[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Investment promotion ecosystem struggles

The fragmented structure of investment promotion ecosystem in Bangladesh and poor coordination among investment promotion agencies, regulatory bodies and service providers, outdated laws, weak...

www.newagebd.net

Investment promotion ecosystem struggles
Taufiq Hossain Mobin 07 December, 2024, 23:06

The fragmented structure of investment promotion ecosystem in Bangladesh and poor coordination among investment promotion agencies, regulatory bodies and service providers, outdated laws, weak enforcement of intellectual property rights and a number of other issues were major barriers to attracting investments in Bangladesh.

The observation was made in the white paper on the state of Bangladesh economy submitted to chief adviser Muhammad Yunus on December 1.

Although the Bangladesh Investment Development Authority was established as the central agency to support investments, its effectiveness was hampered due to insufficient collaboration with other IPAs, regulatory institutions and service providers, the paper said.

BIDA’s regional offices also faced infrastructural challenges that hindered the full implementation of its one stop service platform, aimed at streamlining investment procedures.

Policy inconsistencies and procedural delays further deterred foreign investments. For instance, the paper said, discrepancies between BIDA’s work permit guidelines and the residency definition under the Income Tax Act 2023 created confusion among investors.

Additionally, the work permit approval process could take up to 12 months, frustrating investors. The report recommended integrating visa and work permit procedures, similar to practices in India and Thailand, to improve efficiency.

The paper noted that automation efforts in Bangladesh were also incomplete. Initiatives like the VAT online and income tax automation projects still require dual submissions for approvals and registrations, undermining their effectiveness.

‘Furthermore, the monitoring and evaluation system remains weak, as BIDA depends on estimated data from its investor relationship management system, which is not systematically utilised,’ it said.

The legislative framework also complicated the investment landscape. Outdated laws such as the Foreign Private Investment Promotion and Protection Act 1989 and the Transfer of Property Act 1882 posed challenges, while the Bangladesh Flag Vessels (Protection) Act 2019 created logistical bottlenecks by mandating 50 per cent of goods be transported via Bangladeshi vessels, despite the limited capacity of national shipping lines.

In the pharmaceutical sector, reliance on imported active pharmaceutical ingredients and new regulatory requirements under the Drugs and Cosmetics Act 2023 created operational hurdles.

Weak enforcement of intellectual property rights further exposed investors to risks.

The report urged the government to strengthen IPR protection and train enforcement agencies like customs and police to improve investor confidence.

The absence of a centralised master OSS, originally intended to integrate services from agencies such as the Bangladesh Export Processing Zone, the Bangladesh Economic Zone Authority and the Hi-Tech Park Authority, has led to data inaccuracies and coordination issues.

Moreover, duplications in registration processes across multiple agencies could be resolved by introducing a unique investor identification system, the paper suggested.

The report also pointed out that BIDA’s registration system included numerous small-scale projects with investments below Tk 15 crore, raising questions about their necessity for BIDA registration when a trade licence could suffice.

It called for streamlining processes and reducing the excessive number of regulatory approvals required, which currently stands at 150 across 23 government agencies.​

 

[Saif]

What is the actual amount of FDI in Bangladesh?

The inflow of foreign direct investment (FDI) in the last fiscal year declined further, which was predictable. After recording a big jump three years back, the country witnessed a decline in FDI for two consecutive years. Macroeconomic instability coupled with political uncertainty discouraged fore

thefinancialexpress.com.bd

What is the actual amount of FDI in Bangladesh?
Asjadul Kibria
Published :
Dec 08, 2024 00:42
Updated :
Dec 08, 2024 00:42

The inflow of foreign direct investment (FDI) in the last fiscal year declined further, which was predictable. After recording a big jump three years back, the country witnessed a decline in FDI for two consecutive years. Macroeconomic instability coupled with political uncertainty discouraged foreign investors from injecting fresh capital. Existing multinational entities (MNEs) also repatriated more instead of reinvesting. Thus, FDI in FY24 declined by 8.80 per cent, after a fall of 6.50 per cent in FY23.

The latest statistics on FDI, released by Bangladesh Bank last week, also gave rise to a few queries about the overall FDI situation in the country. The most important question is whether the statistics provided by the central bank regarding FDI represent the actual scenario. The half-yearly report titled 'Foreign Direct Investment and External Debt January-June, 2024', prepared and published by the statistics department of Bangladesh Bank, showed that the country received US$1.47 billion as net FDI in FY24 which was $1.61 billion in FY23. A year back, the January-June 2023 version of the report, however, showed that the net inflow of FDI in FY23 stood at $3.25 billion.

Therefore, it is crucial to seek clarification when comparing the latest reports on FDI with the previous versions. The latest report presents a significantly different picture, with FDI data revised downward. The central bank publication simply stated: "Data has been revised as per BPM6 Guideline from 2019 and onwards." However, this explanation lacks the necessary depth and transparency, leaving room for misinterpretation. The report mentioned that the Bangladesh Bank has been conducting an enterprise survey since 1995 to collect detailed information on FDI in the country, and FDI data are compiled and published on a quarterly basis on the central bank's website. But more transparency is needed in this process.

Application of the guidelines and methods of BPM6 led to revising the FDI data downward significantly. An explanatory note should be there to avoid misunderstanding and misinterpreting the data. By not doing so, the central bank has continued the old practice of data concealment as was the case during the previous regime.

The Sixth Edition of the Balance of Payments and International Investment Position Manual (BPM6) was introduced in 2009 by the International Monetary Fund (IMF). The international guideline is designed to calculate and compile the balance of payments and foreign investment statistics. Bangladesh Bank has started to follow the BPM6 since 2013 to calculate and prepare the country's balance of payments gradually. In this process, the statistics of FDI are also being estimated in line with the BPM6, which is also reflected in the BoP table.

For instance, in FY14, net FDI was recorded at $1.40 billion in the BoP table, in line with the previous method or BPM5. After revision as per BPM6, it reduced to $1.08 billion. Since then, the FDI figures in BoP have been estimated in line with BPM6. At the same time, the half-yearly report of the FDI continued to provide the statistics based on the enterprise survey without adjusting it with the BoP data. Thus, a significant discrepancy between the BoP data and survey data continued. As the figures generated through survey data were higher than BoP data, the government used to demonstrate the survey data on FDI as the country's success story. In this way, manipulation with a key economic indicator provided a distorted picture of the economy to the rest of the world.

The same also happened in terms of foreign exchange reserves, which are a key component of the BoP. Despite starting the use of BPM6 in FY13, central bank fabricated the forex reserve data to inflate the amount. Intervention from IMF finally compelled Bangladesh Bank to release both the gross and net reserve as the latter matches the BPM6 guideline.

Interestingly, the gross inflows of FDI are also reported in the BoP table since FY15. The estimation of gross FDI also started to appear simultaneously in the survey-based half-yearly report. Gross inflows are the total inward direct investment made by non-resident investors in the country. Net inflows are derived by deducting disinvestment from gross inflows. Disinvestment includes capital repatriation, reverse investments, loans given to parent firms and repayments of intra-company loans to parent firms.

However, the latest report did not provide the gross inflows of FDI or the disinvestment figure, which were included in the previous report. This omission in the latest report makes it less comprehensive and may leave the audience feeling that their need for a complete picture of the FDI situation is not being fully considered. Only the figures on gross outflows of FDI and related disinvestments are there, which is not enough for a comprehensive understanding of the FDI situation.

Once again, the downward revision of FDI data in the report after seven years raises the question of data quality. The potential for data manipulation to inflate national incomes during the ousted Hasina regime has already distorted the overall economic development statistics. This manipulation not only distorts the economic reality within the country but also affects the country's economic reputation on the global stage, making it a matter of concern and vigilance for all stakeholders.

The White Paper on the state of the Bangladesh economy, prepared by a group of experts assigned by the interim government, said: ".....the data ecosystem is highly foggy and toxic for the gullible. Just as global warming is the result of human actions, so are the fogs and toxicity in Bangladesh's data results of errors of omission arising from data collection and computation methods and errors of commission by the ruling elites to fit political purposes." The White Paper also pointed out that the balance of payment data, considered relatively free from systematic bias, entered the flux zone with a story changing revision of export data. "Foreign exchange reserve reporting became controversial with the publication of discrepancies in an IMF report in 2020," it added. Now, the adjustment of the survey data on FDI with the BoP data, which was overdue, needs some clarification for the sake to credibility and transparency of FDI and relevant data.​

 

[Saif]

Warnings of recession in Bangladesh

The interim government's Planning Advisor issued a warning of a possible recession in Bangladesh. He singled out the lack of private investment as the major factor that would be contributing to the impending recession (FE, November 26). However, just two weeks before the Advisor's warning on Novemb

thefinancialexpress.com.bd

Warnings of recession in Bangladesh
Muhammad Mahmood
Published :
Dec 08, 2024 00:30
Updated :
Dec 08, 2024 00:30

A bank teller is counting notes at a branch of bank in Dhaka —FE file photo

The interim government's Planning Advisor issued a warning of a possible recession in Bangladesh. He singled out the lack of private investment as the major factor that would be contributing to the impending recession (FE, November 26). However, just two weeks before the Advisor's warning on November 11, the Governor of Bangladesh Bank assured the country that even if economic growth slowed down, there was no threat of recession in the country.

So, the signals for the recession in Bangladesh look mixed. However, since the Advisor gave his opinion at the end of the Executive Committee of the National Economic Council (ECNEC) meeting held on November 25 chaired by the Chief Advisor, it can be considered as the informed view of the government.

He said that if the current situation continued without any new private investment and almost stagnant public sector, development expenditure would result in a recession. He further added that the private sector was not showing any interest in investment and the interest rate had gone up. He also said that economic stagnation in the country was due to inflation and price hikes of essentials.

Numerous economic theories attempt to explain why and how an economy goes into recession. These theories can be broadly categorised as economic, financial, psychological, or a combination of these factors. Economic output, employment, and consumer spending drop in a recession. Interest rates are also likely to decline as central banks cut rates to support the economy and as a result budget deficits go up.

While there is no official definition of a recession, most analysts use the technical definition of two consecutive quarters of decline in a country's real GDP. A recession can also be defined as a sustained period of weak or negative growth in real GDP that is accompanied by a significant rise in the unemployment rate. But for Bangladesh a simpler definition can be applied where a recession is a significant, pervasive, and persistent decline in economic activity.

The Bangladesh economy is currently slowing down. Early in November, the World Bank slashed its growth forecast for Bangladesh by 1.7 percentage points to 4 per cent for the fiscal 2024-25. Recently, Moody's downgraded country's outlook from stable to negative and downgraded the credit rating from B1 to B2 citing the reason that "the negative outlook reflects downside risks to Bangladesh's growth outlook". Overall, currently there is a pessimistic outlook for growth in the country.

Rising inflation can create business and investor uncertainty. Rising inflation can also place upward pressure on interest rates and downward pressure on some asset prices. Inflation not only reduces the level of business investment, but also the efficiency with which productive factors are used.

Also, jacking up interest rates by Bangladesh Bank to fight inflation has become less effective, as reflected in resurging inflation in the country, nor has it helped stabilise the BDT. This is simply because exchange rates impact inflation through their effect on tradable prices.

Let us only focus on the two main determinants of investment-- interest rates and expected returns. Higher interest rates make borrowing more expensive and potentially reduce investment. A change in real interest rates, whether increase or decrease, will directly affect investment. The real rate of return is the nominal return less the inflation rate. The real rate of return, therefore, adjusts profit for the effects of inflation. It is a more accurate measure of investment performance than the nominal rate of return.

Industrial output growth has slowed down in Bangladesh due to stagnant private investment, import restrictions on inputs and higher energy costs. Foreign exchange reserve has declined, further compounding the problem to a point where the country is struggling to pay for fuel and imports. Bangladesh also imposed import restrictions to save foreign exchange.

Bangladesh is not only running a deficit on the current account but in the financial account as well in its balance of payments. If the financial account becomes negative, that creates further pressures on foreign exchange reserve. Consequently, over the past two years the taka lost about 40 per cent of its value against the U.S. dollar. For foreign investors, this exchange rate volatility causes currency risk and creates concerns about the overall economic environment.

Over the last decade or so, the private investment/GDP ratio remained at around 20 per cent. The industrial sector experienced a decline of 3.7 per cent in output growth in 2023-24. The picture is not very different in the services sector. Together these two sectors account for 87 per cent of GDP. In fact, the investment/GDP ratio has been on a declining trend since 2019.

Bangladesh's foreign direct investment (FDI) was on a downward trend for some time. Bangladesh FDI for 2023 was US$1.39 billion, a 15.28 per cent decline from 2022 and FDI for 2022 was US$1.63 billion, a 5.16 per cent decline from 2021. Overall, FDI remains at a very low level at around 2 per cent of GDP.

According to the US Department of State's "2024 Investment Climate Statements: Bangladesh, "corruption remains a serious impediment to investment and economic growth…Corruption is common in public procurement, tax, and customs collection, and among regulatory authorities. Off-the-record payments by firms reduces Bangladesh's GDP by two to three per cent, according to some estimates". The Statement further adds that foreign investors report that Bangladesh's weak and slow legal system, which is widely believed to be corrupt, is an obstacle to investment.

According to a survey conducted by to the Transparency International Bangladesh (TIB), judicial services ranked as the 4th highest corrupt government organ in the country. Between 2009 and April 2024, an estimated TK 1.46 trillion were paid in bribe to access services provided by the government (FE, December 4). Not surprisingly, the survey period coincided with the repressive and criminally syndicated regime of Sheikh Hasina.

According to the Financial Express (November 27) chief executive officers (CEOs) of multinational corporations operating in Bangladesh met the Chief Advisor and asked him to undertake a series of measures to improve the 'ease of doing business' and to make the Bangladesh Investment Development Authority (BIDA) one stop service centre for them. The BIDA is the main authority that promotes and supervises private investment in the country. They also said that improved credit rating was also needed to encourage FDI flows into the country. For that to achieve, a stable and predictable economic environment is needed.

In view of the Planning Advisor signalling the likelihood of a recession, all investors, both domestic and foreign, in Bangladesh also factor in the vulnerabilities associated with a recession such as sustained profit margin compression, credit market stress, energy and financial market shocks. Also, a deeply crisis ridden banking sector, where the central bank has recently injected Tk 225 billion to six cash-strapped banks to meet depositors claims and the ratio of non-performing loan (NPL) is likely to hit 25 per cent in the coming days, notwithstanding additional uncertainties related to the political backdrop adding further to investors woes. The interim government, therefore, through its actions need to reassure investors and creditors that it can guarantee both the political and economic stability conducive to stimulate economic growth.

Bangladesh's private consumption accounted for 66.8 per cent of its nominal GDP in June 2024, compared with a ratio of 68.6 per cent in the previous year. On average across countries, private consumption is the component of GDP that accounts for the largest proportion of the overall changes to GDP. So, weaker private consumption will slow down the economy further. This is also relevant because private consumption is a prime indicator of the economic well-being of households.

But the real interest rate (bank lending rate minus inflation) has been on the decline since 2019 and stood at 0.629 per cent in 2023 against an average of 4.96 per cent between 1976 and 2023. The real interest rate in Bangladesh at 0.63 per cent is very low relative to the world average of 4.25 per cent, based on data from 81 countries. So, this can not be a major factor impeding private investment.

Over the past two years, the taka lost about 40 per cent of its value against the U.S. dollar. Since the end of September, the dollar has again started to appreciate devaluing currencies around the world, including BDT. For foreign investors this exchange rate volatility causes currency risk and creates concerns about the overall economic environment.

Lack of domestic private investments in Bangladesh can be attributed to a variety of factors ranging across infrastructure deficiencies, lack of finance, corruption, macroeconomic imbalances, ineffective enforcement of law, to mention a few. The inflow of foreign direct investment also remains low, mainly due to the poor regulatory framework and business environment as well as widespread corruption and red tape.

So, the slowdown in economic activity is not only for lack of investment but also for a host of other reasons. The state alone cannot stimulate the economy or pick up the slacks of the private sector to maintain the growth momentum. In fact, in view of the economic challenges resulting from the repressive and highly corrupt Hasina's 15-year rule, the present period does not hold out much hope of economic growth.

What is needed now is an industrial policy to build better Bangladesh with a sharp break with the economic policy consensus of the last five decades or so. This will require delinking industrial policy from high levels of bureaucratic and political controls carried out under the pretence of economic nationalism which has only resulted in creating an almost closed economy and helped a deeply corrupt bureaucracy and equally corrupt politicians to benefit from it.

A recently published draft report on the State of Bangladesh Economy revealed the extent of corruption involved in the public sector development expenditures under the Annual Development Programme (ADP) alone over the last 15 years. The report indicated that about 40 per cent of the allocated funds were embezzled by the politicians and public servants. What is more disturbing, US$16 billion on average have been transferred overseas annually during the past 15-year period (FE, December 1&2).

Therefore, industrial policy must also set the transparent parameters on the state's role in the economic realm. Such the necessary fine tuning of industrial policy will not only help woo private investment including FDI but will also help the country accelerate the economic recovery and strengthen capacity to withstand future shocks, enabling the country to achieve sustainable economic growth.​

 

[Saif]

Bangladesh economy might have expanded in Nov

Bangladesh’s Purchasing Managers’ Index (PMI) increased to 62.2 in November, a 6.5 percentage point climb from October, according to an unofficial estimate, indicating accelerated economic expansion driven by agriculture, manufacturing and services sectors.

www.thedailystar.net

Bangladesh economy might have expanded in Nov

Bangladesh's Purchasing Managers' Index (PMI) increased to 62.2 in November, a 6.5 percentage point climb from October, according to an unofficial estimate, indicating accelerated economic expansion driven by agriculture, manufacturing and services sectors.

However, the construction sector saw a setback, reverting to contraction.

The PMI, released by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB), is a tool designed to offer timely insights into the nation's economic health, according to the MCCI.

Developed with support from the UK Government and technical expertise from the Singapore Institute of Purchasing & Materials Management (SIPMM), it provides a critical barometer for businesses, investors and policymakers.

In the latest report published on December 7, agriculture showed robust growth, marking a second consecutive month of expansion with improved indexes for new business and activity.

Employment in the also sector contracted at a slower pace, while order backlogs contracted faster. Manufacturing extended its expansion streak to three months, with gains in new orders, exports, factory output, and input purchases.

Notably, the sector posted first-time growth in employment, imports, and supplier deliveries. Order backlogs contracted at a reduced rate. The construction sector, which had marginally expanded in October, faced a downturn. Input costs and order backlogs contracted, though new business, activity and employment showed slight improvements.

The services sector continued its recovery, expanding for a second month with stronger growth in new business and order backlogs. Employment in the sector returned to positive territory, while input costs rose more slowly.

The latest PMI readings indicate a gradual expansion of the Bangladesh economy for the second month after previously posting 3 months of contractions.

Despite the positive outlook, the economy continues to face challenges arising from various political process-related uncertainties and disruptions from industrial and other protests.​

 

[Saif]

Salehuddin urges industrialists to invest in education, research

Finance adviser Salehuddin Ahmed on Sunday urged industrialists to invest in education and research to bridge the gap in skilled manpower and knowledge in the industrial sector...

www.newagebd.net

Salehuddin urges industrialists to invest in education, research
Bangladesh Sangbad Sangstha . Dhaka 08 December, 2024, 22:58

Salehuddin Ahmed | BSS photo

Finance adviser Salehuddin Ahmed on Sunday urged industrialists to invest in education and research to bridge the gap in skilled manpower and knowledge in the industrial sector.

The adviser made these remarks as chief guest at the celebration ceremony of the Graduate Diploma in Leather, Leather Goods and Footwear Management programme of East West University held at EWU campus in the city, said a press release.

Salehuddin Ahmed emphasised that successful figures like Bill Gates and Elon Musk did not achieve their innovations solely by themselves; their success was built on long- term investments in research.

He highlighted the irony that while business leaders in Bangladesh often complain about the lack of skilled manpower, they did not invest in educational and research institutions.

The event was presided over by chief adviser of EWU and former governor of the Bangladesh Bank Mohammed Farashuddin. Other distinguished speakers included resident representative of the Asian Development Bank in Bangladesh Hoe Yun Jeong, vice-chancellor of EWU Shams Rahman, senior vice-president of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh Mohammed Nazmul Hassan, additional secretary of the Finance Division Mohammed Walid Hossain and professor of the Department of Business Administration of EWU and programme director of the Graduate Diploma in Leather, Leathergoods and Footwear Management Programme Tanbir Ahmed Chowdhury.

The ceremony was attended by EWU diploma graduates, faculty members, Officers from different sections, officials from the Ministry of Finance, and representatives from the Asian Development Bank, among others.​

 

[Saif]

NBR to cut tax exemptions once economy improves: chairman

The government will rationalise tax exemptions once the country’s economic situation improves to some extent, according to National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan.

www.thedailystar.net

NBR to cut tax exemptions once economy improves: chairman

The government will rationalise tax exemptions once the country's economic situation improves to some extent, according to National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan.

"To boost revenue, we must come out of the culture of tax exemptions. Our development partners have asked us to discontinue this practice for our benefit," he said, describing the practice as discriminatory.

Khan made these remarks while responding to queries from journalists at the NBR headquarters in Agargaon yesterday.

The revenue authority is considering bold measures regarding tax exemptions, especially as the International Monetary Fund (IMF) has been persistently urging the government to cut them in a bid to increase the country's tax-to-gross domestic product ratio, which is among the lowest in the world.

"We have no alternative but to cut exemptions," he said.

"We will do it timely. We have already started. It's not like we are sitting idle. Except for essential commodities, we will take steps immediately where we have the scope."

The interim government has introduced various tax exemptions on the import of essential commodities, including rice, oil, eggs, and onions in recent months. The NBR chairman attributed these exemptions to the ongoing "economic crisis".

He also hinted at the imminent withdrawal of some tax exemption facilities.

"We have issued some statutory regulatory orders to cancel existing exemptions. Some more will be issued later," he said.

However, Khan assured that no forceful measures would be taken.

"We will move only after discussion with traders," he added.

Despite the revenue board allowing significant exemptions at the import stage, the prices of essential commodities have not yet reduced to expected levels, he said.

Khan also said that the NBR was set to observe the National VAT Day today and "VAT Week" from December 10 to 15.​

 

[Saif]

No overnight cure for ailing financial sector

There is no overnight cure for the deep-rooted challenges facing the country’s banking sector, Abdul Awal Mintoo, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said yesterday.

www.thedailystar.net

No overnight cure for ailing financial sector
Former FBCCI president Abdul Awal Mintoo says

There is no overnight cure for the deep-rooted challenges facing the country's banking sector, Abdul Awal Mintoo, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said yesterday.

He also said the initiatives that the Bangladesh Bank has taken so far are not enough to bring down non-performing loans.

He made the remarks while speaking on the current business and investment environment and the way forward at the Economic Reporters' Forum (ERF) office in Dhaka. The ERF organised the conversation.

Minto added that printing money to lend to cash-strapped banks is a misstep because it can cause inflationary pressures -- a thorn in Bangladesh's side for over two years -- in the domestic markets to intensify.

The economic data requires a lot of corrections, including in exports and imports, as the real data was not published during the last government's regime

The investment environment climate is attractive enough to lure in foreign direct investment, he added.

More than 96 percent of investment comes from people's savings, but they can hardly save due to high inflation, he said.

In recent times, well-dressed people are also standing in queues in front of the Trading Corporation of Bangladesh's Open Market Sales programme, which sells essentials at subsidised prices through trucks.

The former FBCCI president also said a warm relationship with India is needed for the sake of the country's interests.

Minto also said Bangladesh should not graduate from the group of Least Developed Countries (LDCs) and get the status of a developing nation based on false economic data.

A recent white paper on the state of the economy estimated that Bangladesh's gross domestic product had been overstated by 3.5 percentage points on average between FY13 and FY19.

"The economic data requires a lot of corrections, including in exports and imports, as the real data was not published during the last government's regime," he said.

Replying to queries, Mintoo said the corporate culture in the country has not improved yet as most big corporations are still very much family businesses.

He said the country's failure to produce an adequate number of qualified personnel to run such big corporations efficiently was one of the reasons for that.

However, this can cause serious problems for businesses, as exemplified by Beximco Group, which has been in hot water since the arrest of its vice-chairman Salman F Rahman after the political changeover.

Salman also served as the private industry affairs adviser to deposed Prime Minister Sheikh Hasina.

Regarding corruption under the past government, he said a section of people considered bribes to be an investment. It was not a political party but a section of people that ran the country without holding acceptable elections, Mintoo said.

He added that an acceptable election is needed to improve the business and investment environment.

He said a special environment must be prepared to attract investment, especially to capitalise on investments that are being shifted away from China.

Other countries are attracting that capital because of a good investment environment, he added.

He added that foreign direct investment has been slowing because foreign investors think Bangladesh is a risky country for parking funds.

Significant discrimination is being noticed in the country's education and health sectors and an elected government can remove such discrimination, he opined.

Mintoo expects the interim government will announce a roadmap to elections soon as all reform reports will be submitted to the government by the end of this month.

The way the government has been freezing the bank accounts of businessmen is not right. Such steps will affect business, he said.​

 

[Saif]

Finance adviser hints at end to tax break

Finance adviser Salehuddin Ahmed on Tuesday said that the tax exception culture enjoyed by industries over the years was due largely to low domestic revenue generation...

www.newagebd.net

Finance adviser hints at end to tax break
Staff Correspondent 10 December, 2024, 22:46

National Board of Revenue chairman Md Abdur Rahman Khan speaks at a seminar on the occasion of ‘VAT Day and VAT Week 2024’ organised by the National Board of Revenue at its head office at Agargaon in the capital Dhaka on Tuesday. Finance adviser Salehuddin Ahmed, Finance Division secretary Md Khairuzzaman Mozumder and Federation of Bangladesh Chambers of Commerce and Industry administrator Md Hafizur Rahman also spoke on the occasion. | New Age photo

Finance adviser Salehuddin Ahmed on Tuesday said that the tax exception culture enjoyed by industries over the years was due largely to low domestic revenue generation.

‘Days are numbered for enjoying the tax break,’ said the finance adviser at a seminar on the occasion of ‘VAT Day and VAT Week 2024’ organised by the National Board of Revenue at its head office at Agargaon in the capital Dhaka.

The finance adviser said that the local industries were needed to be got rid of tax exemption facility to face the challenges the country’s graduation from the least developed countries’ bloc in 2026 would bring.

Many local export-oriented industries which are now enjoying duty preferences in developed and developing countries may lose the benefit, he said.

The finance adviser was also critical about the tax evasion for which the country’s tax-GDP ratio has been ridiculed as one of the lowest in the world.

He suggested that tax officials should be friendly to taxpayers.

He called upon all to pay taxes so that the government is able to increase allocation to health and education sectors.

A World Bank report said the county’s income from value-added tax in 2018-19 could have been at least three times higher than the collection of Tk 85,000 crore had the government implemented the VAT law properly.

Presided over by NBR chairman Md Abdur Rahman Khan, Finance Division secretary Md Khairuzzaman Mozumder and Federation of Bangladesh Chambers of Commerce and Industry administrator Md Hafizur Rahman spoke at the seminar.

The finance secretary said the development partners often raised the issue of low tax-GDP ratio.

The revenue board should conduct strong efforts to augment revenue mobilisation, he said.​