Dhaka Chamber of Commerce & Industry (DCCI) President Taskeen Ahmed speaks at a focus group discussion on 'Implementation of IFRS for SMEs' held at the DCCI on Saturday. Dr Mohammad Abu Yusuf, Chairman (Acting), Financial Reporting Council, and Md Amir Uddin, Executive Director, Bangladesh Bank, also spoke, among others. Dhaka Chamber of Commerce and Industry (DCCI) president Taskeen Ahmed said on Saturday that the adoption of 'International Financial Reporting Standard (IFRS)' could help small and medium enterprises (SMEs) gain easy access to finance, investment and capacity development.
Mentioning SMEs as a lifeline for Bangladesh's economy that are contributing over 25 per cent to the country's GDP, he said the adoption of IFRS for SMEs provides a structured framework that enhances financial transparency.
Mr Ahmed made the observations at a focus group discussion on "Implementation of IFRS for SMEs" held at the trade body's Motijheel office in the capital.
He also said that IFRS will significantly impact tax revenue collection by improving compliance, minimising tax evasion and bringing more businesses into tax net.
The DCCI president also termed that limited financial capacity, shortages of skilled manpower and compliance cost creates barrier to adopting IFRS for SMEs.
He, however, stressed the need for investment in training and regulatory alignment.
Dr Mohammad Abu Yusuf, chairman (acting) of the Financial Reporting Council, said IFRS is very important for SMEs to comply with the international standards, but its implementation is still challenging for SMEs due to lack of knowledge, skilled workforce, easy procedures and awareness.
He opined that there is no alternative to enhancing the capacity of SMEs to make them interested in implementing IFRS.
Dr Yusuf said that SMEs need to be more focused on IFRS implementation to increase tax compliance, access to capital from the capital market and signing international trade agreements.
Md Amir Uddin, executive director at Bangladesh Bank, said that the implementation of IFRS should be focused on improving the image of local SME entrepreneurs in global arena, but it is necessary to provide training to improve their skills.
Nawshad Mustafa, director, SME and Special Programmes Department of Bangladesh Bank, said, "We have lack of trained and skilled accounting professionals in the country, especially for SMEs."
He said that an enabling environment is necessary to implement IFRS in a practical manner.
"The IFRS is implemented in 80 countries in the world and it is also required for us to implement but that should be without affecting the business activities of our SME sector."
He stressed the need for a friendly environment for its implementation.
Mohammad Jahangir Hossain, general manager at the SME Foundation, said that from the SME Foundation accounting software was provided to few SME entrepreneurs, but it was not implemented in many cases due to lack of skills and interest.
He then proposed sector-based customised accounting software for SME sector to make it easy.
He emphasised providing facilitation and training for further implementation of IFRS.
Sk. Md Tarikul Islam, FCA Partner, Hoda Vasi Chowdhury and Co. Chartered Accountants, presented the keynote paper.
He said that capacity building training for accountants and auditors and initial transition costs are some of the challenges for implementation of IFRS.
He said that regulatory bodies, professional organisations and financial institutions could play a vital role in facilitating a smooth transition.
He also highlighted key benefits of IFRS for SMEs such as simplified reporting, cost-effective compliance, enhanced credibility and facilitating growth.
He, however, urged for easy access to finance, lower tax and value added tax (VAT) rate, reduced tax rate for green business, tax incentive for SME startups and simplification of tax-paying process for the SME sector.
DCCI Convener Lutful Hadee said that there are about 2,200 chartered accountants in the country -about 600 of them are in practice.
He said that about 40,000 part-qualified accounting professionals are also in the market after completing various pertinent courses.
"Still we need more trained accounting professional in the country to cope up with the growing demand."
DCCI joint convener Md Shafiqul Alam, FCA, urged uniformity in the definition of SME in different policies and regulations of different institutions.
DCCI senior vice-president Razeev H Chowdhury and vice-president Md Salem Sulaiman were also present.
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