The Government of Bangladesh (GoB) is working under its economic vision to make Bangladesh a hunger and poverty-free country; but the Covid-19 has put people and the economy into unbearable sufferings. Nobody knows how long this deadly Corona virus will kill the people and bleed the economy and how quick the national economy can be repaired.
A number of businesses have been affected by Covid-19 and those companies have become unable to pay salaries to their employees, meet the financial obligations and pay off the bank loans. The overall situation is that many people have lost jobs and having no income, no livelihood. Common people’s purchasing power has also been substantially reduced. Under this situation, the government should give more emphasis on public health and livelihoods of the citizens.In order to face and overcome the Coronavirus sufferings, GoB now provides all out support to the health sector and businesses. The government has announced a number of stimulus packages for different businesses and individuals affected by Corona virus to continue their businesses. In fact, Bangladesh now needs to redesign its development strategy and give more emphasis on creating more jobs and self-employment opportunities to survive amid Covid-19. For this, it is necessary to increase public expenditure without increasing the tax burden of the businesses and the citizens.
The changed global politics and the trend of relocation of investments have created an opportunity for Bangladesh to attract more FDI. The development of Bay of Bengal Industrial Growth Belt (BIG-B), one hundred economic zones and thirty-nine Hi-tech parks at different parts of the country have made Bangladesh an attractive investment destination. Bangladesh should grab this opportunity by encouraging private investments and FDIs. For this, corporate tax rate in Bangladesh shall be reduced in line with the competitive countries like Vietnam, Cambodia, Indonesia, Thailand and India.
There is no denying that Tax-GDP ratio of Bangladesh is lowest in the world; but it is a reality that this cannot be increased without encouraging private investment and businesses. The private investors want a hassle-free sustainable taxation policy and on-line system of paying taxes. So, physical contact between taxmen and taxpayer shall be minimized and no taxman shall be allowed to call a taxpayer for hearing without having specific proof of tax evasion. Taxmen should collect the information of taxpayers using digital technology avoiding the hearing. More physical contact and more hearing will not increase tax revenue; but result more harassment only.
BIDA, BEPZA and BEZA are working to attract and facilitate private investment and business in the country and for this purpose, they often recommend to declare various tax incentives. However, in many cases, NBR declines those recommendations which gives a negative message to the investors.
In spite of having all positive indicators, Bangladesh’s doing business performance is frustrating. There is a mind-set in a section of government officials that the private investors are normally dishonest and they make money taking the advantages of government’s supports and incentives. As such, they are reluctant to facilitate businesses; rather they want to regulate and control the private investments and businesses. The present situation demands to change this attitude.
GoB’s 8th 5 Year Plan gives importance on industrialization and top priority to job creation. Under the changed situation, the nation now needs smart leaders, policy makers, and bureaucrats who really believe the economic vision of the government and sincere to provide automated on-line solutions and encourage private investment and businesses to create job opportunities.
(The writer is the Council Member and Past President of ICMAB)