Ensure conducive tax environment to enhance FDI
Establishing a competitive tax framework is essential for Bangladesh to attract a higher level of foreign direct investment (FDI), said a number of experts and investors.
They made the comments at a dialogue on "Conducive Tax Environment for Foreign Direct Investment (FDI) in Bangladesh" at the Gulshan Club in the capital on Wednesday, according to a press release.
Jointly organised by the Policy Exchange Bangladesh (PEB) and the Foreign Investors Chamber of Commerce and Industry, the event delved into the intricate interplay between FDI and the nation's tax structure, dissecting key challenges and options for charting a progressive path forward.
Distinguished luminaries from both the private and public sectors, including former members of the National Board of Revenue, top executives from several multinationals, leaders of local and bilateral chambers, tax professionals and experts well-versed in Bangladesh's tax ecosystem, attended the dialogue.
While presenting the keynote paper, M Masrur Reaz, chairman of the PEB, laid bare the current state and challenges impeding FDI, the intricacies of the country's tax system and its dominant role in investment decisions.
Speakers said FDI holds a pivotal role in shaping Bangladesh's journey towards becoming a smart and high-income nation by 2041, according to the press release.
The potential of FDI to provide the much-needed boost to growth engines and overcome challenges related to global value chain integration and technological innovation was widely recognised.
The speakers highlighted that adopting a progressive mindset and creating a tax regime that stands on par with neighbouring nations are crucial for attracting increased FDI inflows.
Bangladesh necessitates a stable and forward-looking tax policy that aligns with the national vision, thereby fostering greater investor confidence, they said, calling for transparency and efficiency in documentation processes.
The dialogue aims at streamlining operational efficiency and enhancing the overall revenue without imposing additional burdens on existing taxpayers.
The speakers also said modernising and digitalising the tax system is imperative to shed outdated practices.
Notably, the vision of a tax-friendly environment that transcends traditional paperwork and human interactions was heralded as a central aspiration.
Realising this vision requires comprehensive reforms within Bangladesh's taxation system, which can be achieved through increased engagement of the private sector, strategic investments, and unwavering political determination, the press release said.
This concerted effort aims to pave the way for a taxation landscape that is not only forward-looking but also responsive to the evolving needs of the economy, it said.
FDI increased 20 per cent year-on-year to $3.48 billion in 2022 for a surge in reinvestment of earnings by foreign companies, showed data from Bangladesh Bank.
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