Meghna Group abusing bond facility

Staff Correspondent

12 September, 2019 12:00 AM printer

A vested quarter led by Meghna Group has become desperate to get bond facility to import raw materials for producing consumer goods with an ulterior motive to create a monopoly and destabilise the local market.

They seek the bond facility for the factories located in the Economic Zones.

Getting the bond facility will significantly lower the production cost, which will create a market monopoly and hurt industries located outside the Economic Zones.

Genuine industrialists are already facing uneven competitions due to the abuse of bond facility by a section of unscrupulous businessmen. The government is also counting huge revenue loss due to this widespread malpractice.

Meghna Group, which has already captured the market of consumer goods, is desperately trying to get the bond facility.

The quarter has reportedly managed to mislead and convince the Prime Minister’s Office (PMO) to succeed in its evil bid to get the bond facility for Meghna Group.

As a result, on June 20, PMO director-1 Md Rezaul Huq sent a letter to National Board of Revenue (NBR) asking to take necessary steps to provide EZ factory owners with the bond facility.

The entrepreneurs having their industries at the EZ should get the bond facility for importing raw materials for consumer goods, the letter said.

However, such products will be subject to tax at the time of sale, the letter added. The letter also suggests that the bond facility is needed to attract local and foreign companies to build industries in the EZ.       

NBR Chairman Mosharraf Hossain Bhuiyan said his office is working to implement the request made by the PMO.

“We are optimistic about a positive outcome as NBR, Bangladesh Economic Zones Authority (BEPZA) officials are working together on the issue,” he added.

However, the business leaders have opposed the move to give the bond facility to only EZ factories.

If any company gets the bond facility in the import of raw materials for consumer products, it may abuse it and launder money, business experts said.

Such companies will hold common people hostage, destabilize the market of consumer goods and put the government in an awkward situation, they apprehended.

FBCCI senior vice-president Md Muntakim Ashraf said the government should not take any step which can affect the market of consumer products.

“The consumer goods market is very sensitive. The authorities concerned should not take any decision which is beneficial to a group of businessmen and detrimental to another. I hope NBR will consult all stakeholders before finalizing the bond issue,” he said.

Helal Uddin, president of Dhaka Metropolitan Shop Owners’ Association, criticised the move to offer the bonded facility to a section of industries.

Bond facility to only a specific group of consumer goods manufacturers is discriminating to other companies as it will create the scope for monopoly business and market unrest, he said.

 “Level playing field for all businessmen is a must for market stability. Any discriminatory step will result in monopoly business by the facility recipients,” he added.

 Sources at NBR alleged that Meghna Group is already abusing its tax holiday facilities. The Group produces consumer goods at its factories in several economic zones. It has managed to apply the facility for its other industries located beyond the economic zones.

On July 16, NBR held a meeting on abuse of tax facilities which are given to industries located in the EZs.

 The owners of the industries located in EZ are exempted from advance income tax (AIT), advance tax (AT) and income tax.

 Abusing the facility, two companies are marketing edible oil, sugar, atta, flour and other essential items at very low cost. As a result, other companies are facing uneven competition in the market and struggling for survival.