‘Equal corporate tax for exporters to draw higher FDI’

The proposed equal corporate tax of 12% for all the exporters, which currently enjoy only export-oriented readymade garment industries, will help draw higher foreign direct investment, said speakers at a roundtable organised by the Institute of Chartered Accountants Bangladesh (ICAB) and the Japan Bangladesh Chamber of Commerce and Industry (JBCCI). 

"Obviously, the proposed 12% corporate tax for all the exporters will go in favour of foreign investors as many of them prefer the labour-intensive country to set their facilities with a purpose of manufacturing and supplying goods to Asia and other nearby regions," Shubhashish Bose, chief executive officer of ICAB, said at the event that took place at a capital hotel on Sunday.

"The budget also proposed many business-friendly initiatives which will definitely reduce the cost of doing business for the investors," ICAB Council Member Maria Howlader added. 

Lauding many features of the proposed budget for FY23, Japanese investors and officials said the government can make the budget more foreign investment-friendly with a revision of some provisions.

"VAT registration has been made mandatory for the liaison and branch offices of foreign companies from the next fiscal year, which will make the entry of new foreign companies lengthy. Another provision that says all transactions must be made through banking channels will create obstacles,"Japan External Trade Organisation Country Representative Yuji Ando.

"We urge the government to withdraw the provisions so that foreign investors can feel free to invest more in the country," he added and called for relaxing the rules of work permits for the foreign nationals in Bangladesh. 

Currently, foreign nationals can avail six-year permits at a time to work in Bangladesh. "Foreign companies also need to renew their permits from time to time, which is not realistic. It should be made one-time," said Ito Naoki, Japanese ambassador in Dhaka.

The Bangladesh Special Economic Zone, also known as the Japanese economic zone, at Araihazar upazila of Narayanganj will go into production in late 2023, he noted and added that once it becomes a success story, more economic zones will be developed by Japan.

ICAB President Md Shahadat Hossain said Japan along with its 320 companies has contributed to the development of the country and it will continue the support.

JBCCI President Asif A Chowdhury said appropriate reform measures are needed in the country's administration to attract more investment in the country.