Businesses want end of harassment, NBR for realistic declaration

Business leaders have called for a streamlined business landscape with relaxed tax structures and efficient processes free from harassment to boost investment.

New investment and employment will inevitably shrink when businesses are harassed by the tax authority, they argued at a workshop "Building a Resilient Economy for Vision 2041: Key Challenges and Way Forward," organised by the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at its Motijheel office yesterday.

In response, government policymakers and revenue officials present at the workshop said if traders stopped making false declarations, they would not face any fines or their goods would not be held by customs.

The government is working on simplifying the tax structures as much as possible and implementing policies to improve the ease of doing business and attract investment, they said.

Simplify tax structures for streamlining operations and unlock access to secured long-term credit facilities for businesses, ultimately fueling growth.

FBCCI President Mahbubul Alam

The workshop started a vital dialogue between business leaders and government officials, tackling pressing issues and laying the way for collaborative solutions.

Ahmed Kaykaus, alternate executive director of the World Bank in Washington, attended the workshop as chief guest while Senior Secretary of the Commerce Ministry Tapan Kanti Ghosh and National Board of Revenue (NBR) member (Customs) Masud Sadiq were special guests at the event.

Simplify tax system, provide long-term loans: Businesses

Addressing the workshop, FBCCI President Mahbubul Alam said building a Smart Bangladesh demands a better functioning trade sector, achievable through a higher tax-to-GDP ratio, diversified exports, and increased foreign investment. 

He called on the authorities to "simplify tax structures for streamlining operations and unlock access to secured long-term credit facilities for businesses, ultimately fueling growth." 

BKMEA Executive President Mohammad Hatem said the tax system is neither business nor investment-friendly. There is no scope for advance income tax (AIT) refund or adjustment, which causes the actual tax to go up from 100% to 300% sometimes. 

Importers and exporters are facing a number of issues. Treating every trader with suspicion holds up progress, he said.

"Exporters' goods are being held by customs for 10-15 days. For this, traders have to pay thousands of crores of taka. Exports to Malaysia, the Philippines, and the Middle East are on the verge of closing down due to complicated customs procedures," Hatem added.

HSBC Bangladesh CEO Mahbubur Rahman said, "The supply chain is being disrupted as we cannot import raw materials. The trade deficit narrowed, as imports fell. Twenty-five billion dollars in remittances coming through formal channels and another $25 billion is said to be coming in informal ways. This increases the demand in the market. Hence, initiatives should be taken to increase supply to meet this demand."

"Agro-processing is absolutely crucial in navigating the post-LDC transition challenges and small and medium entrepreneurs should be incentivised to develop this sector," said Talha Islam Bari, senior vice president of Dhaka Chamber of Commerce and Industry (DCCI).

FBCCI Director Priti Chakraborty said special importance should be given to the health sector. "Health insurance must be ensured and an independent financial policy is required for that."

Policy Research Institute (PRI) Chairman Dr Zaidi Sattar said the ambitious goal of transforming the country into a developed nation by 2040 hinges on sustained high GDP growth of 8-9% for the next two decades, which is achievable through a dynamic and diversified foreign trade sector.

Bangladesh Bank Director Shahriar Siddiqui said the central bank is working to establish good governance in banks by reviewing the roles and responsibilities of boards and management. Work to set up asset management companies is underway to manage defaulted loans.

If the traders declare the correct price for their products, then minimum value is not necessary. The proper declaration is required to avoid a penalty.

NBR member Masud Sadiq

Authorities pledge necessary support to businesses

Chief guest Ahmed Kaykaus said the country is not far away from achieving the goals of 2041. "This is the time to regain our confidence and proceed with optimism."

He told businessmen, "Find out the opportunities and problems. The government will help you cope with the problems and utilise the opportunities."

Besides, businessmen also have a responsibility for social development aside from just doing business or making profits, he said.

"By focusing on internal development and addressing our own challenges, we can chart our own course," Ahmed Kaykaus added.

Tapan Kanti Ghosh, senior secretary of the Ministry of Commerce, said, "Bangladesh is an import-dependent country when it comes to certain food items such as edible oil, sugar, and wheat. We have to increase the production of these items with good agricultural practices." 

"Our products cannot compete in the global market. We need advanced training to make competitive products. Importance should be given to education to produce skilled human resources," said the commerce secretary.

NBR member Masud Sadiq said that it is true that the customs tax structure needs to be further rationalised. The NBR fixes the tariff structure with input from all parties. But it is not possible to keep all of their suggestions.

"There is also pressure on NBR to increase revenue collection. Twenty percent more revenue is to be collected by customs next year. Tariff rates should be reduced for FTA signing. However, the NBR cannot reduce tariffs drastically. We have to do it step by step," he said.

"There will be no minimum value or tariff value in the next two years. Currently, 128 products have a minimum value. These will be lifted in future," Masud said.

"If the traders declare the correct price for their products, then minimum value is not necessary. The proper declaration is required to avoid a penalty," the NBR member added. 

Regarding harassment, Masud Sadiq said, "Not all NBR employees are good and maintain ethical standards. Many have been brought under punishment for misdeeds. Hopefully, this situation will improve in the future."

Presenting the keynote, Masrur Reaz, chairman of Policy Exchange Bangladesh, said after the election, the new government will get an opportunity to shape the economic policy. There is an opportunity to plan policies in line with the current context and for long-term prospects. The government should keep in mind that proper policy will accelerate private sector growth.

Regarding the issues in the financial sector, Bangladesh Bank Director Shahriar Siddiqui said the central bank is working to establish good governance in banks by reviewing the roles and responsibilities of boards and management. Work to set up asset management companies is underway to manage defaulted loans.