Foreign investors seek policy execution in ’22

Being one of the preferred investment destinations, foreign investors plead for sector-specific long-term policies to be tailored in the best interest of fresh investment in Bangladesh.

In addition, they want that a series of policies offered be actually implemented to all intents and purposes at field level, and a rational corporate tax rate in conjunction with that in the South Asian region.

The Business Post talked to a number of foreign investors to feel their pulse about investment in Bangladesh on the eve of the New Year.

“The opportunities to do business in Bangladesh are extremely good. The consistent growth of economy with strong labour force and focused policy support has enabled the country to be an attractive investment destination,” opined British American Tobacco Bangladesh (BATB) Managing Director Shehzad Munim while sharing his view with The Business Post.

“Yet, not many investors are aware of the plethora of benefits and opportunities existing here. First and foremost, a focused campaign is required to raise awareness among potential global investors.”

To emerge as a big export hub beyond the RMG sector, different kinds of investment opportunities are needed, he suggested, adding that sector-specific tailored policies and stimulus packages are notable.

Echoing the same, Shah Muhammad Ashequr, head of Finance and Business Management, Bangladesh Honda Private Limited, said the government offers auspicous policies to promote foreign investors but there are gaps in execution and offer.

“There needs to have strong consistency between policy and its execution at field level. Investors will feel comfort to make investment if rules and policy supports are effectively implemented,” he argued.

Ashequr held that there is tax rebate, but in most cases, investors cannot realise that due to bureaucratic complexity; besides, foreign investors find tax rate as a great barrier to expanding businesses as well as making new investment in Bangladesh.

According to BATB Managing Director Shehzad, corporate tax rate in Bangladesh is still very high, and over the years, the government has cut the rate, but that is not on a par with other South Asian countries.

“This issue needs to be addressed to channel more investment. Furthermore, what we need is consistency in tax regulation and a clear roadmap about tax rate and its simplification for the next 5-10 years,” he made an assertion.

Robi Axiata Limited Chief Corporate and Regulatory Officer Shahed Alam viewed that despite a big investment, the returns in telecom sector are far from being satisfactory.

He admitted that there is an exciting prospect for telecom sector here, but the tax regime is unfortunately choking the industry.

One of the most unjust parts of the tax regime for the sector is the 2 per cent minimum turnover tax, he pointed out, saying that the telephone companies have to pay 2 per cent of their revenues to the tax authorities whether or not they make any profit, which in turn raises the tax rate to around 72 per cent of total revenues.

“We want reformation to such tax policy to allow the telecom sector for sufficient breathing space,” maintained Shahed.

Investment focus in 2022

In the wake of the pandemic, new investment as well as its expansion faltered, but the ease over Covid-19 situation, a new window of investment is likely to open. Giving an outline of their 2022 investment focus, the Robi official said network expansion and fiber connectivity are the key areas which they would specially address in order to bring back Robi subscribers lost during the pandemic period.

“What we would like to do for our new investment focus is explore newer horizons such as joining trade blocs like ASEAN since Bangladesh is on the path to become a middle-income country,” explained Shehzad.

Foreign investment status

According to the Bangladesh Bank (BB) data, during January-June period of 2021, the country received $ 1.13 billion foreign investment, which was $ 1.18 billion in the same period a year ago.

Of the investment, $ 307 million was equity, $ 734 million reinvestment and $ 196 million intra-company loan.