Help existing investors to attract new ones, foreign investors tell govt

Foreign investors in Bangladesh have urged the government to extend greater support to the existing investors to encourage fresh ones.

"Please help existing investors to be successful, and you [Bangladesh] will attract new investors," said Yuji Ando, board director and joint secretary general of the Japan-Bangladesh Chamber of Commerce and Industry.

He noted that Japanese investors are increasingly drawn to countries like Vietnam and Indonesia where investment incentives are more attractive than those currently offered by Bangladesh.

He was speaking at a seminar titled "Fiscal issues for National Budget 2025-26 to foster economic and business growth," held at a hotel in Banani, Dhaka today.

Expressing dissatisfaction, Ando pointed out the inconsistency and lack of predictable policies in Bangladesh, which discourage foreign investors.

As an example, he said, "There is a lengthy process and significant cost involved in disposing of old machinery for EPZ investors, which presents a major challenge."

Manabu Sugawara, board director of the Foreign Investors Chamber of Commerce and Industry and country head of Marubeni Corporation, a Japan-based company, also stressed the need for a consistent and predictable tax policy.

"Tax policy should be aligned with investment policy, and inter-ministerial and inter-agency coordination needs to be enhanced when formulating or changing policies," he added.

The seminar was jointly organised by FICCI, the Institute of Chartered Accountants of Bangladesh (ICAB), and the Japan-Bangladesh Chamber, with NBR Chairman Abdur Rahman Khan attending as the chief guest.

Other representatives from local and foreign investment communities also emphasised the importance of consistent and predictable tax policies.

"Without confidence being restored among local investors, why would foreign investors come to Bangladesh to invest?" questioned Maria Howlader, president of ICAB.

FICCI president Mohammad Zaved Akhtar and Japan-bangladesh Chamber president Tareq Rafi Bhuiyan also raised the issue of high effective tax rate in Bangladesh and stressed for taking action to reduce it.

"Investors need a clear and predictable policy regime to make investment decisions," the Japan-Bangladesh Chamber president said.

NBR Chairman Abdur Rahman Khan highlighted that most investment-related issues have already been addressed by the tax authorities and that the NBR is working closely to resolve the remaining challenges.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, and Snehasish Barua, partner at Snehasish Mahmud & Company, presented two keynotes at the event.

'Cutting incentives may impact investment'

Maria Howlader also raised the concern of the government's move to cut tax exemption, saying it may hinder local and foreign investment.

"The NBR is currently moving away from broad-based exemptions and tax holidays, shifting towards a more streamlined and restrictive incentive regime. This shift could have significant implications for future investor interest and should be part of the broader discussion," she added.

The ICAB president also said effective tax rates in Bangladesh are high which is going up 45% and in some cases 80%. A complete feasibility analysis is required to ensure a standard effective tax rate in comparison to competing countries.