Japan has come up with more than two dozen proposals, including tax benefits and a cut in motorcycle registration fee, as it looks to boost its investment in Bangladesh.
On behalf of the businesses, Japanese Ambassador Naoki Ito shared the proposals at a meeting with Finance Minister AHM Mustafa Kamal at National Economic Council in Dhaka yesterday.
After the meeting, Ito told reporters, “We have raised some issues to increase Japanese investment. I think these issues will be addressed. We are looking for some solutions to expand business here.”
“Our hope is to expand business in Bangladesh which will bring very positive outcome for the economy of Bangladesh,” the Japanese ambassador said.
He said if the investment climate for business improves, foreign investment, including those from Japanese companies, will receive a boost.
The Japanese team requested the government to review the Motor Cycle Policy 2018 and lower the registration fees to 8 percent.
Presently, the registration fee for motor cycles is 22 percent whereas it is 5 to 8 percent in other South Asian countries.
The envoy raised the proposals on behalf of the Japan Commerce & Industry Association in Dhaka.
According to the proposals, many Japanese companies are considering to set up subsidiary offices and factories in Bangladesh. The Japanese side has been requesting to revise the free of cost import policy to accept the global business practices.
It has already been noted to the National Bureau of Revenue (NBR) and the Bangladesh Bank, and Japan has requested to take necessary steps to make changes in the policy which stipulates the rules and regulations for free of cost import.
After the meeting, Kamal told reporters that the Japanese side raised issues which are not law related; rather, they are procedural only.
“We can solve the problems at our level as there is no legal complexity,” he said.
He said the NBR chairman, who was present at the meeting, assured that the developments would be brought about.
Kamal said the issues were identified in the meeting and they would be catered to so that these do not arise in the future. “We expect large-scale Japanese investment,” said Kamal.
The Japanese team called for improvement of immigration services at the airport as sometimes it takes three to four hours for a passenger to get the visa on arrival.
At Benapole customs, undervalued and under-weighted items are overlooked, it said.
It called for removing the existing law that makes mandatory wage hike for workers at the export processing zones (EPZs). The wage rate should be based on the consumer price index (CPI), performance, and capacity of investors, it said.
The minimum wage for the companies in the EPZs does not include transportation and food allowances, whereas the same for the factories outside of the EPZs includes the two allowances.
The Japanese team requested to review the policy and facilitate new market exploration assistance for type A (100 percent investment by foreign-owned) and type B (joint investment by local and foreign) companies in the EPZs.
The team also raised the problems faced by Japanese contractors working in Bangladesh.
It called for allowing the project officer to draw remittance from the actual profit fund to their parent company after completing the project and making the procedure for transferring remittance easier.
Another proposal demanded tax and VAT exemption for Japanese companies which are implementing the metro rail project and the Matarbari coal-fired power plant project.
Last week, Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority, called the requests logical as Japanese investors want sustainability of their businesses.
He expects the planned Japanese Economic Zone at Araihazar in Narayanganj to draw $20 billion in Japanese foreign direct investment once it is constructed on 650 acres of land with a capacity to accommodate around 200 companies.
Though the economic zone project is scheduled for completion by June 2023, Chowdhury hopes for the factories to be set up there by early 2022.