Around 57 per cent of surveyed entrepreneurs identified existing tax structure as the key barrier to comply with relevant laws in the country, a recent study has revealed.
Moreover, 54 per cent of the survey participants said the procedure to renew trade license is good and 51 per cent identified paying additional expense for such document as major setbacks in doing business.
These findings were revealed at a seminar titled 'Informal SMEs in Bangladesh: Formalization Challenges and Way Forward' at the Parjatan Bhaban in Agargaon.
The Small and Medium Enterprise Foundation (SMEF) and German development agency Friedrich-Ebert-Stiftung (FES) Bangladesh jointly organised the seminar in a bid to promote the country's informal SMEs, according to a statement.
Some 44 per cent of entrepreneurs say that the complexity of government laws and regulations is one of the main obstacles to doing business in compliance with the law.
Dr. Melita Mehjabeen, a professor at the University of Dhaka, presented the findings in a keynote presentation at the seminar.
Ministry of Industries (MoI) Adviser Adilur Rahman Khan attended the seminar as the Chief Guest the MoI Senior Secretary Zakia Sultana was present as the special guest while the SMEF Managing Director Anwar Hossain Chowdhury presided over the event.
Resident Representative of FES Bangladesh, Dr. Felix Gerdes, Program Head of ILO Bangladesh Gunjan Dallakoti and SMEF General Manager Nazeem Hassan Satter spoke on the occasion among others.
This research was conducted among 304 entrepreneurs from Dhaka, Chittagong, Sylhet, Khulna and Rajshahi.
More than 74 per cent of the country's SME entrepreneurs intend to run their business in accordance with the government's laws and regulations, according to the keynote presentation.
To facilitate this, the government's rules and regulations need to be simplified. Besides, one-stop service and collateral-free loans should be introduced.
The entrepreneurs said that Indian entrepreneurs are to obtain only seven licenses from respective government departments to run their businesses whereas, an entrepreneur in Bangladesh needs at least 34 licenses.
Citing a 2013 survey of the Bangladesh Bureau of Statistics (BBS), the keynote also said there are more than 7.8 million CMSME enterprises in the country those have generated employments for nearly 25 million people. However, most of these enterprises are informal or outside the government's laws and regulations and tax framework.
In this context, experts have recommended the government to prepare a comprehensive strategy paper to bring these enterprises under the law and regulations and tax framework and formalise them step by step.
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