Proposed equal corporate tax of 12% for all exporters, which currently only benefit from export-oriented garment industries, will help attract more foreign direct investment, speakers said during a panel discussion organized by the Institute of Chartered Accountants of Bangladesh (ICAB) and the Japan and Bangladesh Chamber of Commerce and Industry (JBCCI).
“Clearly, the proposed corporate tax of 12% for all exporters will go in favor of foreign investors, as many of them prefer the labor-intensive country to locate their facilities in the purpose of manufacturing and supplying goods to Asia and other nearby regions,” Shubhashish Bose, chief executive of ICAB, said at the event, which took place at a hotel in the capital on Sunday.
“The budget also proposed many business-friendly initiatives that will certainly reduce the cost of doing business for investors,” added ICAB Board Member Maria Howlader.
Welcoming many features of the proposed FY23 budget, Japanese investors and officials said the government could make the budget more favorable to foreign investment by revising some provisions.
“VAT registration has been made compulsory for liaison offices and branches of foreign companies from the next financial year, which will make the entry of new foreign companies time-consuming. Another provision which stipulates that all transactions must be carried out through banking channels will create obstacles,” Yuji Ando, national representative of the Japan External Trade Organization.
“We urge the government to withdraw the provisions so that foreign investors can feel free to invest more in the country,” he added and called for the relaxation of work permit rules for foreign nationals in Bangladesh.
Currently, foreign nationals can avail a permit for six years at a time to work in Bangladesh. “Foreign companies also have to renew their permits from time to time, which is unrealistic. It should be done only once,” said Ito Naoki, Japan’s ambassador to Dhaka.
The Bangladesh Special Economic Zone, also known as Japan Economic Zone, at Araihazar upazila of Narayanganj will go into production at the end of 2023, he noted and added that once it becomes successful, more economic zones will be developed by Japan.
ICAB President Md Shahadat Hossain said Japan and its 320 companies have contributed to the country’s development and will continue to support it.
JBCCI Chairman Asif A Chowdhury said that proper reform measures are needed in the administration of the country to attract more investment to the country.