Finance Minister AHM Mustafa Kamal assured Japanese contractors and investors of resolving the complications over tax and value added tax (VAT) at a meeting on Saturday.
He said, "Japanese firms are facing some problems over tax and VAT related issues. There is no legal obstacle involved, so we can solve them by discussions with the National Board of Revenue (NBR). We will also make sure that these problems do not arise again in the future."
The finance minister made the comment at a meeting with the Japanese delegation led by the Japanese Ambassador to Bangladesh Naoki Ito. Officials from a number of Japanese contractor firms and Japanese companies were present at the meeting.
NBR Chairman Mosharraf Hossain Bhuiya, Secretary of Economic Relations Division Monowar Ahmed, Finance Division Secretary Abdur Rouf and Senior Secretary of Financial Institutions Division Ashadul Islam also attended the meeting.
At the meeting, the Japanese delegation requested exemption from all taxes on the contractor and subcontractor firms.
They said there was double taxation because they were collected from the main contractors and the subcontractors separately.
They also complained that the Japanese companies had to pay taxes twice because of the 'Advanced Tax' system.
The Japanese firms also requested a facility to import duty-free cars for the projects financed by them.
The Japanese representatives said that in many ongoing projects, the tax on contractors was increased even after the agreements were signed. So, they cannot coordinate the expenditure in these projects. They proposed that the tax should be maintained at the level it was when the agreement was signed.
The Japanese investors also requested the government for exemption from the rule of getting bond licenses for their companies in the export processing zone.
The Japanese garments makers who are interested setting up factories in Bangladesh also requested to be treated like Bangladeshi companies for paying taxes.
The Japanese Ambassador said, "Japanese firms want to continue helping Bangladesh to achieve growth in economy, trade, and investment. Japanese investors will do everything that is needed for Bangladesh's development."
Finance Minister Mustafa Kamal said, "Big Japanese companies like Nittsu, JETRO, Nippon Steel, Sumitomo, Tekken, Honda, and Sojitz Corporation will make huge investments in Bangladesh to help the country sustain its growth."
"These companies have already started making small investments in the export processing zones. The Japanese investors have assured Bangladesh of making large investments in coming days."
AHM Mustafa Kamal also said that representatives of the two countries will meet to determine the amount of investment to be made in Bangladesh.
A project to set up the 'Japan Economic Zone' is underway in the Araihajar upazila of Narayanganj. The Bangladesh Economic Zone Authority has already acquired 500 acres of land for the project, and the process to acquire 500 acres more is in the last phase.