The Federation of the Bangladesh Chambers of Commerce and Industries (FBCCI), on Sunday, sought the rationalisation of value-added tax (VAT) and taxes alongside proper implementation of the government-declared stimulus packages for the sake of economic recovery.
In its webinar titled "Bangladesh's Covid-19 stimuluses, economic sustainability, recovery, domestic investment, foreign direct investment (FDI) and overseas FDI," the apex body of Bangladeshi businesses also highlighted foreign investment, saying that post-Covid-19 recovery would also depend on FDI inflow.
FBCCI President Sheikh Fazle Fahim presided over the online discussion, which was attended by: industry leaders, economists, representatives of international development partners, and top government representatives.
Leaders of the federation said funds from the stimulus packages intended to support pandemic-hit businesses have still not been disbursed properly. The response from banks – the implementer of the concessional lending schemes – is still inadequate, despite specific orders and guidelines.
Former Bangladesh Bank governor Dr Shalehuddin Ahmed said the banking sector was in trouble before the pandemic and without resolving those issues, proper implementation of the stimulus packages will be difficult.
Alongside the credit-dependent support, the government should focus on fiscal support to the businesses and people, he said, supporting the FBCCI call for a reduction of corporate tax, rationalising VAT, and offering industries a relief from the burden of advance taxes.
Kazi Farid Uddin, former member of the National Board of Revenue (NBR), said decades-long experience across countries suggests that reducing the tax burden does not hit government revenue, instead it increases revenue collection.
Dr Salehuddin suggested providing mid-term fiscal support alongside short-term support in the upcoming national budget.
FBCCI leaders and economists emphasised the importance of additional FDI inflow for a stronger recovery of the economy, although the world is estimated to observe a 30-40 percent slump in global FDI flow this year.
"To attract FDI, mainly from investors relocating from China, Bangladesh must focus on easing policies, streamlining processes and improving infrastructure," said Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue.
Dr Salehuddin expressed his frustration over not seeing the Bangladesh Investment Development Authority (BIDA) significantly marching ahead from where its predecessor, the Board of Investment, had been.
BIDA Executive Chairman Md Sirazul Islam said that the authority is more a facilitator than a decision-maker and it needs more power to deliver better.
Salman Fazlur Rahman, private sector industry and investment adviser to the prime minister, expressed his hope that most of the recent initiatives would take Bangladesh further ahead in the World Bank's Ease of Doing Business index in the coming days.
He labelled the foreign exchange control and the tax regime as adverse to businesses and said those need reforms.
"For sustainable recovery, and growth later, Bangladesh must address equality, gender equity and labour rights," said Mia Seppo, the United Nations resident coordinator in Bangladesh.
Speaking at the webinar, former FBCCI president Abdul Matlub Ahmed recommended strong support for local industries alongside export-oriented sectors.
"Agriculture is a real success story for Bangladesh and it has done very well even during the pandemic," said Salman F Rahman.
Agriculture Minister Dr Abdur Razzak demanded fast-tracking the implementation of agricultural projects.
Former FBCCI President Shafiul Islam Mohiuddin expressed his confidence in the resilience of the apparel sector, saying government support and entrepreneurs' efforts have previously proven that. He also recommended more support for agriculture and returning migrant workers.
Foreign Minister Dr AK Abdul Momen emphasised the importance of looking at new emerging opportunities in the post-pandemic world.
Industries Minister Nurul Majid Humayun, the country heads of the World Bank and the Asian Development Bank, as well as some prominent economists and business leaders also spoke at the webinar.