Businesses demand ending red tape

Businesses yesterday demanded that the government bring an end to red tape and simplify rules for businesses to reduce production costs and be more competitive. 

In the next budget the government needs to ensure adequate supply of energy to the industries at an affordable price for production to run smoothly, they said.

Subsidies for different sectors need to be retained as some, especially, the cottage, micro, small and medium enterprise one, need those to grow.

If the government thinks the subsidies need to be withdrawn, it should take into consideration the fact that this will affect revenue collection, said Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

He was speaking at a pre-budget discussion jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and daily Samakal at Bangabandhu International Conference Centre in Dhaka.

Sameer Sattar, president of the DCCI, moderated the discussion.

Jashim Uddin said there were three challenges for the economy -- the severe impacts of the pandemic and Russia-Ukraine war and challenges of Bangladesh making the United Nations status graduation from a least developed to a developing country in 2026.

The recent collapse of some big banks in the US may also have an impact on the local economy, he said, urging the government to be cautious.

It is expected that the government will address the red tape as it is needed to make it easy to do business, Jashim Uddin also said.

AK Azad, a former president of the FBCCI, echoed him.

From July 2019 till date, the price of gas has been increased by 214 per cent but pressure in the supply lines is sometimes still drops, making it hard to run industries, he said.

He cited an example of an industrialist, albeit withholding the name, who has invested Tk 25,000 crore and employs over 1 lakh employees.

If a lack of gas halts production for even two hours, it will be difficult for the industrialist to pay his monthly loan instalment of nearly Tk 250 crore alongside workers' wages, he said.

Azad demanded that the government withdraw duty and taxes on recycled fabrics, saying international clothing retailers and brands have been asking for 25 per cent of garments be made from recycled yarn by 2025.

The government should withdraw all kinds of tax and VAT on manmade fibre import as the country needs to tap into the $750 billion-worth global non-cotton market, said Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA).

Increasing use of manmade fibres and recycled yarn will reduce cotton imports by 15 per cent, he said.

Asif Ashraf, a director of the Bangladesh Garment Manufacturers and Exporters Association, demanded that the government provide an incentive on the use of manmade fibres to strengthen the sector.

Moreover, the government also needs to sign free trade agreements and prepare for availing the Generalised System of Preferences (GSP) Plus status of the European Union to enjoy the trade benefits after the LDC graduation in 2026, he said.

Ahsan Khan Chowdhury, chairman of Pran-RFL Group, demanded that the government introduce bonded warehouse facility for some sectors that bear potential so that they could grow like the garment industry.

Moreover, he demanded that the government simplify the process for paying advance income tax for businesses and for granting bonded warehouse facilities for businesses in the northern districts.

Three factors need to be addressed in the next budget -- macroeconomic stability, investment facilities and food security, said Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM).

Reforms in taxation is also important, he said.

Currently there is no liquidity crisis in the banking sector and the banks in the US are collapsing because they lost the confidence of their customers, said Mashrur Arefin, managing director of City Bank.

Over Tk 1 lakh crore has gone out of the local banking sector because of the recent volatility in the exchange rate between the US dollar and taka, he added.

Shafiul Islam Mohiuddin, a lawmaker and former FBCCI president, questioned a government decision to not allow new utility services for industries established outside of industrial zones.

It will take at least five years for the Mirsarai economic zone to be prepared for the establishment of factories and it is not logical for interested investors to sit out that long, he said.

The government is formulating a budget to control the inflationary pressure on the economy, said State Minister for Planning Shamsul Alam.

Businesses running small-scale operations are not interested in paying taxes and such a mentality needs to change, said Salman F Rahman, adviser to the prime minister on private industries and investment.

Mainuddin Monem, managing director of Abdul Monem Limited, also spoke.