Incongruity between market demand and education system, lack of skilled workers and professionals, inadequate infrastructure, and low tax to GDP ratio are also a big challenge for Bangladesh economy
Business leaders on Saturday said bureaucrats are making business difficult. Government processes are often cumbersome and different government departments have little coordination, making it difficult for businesses.
Among the reasons behind the country's poor performance in the ease of doing business, there are high interest rates, delay in customs clearance, high rate of corporate tax, additional times needed in filing tax returns, registering land and getting approval for beginning construction, and complexities in getting VAT refund.
Moreover, factors such as incongruity between market demand and education system, lack of skilled workers and professionals, inadequate infrastructure, and low tax to GDP ratio are a big challenge for Bangladesh economy.
The business community came up with the observation at a seminar styled "Ease of Doing Business: Way forward" organised by the Bangladesh Chamber of Industries in a city hotel on Saturday.
There is a serious lack of coordination among the officials at different regulatory bodies in the country, opined former president of the Bangladesh Chamber of Commerce and Industries Shafiul Islam Mohiuddin.
Sharing an experience, Shafiul said, "After importing raw material from China, a local business firm submitted all necessary documents to the customs department seeking clearance of the goods.
"Even after availing permission from a commissioner, he had to wait for an additional seven days due to noncooperation from an official junior to the commissioner. It took him 22 days to get the customs clearance for his shipment, though all the documents he submitted were alright."
"Such allegations are raised before us every now and then," he added.
Pointing out that high-ups in the government offices clear the files quickly due to government directives, but officials at the lower levels lengthen the process, Shafiul said, "Small businesses cannot communicate with the chiefs of government offices even if they want to. There is a lack of coordination in this regard.
"For this reason, no positive outcome is being observed in the ease of doing business."
Bangladesh ranked 168th among 190 countries in this year's ease of doing business index published by the World Bank. The country ranked the 176th in the previous year's index. Among the South Asian countries, only Afghanistan ranks behind Bangladesh.
Representatives from the business community said a businessperson has to spend on average 450 hours per year for filing tax returns, 250 days for land registration, and 270 days for getting approval to begin construction.
The tax refund procedure in Bangladesh is very complicated, claimed Japanese Ambassador to Dhaka Hiroyasu Izumi.
He said, "In order to make improvement in the ease of doing business index, Bangladesh will have to facilitate both local and foreign business firms equally, to help the foreign firms become more competitive. The country will have to resolve issues regarding taxation.
"Japan is ready to provide Bangladesh with all necessary support in this regard."
Participating in an open discussion at the seminar, the Federation of Bangladesh Chambers of Commerce and Industry's (FBCCI) Vice President Rezaul Karim Rejnu, Agro Processors' Association Vice President Syed Mohammad Shoayeeb Hasan, Light Engineering Association President Abdur Razzaque and others pointed to different issues such as bureaucratic complexities, high interest rates, delay in customs clearance, high rate of corporate tax, additional times needed in filing tax returns etc.
In response to the complaints raised by the businessmen, Commerce Minister Tipu Munshi said, "Being a businessman, I know it well that businesspersons are facing difficulties in running their businesses. We will have to take measures to make the doing business easier."
Regarding the prevailing problems in the readymade garments (RMG) sector, the commerce minister said, "It is bad news for us that we have moved one notch down to the third position in apparel exports this month.
We have already held discussions with all concerned ministries and departments regarding this issue. We hope Bangladesh will regain the second position soon."
Referring to Bangladesh's position in the ease of doing business, Chief Coordinator on SDG Affairs of the Prime Minister Office Md Abul Kalam Azad said, "Bangladesh's performance in ease of doing business is not that bad as it has been shown in the index.
"Our failure was that we could not do well in the criteria set by the World Bank."
Bangladesh Investment Development Authority Chairman Sirazul Islam acknowledged that Bangladesh lags behind its competing countries in terms of time for starting a business, registering land, and beginning construction.
He said, "We will sit with all departments concerned and will try to find out the problems and their solutions in every sector."
He, however, said the country needs to work on skill development of the labour force before everything else.
In response to the allegation that the rate of corporate tax is high in Bangladesh, the National Board of Revenue (NBR) Chairman Mosharraf Hossain Bhuiyan said, "From our research we have found that the tax rate is not high in Bangladesh. The main problem is the number of companies listed with the stock market is very small."
He also said the NBR is working to make the refund procedure easier and to modernise the customs department. Scanners are being installed at ports to make customs clearance quicker.
Bangladesh Chamber of Industries President Anwar-Ul-Alam Chowdhury presented the keynote paper at the seminar. Bangladesh Women Chamber of Commerce and Industries President Selima Ahmad spoke as special guest.
Addressing the seminar, Dr Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies said the curriculum has not been designed in line with the job market demand.
"Curriculum will have to be designed keeping in mind that students can become a skilled worker after studying up to class eight or class nine," he added.
She also called for ensuring monitoring over the National University education. Most of the people lack necessary skill in English language even after completing honour's and master's levels of education, she said.