BUSINESS leaders and top executives of multinational companies on Sunday said that bureaucratic tangles, unpredictable tax policy, poor infrastructure and shortage of power and gas were main constraints for attracting foreign direct investment (FDI) in Bangladesh, as per reports of a local daily.
At the 3rd Joint Chamber Meet-Up organised by Canada-Bangladesh Chamber of Commerce and Industry and Bangladesh Investment Development Authority (BIDA) at a local Hotel in capital Dhaka, businesses said that good governance and business-friendly public service were also crucial for trade and investment.
Michael Foley, Chief Executive Officer of Grameenphone, said that unpredictable tax policy was one of the major constraints for encouraging FDI in Bangladesh. The President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said that after a long debate with the private sector the National Board of Revenue (NBR) had agreed to conduct the impact assessment of new VAT law. The FBCCI President said that ease of doing business, stable regulatory policy and tax policy reform were important for investment and the FBCCI was pushing the government for that.
Bangladesh is one of the best places for investment among the developing countries and the country has the potential to increase the GDP growth to double digit through ensuring ease of doing business. But yet our infrastructure projects, costing billions of hard earned taxpaying citizens money, are done in a haphazard manner. One only has to look at the way the Moghbazar flyover was constructed to ask why weren’t the design flaws noticeable before the implementation of the project?
Such a callous and casual viewpoint of our economic infrastructural development will only hurt our real growth in the long term. Meanwhile, our tax authorities seek only new ways of getting more tax without understanding that it hurts small businesses. Small businesses are the lifeblood of any economy, employing most of the people in an economy. If they aren’t allowed to make profits then the entire economy is hurt. Squeezing them to increase tax revenue which is most inappropriately utilised for major projects is not anyway to look at economic development.
Bureaucratic red tape is yet another roadblock which stymies growth and FDI. Foreign companies are unlikely to invest if their investment is snarled in red tape. Such snarls occur only when the hands of those who pass the files are not greased. This should not be the case. While we have made some progress by opening a one stop solution for FDI for foreign companies much more remains to be done to ensure that the firms are not afraid that their investments will be legally entangled for years to come. All of these must be sorted out before foreign firms get the courage to invest in our country.
