Shift in tax policies not helpful for industrialisation process
INVESTORS in the Government Economic Zones (GEZs) have protested a deviation in government duty and VAT policies and particularly a 15 per cent VAT on lease rent in the economic zone areas. They are afraid such shift will dump investment proposals of over US$ 20 billion by local and international companies and jeopardize creation of at least six million new jobs.
Over two dozen local conglomerates which invested in the GEZs in a letter to Prime Minister's Office sought her intervention to remove a set of obstacles in the new budget which include limiting access to bank loans and uncertainty over continuation of many existing privileges. They have demanded simplification of loan procedures for industrial units in EPZs areas.
The government is now setting up 100 economic zones across the country and local and international investors said the change in tax policies will unexpectedly increase investment cost. They have also cast doubt on whether they can enjoy tax holiday as provided for industrial units regardless of type of products manufactured in GEZs areas.Â Â
Need to be mentioned that a section of bureaucrats are misleading the government giving wrong advice on such sensitive issues to be on good book of the policy makers. The policy makers are also stepping into the wrong path not fully aware of its negative impact on rapid industrialization of the country which is so important to create jobs for millions entering into the job markets and returning from abroad.
Investors said the government can't deny facilities that were promised earlier. They have therefore rightly urged the government not to withdraw any incentive or impose any additional direct and indirect tax on investment after they decided to invest based on declared incentives. It's a breach of confidence.Â Most important why the government takes such decision keeping the stakeholders in the dark is not clear. Such unpredictable policy shift may also discourage multinationals companies from coming into Bangladesh as they are now shifting investment from China to many countries in the region.
The FBCCI, the apex body of the country's trade and industries has rightly demanded transparent, predictable and consistent policies to promote investment. We also want to say that sudden shift in policies is unacceptable which will only harm the country's industrialization process.