The government has hiked the cash incentive on remittance sent by expatriate Bangladeshis to 2.5% from the existing 2%.

In a notification, the Finance Ministry said that the new rate of cash bonus will take effect from Saturday (January 1).

The move came to improve the overall living standards of the people, increase foreign exchange reserves, prevent money laundering, create employment and ensure remittance sent by expatriates can be used for the development of Bangladesh, it said.

It’s a “New Year’s gift from the prime minister to expatriates”, reads the notification.

It said the government first decided to provide 2% cash incentives against sending remittance in the FY20 which resulted in a healthy inward remittance amount of $18.20 billion which was 13% higher than the previous fiscal year.

In continuation of this, the inward remittance amount was $24.80 billion in the last fiscal year (FY21) which was also 36% higher than the previous fiscal year (FY20).

Bangladesh Bank first started the groundwork for a 2% cash incentive for expatriates over remittance inflow in 2019.

Speaking to the media at an event it Dhaka, Finance Minister AHM Mustafa Kamal said he hoped that the $26 billion remittance goal will be met within FY2022-23.

“The government’s move to introduce incentives on remittance 20 has worked wonders.

“We are trying to bring it (remittance inflow) to the legal channel. We will discourage informal (illegal) channels. That is why the incentive has been increased,” he said.

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