Businesses shed light on policy alignment

Business leaders have called for urgent measures to ensure transparent and coordinated policies and collaborative efforts to position Bangladesh as a regional business hub.

They highlighted the need for stronger coordination between private and public sectors to address existing challenges and seize emerging opportunities, particularly in key sectors like technology, manufacturing and infrastructure.

Local and foreign business leaders made the call at a dialogue styled 'Policy Alignment to Enhance the Trade and Investment Climate' hosted by the American Chamber of Commerce in Bangladesh (AmCham) at a city hotel on Sunday.

They also pointed to critical issues requiring immediate attention, including payment and compliance challenges between the government and stakeholders, improvements in investment policies, ensuring favourable returns on investment, reforming turnover taxes, simplifying tax redemption at source, addressing the needs of the recycling industry, and creating a more competitive tax environment compared to virgin material imports.

In his opening remarks, finance adviser Dr Salehuddin Ahmed highlighted his government's commitment to fostering an environment conducive to foreign direct investment.

He underscored the importance of aligning policies across sectors to simplify processes and attract international investors, creating a more predictable business environment.

Dr Salehuddin acknowledged the challenges faced by the interim government but noted that stability had been achieved in some areas.

"However, the government has adopted a contractionary monetary policy to combat inflation. Unfortunately, this has caused difficulties for banks and the private sector, making it harder for businesses to operate."

The adviser condemned the act of money laundering, stating that a segment of large business groups had taken significant amounts of money out of the country, depleting banks and weakening the financial system.

He also advised the private sector to improve internal governance, enhance competitiveness, and increase productivity, warning that failing to do so would exacerbate the challenges.

He cited Beximco Group as an example, noting that it is struggling to pay its employees, saying that his ministry has allocated Tk 52 billion for salaries over the past five months.

Regarding VAT, the adviser said the issue was under review, and a decision would be made in the coming weeks.

On the stock market, he noted concerns about the prevalence of trading in shares of Z-class companies, pointing out that some factories even had cows and goats roaming within, yet their stock prices were high.

National Board of Revenue (NBR) chairman Md Abdur Rahman Khan highlighted ongoing reforms to improve the ease of doing business.

He advocated a shift from customs revenue to more sustainable taxation systems such as income taxes and VAT to promote economic growth.

Mr Khan also emphasised that custom houses do not act as revenue-generating entities for the government but do serve as enablers of business.

Syed Nasim Manzur, managing director of Apex Footwear Ltd, said, "Despite having the highest customs duties in the world, Bangladesh's trade-to-GDP ratio is lower than all other South Asian countries."

He attributed this disparity to the high customs duty system.

Mr Nasim proposed several solutions to improve the situation, including shifting the NBR's focus from solely tax collection to increasing investment and employment.

He recommended reducing bank loan interest rate to single digit, providing duty-free facilities for the import of raw materials across all sectors, and expanding beyond the bonded warehouse license system.

Mr Nasim also called for measures to improve Bangladesh's competitiveness by benchmarking against countries like Vietnam, Indonesia, and India, suggesting tax exemptions to enhance efficiency and adopting modern practices instead of relying on the traditional LC system.

Centre for Policy Dialogue executive director Dr Fahmida Khatun presented a keynote, stressing the need to revise policies, simplify taxes, ensure exchange rate stability and enhance infrastructure to prepare for Bangladesh's graduation from LDC status.

Ala Uddin Ahmad, director of the Foreign Investors' Chamber of Commerce and Industry, and CEO of MetLife Bangladesh, highlighted opportunities for Bangladesh in the evolving global trade landscape.

He called for equitable treatment of existing foreign investors, suggesting that satisfied investors act as ambassadors for Bangladesh's investment potential.

Sabbir Ahmed, country manager for Bangladesh, Nepal, and Bhutan at VISA Worldwide Singapore Pte Ltd, Muhammad Imrul Kabir, corporate affairs director at Chevron Bangladesh, also spoke.

AmCham vice-president Eric M Walker, who is also the president of Chevron Bangladesh, summarised the event's objectives by emphasising the need to improve Bangladesh's business environment, infrastructure, and policies to enhance trade competitiveness and align with global sustainability trends.

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