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'Country needs roadmap to cut corporate tax to bag more FDI'

SCB BD chief also suggests expanding tax net

FE Report | April 23, 2018 00:00:00

Bangladesh needs to develop a roadmap for rationalising its corporate tax rates, if the country wants to attract more foreign direct investment (FDI), a top official of the global financial giant Standard Chartered Bank (SCB) has said.

"Corporate tax rates in Bangladesh, at this point, are a bit higher," said Chief Executive Officer (CEO) of SCB Bangladesh Naser Ezaz Bijoy at a media briefing in the capital on Sunday.

"While, I do not expect this to change overnight, I would like to see a roadmap for rationalisation of tax rates over the time," he said when asked whether the existing tax structure is a hindrance for bringing in more FDI to the country.

The country head of the multinational bank, having a presence of hundred years in the region, also opined that the country needs to increase tax flow, as it is looking to enhance tax-GDP ratio.

"In that case, my suggestion is that the government should expand its tax net rather than imposing more tax on the existing taxpayers."

Mr Bijoy's views come at a time when there are growing calls for decreasing the corporate tax rates in Bangladesh.

Finance Minister A M A Muhith and National Board of Revenue (NBR) Chairman Md. Mosharraf Hossain Bhuiyan have already indicated that the government would like to rationalise the existing corporate tax rates in the upcoming national budget.

Welcoming such initiative, the SCB CEO observed that the government also needs to plug the loopholes, used by different entities for tax evasion.

Focusing on the Belt and Road Initiative (BRI), espoused by China in the recent years, the SCB high officials present at the event observed that their bank is best placed to support this mega plan throughout the globe.

"If you look at around 60 countries which are part of BRI, Standard Chartered is present in almost 70 percent of those countries," the SCB Bangladesh CEO said.

"We are present in China for more than 160 years. In Bangladesh, we are the largest foreign commercial bank as well as the oldest bank still in operation."

"We have a large variety of product suits in Bangladesh. We have financed 20 percent of the country's power generation schemes. The aircrafts purchased by the country's national flag carrier were also financed by us," he added.

"Since, we have been in these countries for long, we have deep understanding of the laws and regulations, which is very helpful for business matchmaking," said Sebastian Er, Executive Director of Belt and Road Strategy Execution Team of Standard Chartered.

The SCB officials also informed that they have already been involved in financing three major projects in Bangladesh that come under BRI. The total amount of those financings was around US$ 350 million.

"We also have a dedicated China desk in SCB, equipped with a Chinese-speaking personnel who can assist the Chinese investors with information regarding investment in Bangladesh," said Enamul Huque, Country Head of Global Banking of SCB Bangladesh.

"Through BRI, we are witnessing an enhancement in policy connectivity among the governments, while trade, investment cooperation and infrastructure connectivity is also getting a boost," said Jean Lu, Head of Global Banking of SCB China.

"During the first wave of BRI investment globally, we witnessed increased investment from Chinese companies in energy use, raw materials and mining. There is also a second wave, where we see Chinese companies coming out to invest in infrastructure in various countries."

"Meanwhile, there is also a third wave of investment through BRI, where we would see more Chinese investment in areas like healthcare or hi-tech," he added.

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