The costs of opening up a single super store in Bangladesh are at least four times as much as those of neighbouring countries, according to an analysis.
Businesses have to spend as high as Tk 45 million for opening up a 4,000 square feet super store.
The opening of similar-size super stores in Sri Lanka and Indonesia costs Tk 11 million.
The Bangladesh Super Market Owners Association (BSOA) prepared the analysis to present it to the chairman of the National Board of Revenue (NBR).
In a presentation, the association members identified three major challenges for the super store business in Bangladesh.
The challenges include, opening up a new mall and its forced shut down, uneven VAT scenario in the market, and harassment in the name of food safety.
In a letter, BOSA president and managing director of Rahimafrooz Superstores Limited Niaz Rahim said trade VAT at a rate of 4.0 per cent is discriminatory as it is applicable only to super store businesses.
"The annual sale of super stores has slipped by 15 per cent in the last six months. Common people are being discouraged to buy things from super shops due to uneven VAT situation," he said.
Already, consumers' right protection directorate also warned the super stores that charging VAT on MRP (maximum retail price) is a violation of consumers' right protection act, he added.
During fiscal year 2006-09, the rate of VAT for super stores was up to 2.0 per cent.
The government revised the rate upward to 4.0 per cent during FY 2012-14.
During FY 2014-15, the VAT rate was brought down to 2.0 per cent before raising it to 4.4 per cent during FY 2015-16.
The association president demanded either reduction of VAT to 2.0 per cent or imposition of 1.0 per cent VAT on all retail businesses to address such discrimination.
In the analysis, it gave a comparison of uneven VAT scenario between the super market and four small groceries.
The amount of payable VAT is Tk 56,000 in a month for four small stores.
This compared with Tk 1.2 million for a single super market.
On the anti-adulteration campaign, the association said different government agencies conduct food safety or formalin-free drive movement in the super markets causing unusual harassments.
Such drives in other countries are conducted by a particular agency of that country.
The US Food and Drug Administration (FDA), Food Standards Agency (FSA), Food safety and Standards Authority of India (FSSAI) in India conduct such drives and set policy for the businesses.
In 1999, the government gave approval for opening up super market in Bangladesh. The first super market was PQS, which was acquired by Agora.
According to the BSOA, some 160 super markets are running their operations all over the country.
Of the stores, some six outlets of Agora, out of 10, are incurring losses.
Meena Bazar is also experiencing losses in 16 of its 18 stores.
Nandan has only one store active out of four.
Shawpno is operating 47 stores, the highest of its rivals.
Out of these outlets, a total of 35 are in the red.
Talking to the FE, BSOA general-secretary Md Zakir Hossain said there is a need for a policy for salvaging the country's superstore business.
"We are incurring losses and facing uneven competition for discriminatory fiscal policy," he said.
The government should pay due attention to develop the sector, he added.
doulot_akter@yahoo.com
Costs of opening outlets in BD among highest in the region
Superstore business
Doulot Akter Mala | Published: July 21, 2018 22:55:30
Costs of opening outlets in BD among highest in the region
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