Reforms in revenue sector needed to attract more FDI: Salehuddin

Finance Adviser Salehuddin Ahmed has called for reforms in Bangladesh's revenue sector, warning that without proper changes, the country may not attract foreign direct investment (FDI) at the expected level.

During a discussion programme at the revenue board's headquarters in the capital's Agargaon yesterday, Salehuddin mentioned that a scheduled meeting with a six-member US delegation will take place in Dhaka, where the US team is expected to inquire about reforms in the revenue sectors.

"The immediate challenges before us are reforms in the revenue sector and banking, and political reforms will follow," he added.
About revenue target set at Tk4.8 lakh crore for FY25, he said the target will remain unchanged as the country needed to reduce dependence on foreign funds and increase its internal revenue generation.  

Regarding public expectations for broader reforms, the finance adviser said, "People are eager to see reforms. While there have been some changes in the financial, banking, and education sectors, many feel that other areas have not seen as much progress."

Despite certain advantages, Bangladesh has not attracted the expected amount of FDI, with investors citing several reasons, including the country's complex tax structure, he said. 

In a recent meeting with the National Board of Revenue (NBR) chairman, leaders from the Foreign Investors Chamber of Commerce and Industry (FICCI) expressed their concerns. 

They sought NBR's support in reforming the country's tax system to make Bangladesh a more attractive destination for FDI and to bolster the national economy.

According to central bank data, Bangladesh received $3 billion in net FDI last year, compared to $3.48 billion in 2022. Economists say that the FDI inflow in Bangladesh is lower than the competitive Asian countries. 

The finance adviser said, "We have to reduce foreign fund dependency." 

He also encouraged tax officials to modify their approach so that taxpayers no longer dread dealing with the revenue department.

"Taxpayers shouldn't feel apprehensive when they encounter you. Many people tend to steer clear of tax officials to avoid potential mistreatment."

Salehuddin underscored the government's focus on minimising wasteful spending and ensuring that public funds are used responsibly.

Abdur Rahman Khan, chairman of NBR, acknowledged that there is an image crisis in the revenue administration. To overcome the situation, he urged tax officials to take proactive measures.

"Additional benefits cannot be given to any individual organisation. We will be business-friendly, not businessman-friendly," he said.

The discussion, organised by the Bangladesh Civil Service (Taxation) Association, was chaired by its president, M Lutful Azim. Top NBR officials were present at the programme.