Traders call for easier VAT management, improved law and order situation for smooth business operations

Highlights:

• Traders criticised high taxes, poor law and order, and business harassment
• DCCI called for tax reform, automation, and easier credit for SMEs
• Bangladesh Bank launched SME-friendly loans with low interest rates  
• Police reported crime control progress and urged public cooperation  
• Business leaders demanded VAT simplification 

The overall trade and investment situation in the country is not satisfactory due to higher VAT and tax rates as well as a weak law and order situation, traders at a Dhaka Chamber of Commerce and Industry (DCCI) said today (26 April). 

During a view exchange meeting, chaired by DCCI President Taskeen Ahmed, on recent trade and investment scenarios and related issues at the Tokyo Square Convention Centre, traders of Dhanmondi, Mohammadpur, Shyamoli and Adabar expressed their concerns.

They highlighted high interest rates on bank loans, lack of access to finance, higher VAT and tax rates and its complex management system, harassment, lack of automation, and unbearable traffic congestion, and called for smoother business operations, said a press release.

DCCI President Taskeen Ahmed said, "The current global economic situation, the challenges arising in the country's domestic business, the complexity of tax and VAT system, the crisis in foreign exchange management, delay in export-import process, and above all weak law and order situation are adversely affecting the economy, which is particularly affecting our SME entrepreneurs. 

"Under the current circumstances, there is no alternative to building a safe, stable and predictable business environment."

He also mentioned that the Dhaka Chamber has already proposed to bring the overall revenue management under full automation in the upcoming budget along with rationalising tax rates, introducing single digit VAT rate and fixing 1% VAT for the informal sector and introducing a VAT return app, which will improve the business environment and increase the government's revenue collection. 

He said easy access to credit, bringing mobility by implementing automation in export-import activities and timely policy support from the government is necessary to continue the growth of industrialisation. 

"Businessmen want to pay tax and we pay tax and vat, but we do not want any harassment," he said, adding, it is inevitable to ensure rule of law and its enforcement to make sure business operations are active at any level.   

Mohammad Mostafizur Rahman, additional director (SME and Special Programs Department), Bangladesh Bank, said recently the central bank issued a master circular on 17 March to increase the credit flow to the SME sector. 

To facilitate the businessmen, the period of term loan has been extended to seven years from the previous five years since the investors need at least two years for establishment of the factory, he added.

He also said under different schemes, the Bangladesh Bank has created a fund of Tk25,000 crore only for the SME entrepreneurs, where entrepreneurs can avail loans at a maximum interest rate of 7% and for women entrepreneurs it is only 5% and for agro-entrepreneurs it is also very low. 

He mentioned that the Cash Reserve Ratio (CRR) has been reduced from 5.50% to 3% recently to increase credit flow to the private sector.

Additional Commissioner of Customs, Excise and VAT Commissionerate, Dhaka (West) Milon Sheikh said about 80% of the government's total revenue target has been collected through the National Board of Revenue (NBR), which is "a very difficult task". 

He said the growth of VAT collection especially in Mohammadpur and adjacent areas has increased by about 15-20% this year and 98% of the small businesses in this area have been brought under VAT registration in the last three months. 

Regarding a proposal of creating a mobile app for online vat registration, he said it is a good move and the government will surely consider such a great idea in future because it will reduce human contact and harassment. 

He then requested the SME businessmen not to ignore the VAT issue rather try to know the details of VAT law for their own interest despite it being a complicated mathematical subject indeed. 

Alamgir Kabir, additional deputy commissioner of Police (Tejgaon Zone) of Dhaka Metropolitan Police (DMP), said the law and order situation in this area has improved significantly in the last two months, while the number of cases has decreased. 

He said on 27 March, about 63 extortionists were arrested by the block raids of police and recently 71 miscreants were also brought to book for their involvement in various crimes in a single day in Mohammadpur area alone. 

He also informed that about 63 patrollers are constantly working in this vast area under active policing for the safety of the people. 

He also urged the people to help police with adequate information. 

"If the small traders of various markets of this zone want any help from the police ahead of Eid-ul-Adha, police will be happy to provide all possible support," he added. 

Additional Deputy Commissioner of Police (Traffic, Tejgaon Zone) Tania Sultana stressed the need of increasing public awareness and following traffic rules to resolve traffic congestion since traffic congestion is never created by the police. 

She also said people have to change their views and mindset and obey the traffic rules while they are on the roads. 

She said at present, only 632 traffic police personnel are working in the vast Tejgaon zone, which is a very difficult task to maintain.

In the discussion, Member of Tokyo Square Convention Shop Owners Association Mohammad Hiru, President of Rapa Plaza Shop Owners Association Motahar Hossain, President of Town Hall Market Association Lutfor Rahman Bablu, Joint Secretary of Bangladesh Brick Association Nazrul Islam, Tax Consultant Probir Kumar Paal and other traders of different associations also spoke. 

They urged for an easy VAT return submission process, increasing the VAT net, introducing VAT return app, improving law and order situation, controlling extortion, reducing traffic congestion, reducing interest rate on bank loans, easy access to finance for the SME sector and reducing harassment at all levels for the small traders. 

DCCI Senior Vice President Razeev H Chowdhury, Vice President Md. Salem Sulaiman and members of the board of directors of DCCI were also present on the occasion. 

Meanwhile, 27 business entities of Dhaka got DCCI's membership at the event and DCCI President Taskeen Ahmed handed over their membership certificates to the representatives of those business organisations.