Fund managers on Thursday urged the government to reform the policy for alternative investment along with exemption of tax in next fiscal year to help new businesses to flourish.
Venture Capital and Private Equity Association of Bangladesh (VCPEAB) also focused on tax rebate on provident fund investment while addressing a post-budget press conference in the city.This type of investment has become familiar in the country when VCPEAB started its journey in 2016 with the objective of strengthening the investment environment through alternative investment.
The alternative investment is a new financial concept covering mainly two types of finance — venture capital (VC) and private equity funds.
VCPEAB Chairman Shameem Ahsan raised the demand of the sector at a meeting at Janata Tower in capital’s Karwan Bazar which was also addressed among others by General Secretary Shawkat Hossain.
Pegasus Tech Ventures General Partner Shameem Ahsan said the relevance of venture capital for economic development became particularly noteworthy for countries like United States, Singapore, Indonesia where the VCs got adequate policy support from their governments.
Venture capital directly triggers employment generation, creates self-employment opportunities, and is often the only available source of financing to small and young companies, according to Shameem.
Shameem sought policy support regarding tax exemption for the Alternative Investment Fund Managers and High net worth Individual (HNI) investors. According to him, tax rebate on provident fund Investment can bring revolutionary change in the industry.VCPEAB Secretary General Shawkat Hossain said venture capital and private equity sector are being at their nascent stage, we would like to request the opportunity for alternative fund managers to be totally exempted or entitled for reduced tax rate from income tax for a period of 10 years which is a standard time for VCPE firms to earn from their core business.
Among others, VCPEA Vice Chairman Zia U Ahmed and Maslin Capital Managing Director Wali-Ul Maroof Matin spoke on the occasion.
Bangladesh Securities and Exchange Commission (BSEC) has passed the Alternative Investment Rules in 2015. Under this rule, various venture capital and private equity companies have been established in Bangladesh. In addition to these, many foreign venture capital companies are working in Bangladesh.