the operating environment for international airlines in Bangladesh.
Earlier, foreign airlines had to collect so many documents including tickets for each passenger and copies of passports, which made them reluctant to operate in Bangladesh, said A Sattar Siddiqui, marketing manager at the Dhaka office of Turkish Airlines.
He said the ease of documentation submission procedure will make it comfortable for foreign airlines to do business in the country.