The frustration and anxiety expressed by the country’s top businessmen at a recent investment dialogue held in the capital is a major warning sign for the country’s economy.
Trade and commerce are at a standstill today due to high interest rates, unbearable tax, energy crisis and bureaucratic complications. Needless to say, there is no room for ignoring their concerns.
The interim government’s policymakers now need to take visible steps to overcome the crisis, not just assurances. In this regard, businessmen have suggested several steps to be taken.
For example, rational reform of the tax system; where businessmen have defined ‘tax terror’ as the unreasonable pressure of advance income tax and tax at source.
This policy of paying taxes even if there is a loss is contrary to the natural development of business.
The traders have emphasized the importance of the National Board of Revenue (NBR) moving away from this ‘automated’ tax system and formulating a realistic tax policy.
The main responsibility of the NBR should be to create a place of trust where the businessmen can pay taxes in a harassment-free environment.
It is worth mentioning that the Bangladesh Bank Governor has assured to reduce interest rates in January, subject to a decrease in inflation, which is positive.
However, to compete with competing countries like Vietnam and India, it is necessary to consider special incentives or flexible interest rates for the export-oriented industrial sector now.
In that case, while the IMF’s advice is important, policies must be formulated taking into account the capabilities and realities of the country’s industries.
Also importance must be given to the aspect of competition and security in the energy sector.
In addition to long-term planning, uninterrupted gas and electricity supply to industries must be ensured immediately.
Initiatives must also be taken to control production costs by reducing waste and increasing the use of renewable energy, if necessary.
There is no logical doubt that the governor’s argument for ‘not closing down institutions’ regarding defaulters and money launderers is in the interest of protecting employment; but we must be careful that criminals do not get away with it.
Whether its dishonest bureaucrats, businessmen, or smugglers, bringing them under the law will restore trust among honest businessmen.
Let’s not forget, the interim government has no political backing, so this is the best time for drastic reforms.
The Investment Development Authority should reduce bureaucratic complexity and truly implement the ‘one-stop service’.
There is no alternative to coordinated, rapid and bold steps to remove the distrust of businessmen and restore an investment-friendly environment.
