Businesses in energy, dollar crises, seek exit policy

Entrepreneurs have sought exit policy from the government, expressing fear that many industries may shut down due to the ongoing gas and electricity crisis, along with increases in bank interest rates and the dollar exchange rate.

"Lights are dimming for industries due to the dollar and power crisis. Give us an exit policy if we are forced to shut down our industries," said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), while speaking at the meeting of the Consultative Committee of National Board of Revenue (NBR) today (4 April).

He said, "We work hard to bring dollars into the country. But if we are unable to conduct business due to numerous obstacles, where will the government get its dollars from?" 

Other business leaders echoed similar concerns during the meeting jointly organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the NBR at a hotel in the capital. 

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), highlighted challenges in the export sector, stating, "Interest rates and the dollar rate are rising. Banks are prioritising dollar business over supporting us.

"We are not getting the price of export products. We have to take orders at a lower rate than the cost of production. In such a situation, many factories will be closed. We need a safe exit policy."

He said the government has made an easy exit policy for banks. "If a bank is closed, customers will get only a maximum of Tk1 lakh. But there is no easy exit policy for industrialists."

Masadul Alam Masud, a steel sector entrepreneur, said a 40% increase in production costs due to rising dollar prices. He warned that continuous gas price hikes could deter investment in the country.

Munir Hossain, vice president of FBCCI, told TBS, "Exit policy is to give an opportunity to a business that is unable to run due to losses, natural causes or if unable to pay debts in case of bankruptcy."

He said exit policy does not mean giving opportunity to wilful defaulters. Currently, there is no exit policy in Bangladesh.

The NBR chairman, Abu Hena Md Rahmatul Muneem, chaired the meeting, attended by Finance Minister Abul Hassan Mahmood Ali. 

The finance minister assured businessmen that their concerns would be addressed, emphasising the prime minister's commitment to fairness. "Everyone's well thought out opinion will be considered. The prime minister wants to ensure fair dues for all." 

Power and gas crisis

At the discussion, Matiur Rahman, managing director of Uttara Motors and president of Bangladesh Motorcycle Assemblers and Manufacturers Association, said many industries in Bangladesh are grappling with gas and electricity shortages, leading to significant cost increases. 

"Our request to the finance minister is that you give us gas, we are willing to pay whatever revenue you want. Arrange to run our factory with gas and electricity. It is no longer possible to run this factory with LPG," he said.

Md Khorshed Alam, chairman of Little Star Spinning Mills Limited told The Business Standard that one of his factories in Narayanganj's Bhulta has almost stopped production for the last two days due to lack of gas. 

"The condition of all gas dependent factories in the same area is almost the same," he added.

Harassment by tax officials 

During the meeting, businessmen demanded a business-friendly environment by simplifying the tax system and reducing harassment. 

FBCCI President Md Mahbubul Alam urged special priority in the next budget for eliminating complications in the tax system. 

He also called for investment protection, increased port capacity, balanced currency and customs management, and reduced transportation costs, ensuring permanent infrastructure development in the field of electricity and energy, transparency and good governance, especially to reduce business costs.

He further said, "We want a business-friendly environment by making it easier and cheaper to do business." 

BKMEA's Mohammad Hatem said Bangladesh's taxation system is against investment and business. 

Giving examples, he explained, "Fines are being unfairly imposed, making the situation intolerable. This is primarily due to officials' incentives, resulting in wrongful export withholding and fine collection."

The meeting also highlighted various steps taken by the NBR in the interest of business in the last few years.

BTMA's Khokon said that those who have stolen from banks should be held accountable instead of labelling their debts as bad loans.

He urged authorities to expel the looters, and not mix their funds with honest traders. 

He added, "We've paid our loans and taxes faithfully. If our industries are forced to shut down due to gas shortages or currency fluctuations, we need an exit strategy to exit gracefully."