Simplification of tax administration and development of appropriate infrastructure are necessary to attract more foreign direct investment (FDI) to Bangladesh, according to panellists at a roundtable on FDI prospects for the proposed national budget for the financial year 2022-2023.
The discussion was co-hosted by the Institute of Chartered Accountants Bangladesh (ICAB) and the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) at the InterContinental Dhaka in the capital yesterday.
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Addressing the event as the chief guest, Japanese Ambassador Ito Naoki said Bangladesh had set a unique example in terms of economic recovery from the Covid-19 pandemic.
“However, the Russian-Ukrainian war again changed the world economic situation,” he said.
Mentioning that all international rules and regulations must be followed, Naoki said foreign companies in Bangladesh have to renew their work permits every one to three years, which is unrealistic.
“It should become a one-time problem.”
The Japanese Ambassador went on to say that ICAB and JBCCI will continue to work together to create a pleasant business environment in Bangladesh where foreign investors can enjoy more facilities.
“They (ICAB and JBCCI) will present specific proposals to policy makers and very strategic efforts are needed for this,” Naoki added.
ICAB President, Md Shahadat Hossain said Japan continuously supports Bangladesh for the nation’s successful graduation from least developed country status.
About 320 Japanese companies are currently doing business in Bangladesh and the number is expected to increase over the next few years.
Bangladesh aims to bring in $2 billion in FDI in 2022 and $2.5 billion in 2023, and the ICAB believes that Japanese entrepreneurs will go a long way toward achieving that goal, he added.
JBCCI Chairman Asif A Chowdhury said appropriate reform measures are needed in the country’s tax administration to reduce bureaucratic entanglement and interference in business and investment to attract more investments.
Stressing the need to improve the efficiency of port services, he said customs clearance procedures should be simplified to ensure ease of doing business. He also made recommendations on privatization, modernization of business law and macroeconomic stability policies.
Highlighting the main features of the upcoming budget, ICAB Vice President NKA Mobin demanded the simplification of the country’s tax administration and the development of appropriate infrastructure to attract more FDI.
Yuji Ando, chief national representative of the Japan External Trade Organization, said VAT registration has been made compulsory for liaison offices and branches of foreign companies from next fiscal year. which will take longer as entrepreneurs will encounter difficulties in the VAT registration process.