Not tax holiday, administrative bottlenecks are hindering CNG business
Saturday, 15 March 2008
A report published in the FE in its issue on March 12 last stated that the National Board of Revenue (NBR) is actively thinking of offering tax holiday facility for a period of eight years to CNG filling and conversion stations to encourage investment in the sector. The proposal was placed by Bangladesh CNG Association. I like to differ with the proposal. Tax holiday will not increase the number of the required CNG filling and conversion stations. Indeed, the current business of CNG filling and conversion station is lucrative and profitable. Many entrepreneurs in the country are willing to set up and operate stations. But mainly trouble-some and time-consuming administrative approvals and obtaining no-objections from eight or nine government authorities are the main causes for such delays in setting up of stations. It is ridiculous that the cabinet of the government recently made a decision that more fifty CNG filling and conversion stations would be set up in Bangladesh. Bangladesh is pursuing a market-oriented, free economic policy. The number of CNG filling stations and conversion centres will be determined by the economic force of demand and supply. No authority should determine as to how many stations will be set up.
However, the government should withdraw the administrative barriers in order to encourage the setting up of CNG filling and conversion stations. Only Rupantarita Prakitic Gas Co. Ltd. and Explosive Department of the government may be given the controlling authority to approve and monitor the operations relating to CNG filling and conversions. The controlling authority of all other government agencies needs to be withdrawn immediately. If such steps are taken, the setting up, and operation, of new stations will rapidly increase in the country. Bangladesh will be able to reduce the pressure on costly imported fuel oil.
In this context, tax holiday will only increase the net profit of the existing station owners but it will not lead to any significant increase in the number of stations. There are a good number of interested businessmen in the country who are desirous of setting and operating CNG filling and conversion stations. For their plans to materialise, the government only requires to simplify its procedures.
The government should remove the administrative bottlenecks and encourage actively the setting up of new CNG filling and conversion stations where natural fuel gas is available.
Md Ashraf Hossain
8, Panthapath
Dhaka-1215
However, the government should withdraw the administrative barriers in order to encourage the setting up of CNG filling and conversion stations. Only Rupantarita Prakitic Gas Co. Ltd. and Explosive Department of the government may be given the controlling authority to approve and monitor the operations relating to CNG filling and conversions. The controlling authority of all other government agencies needs to be withdrawn immediately. If such steps are taken, the setting up, and operation, of new stations will rapidly increase in the country. Bangladesh will be able to reduce the pressure on costly imported fuel oil.
In this context, tax holiday will only increase the net profit of the existing station owners but it will not lead to any significant increase in the number of stations. There are a good number of interested businessmen in the country who are desirous of setting and operating CNG filling and conversion stations. For their plans to materialise, the government only requires to simplify its procedures.
The government should remove the administrative bottlenecks and encourage actively the setting up of new CNG filling and conversion stations where natural fuel gas is available.
Md Ashraf Hossain
8, Panthapath
Dhaka-1215