Salman said tax reduction for the investors will ease them to come in but Bangladesh's tax-GDP ratio is lowest in this region
Prime Minister's Private Industry and Investment Adviser Salman Fazlur Rahman on Saturday said the government is working on policy reforms, aiming to attract more foreign direct investment (FDI).
"Almost at all top levels of the government, there has been a realization that we need to change the mindset to reform," he said while addressing a webinar.
Salman said tax reduction for the investors will ease them to come in but Bangladesh's tax-GDP ratio is lowest in this region. "We need to widen our tax net to ease burden on the existing taxpayers."
Now this mindset needs to be passed to the field officers who will actually play the role in implementing it at the field level, he added.
Salman said BIDA has made a tremendous progress in One Stop Service and it is true that automation will ensure transparency and stop corruption.
He also said the government is working hard to improve in the ease of doing business index and set a target to come down to double digit by the next year.
Salman said they will reform the bankruptcy law and companies act soon.
The tax regime will also be redesigned soon comparing with other countries, he said. "Our Market Capitalization to GDP ratio is also low, he added."
He emphasized diversification of products to boos export and termed agro-processing sector is the most potential sector to invest. "We want to make a level-playing field for all investors. Deepsea port will open up a new horizon and improve our competitiveness," he said.
Dhaka Chamber of Commerce & Industry (DCCI) organized the webinar on "Implications of Covid-19 on FDI inflow to Bangladesh: Challenges and Way Forward."
Executive Chairman of Bangladesh Export Zones Authority (BEZA) Paban Chowdhury joined it as special guest. Ambassador of Japan to Bangladesh Ito Naoki joined as guest of honour.
Chairman of Policy Exchange Dr M Masrur Reaz presented the keynote paper. DCCI President Shams Mahmud moderated the webinar.
DCCI President Shams Mahmud said the 7th five-year plan targeted $9.6 billion FDI inflow annually by FY2020, but they remained behind the target.
He said the FDI to GDP ratio in Bangladesh is 1.2 percent less than India, Sri Lanka, Vietnam and Cambodia.
Out of total FDI stock, the country received highest $3.8 billion FDI in Gas and Petroleum sector where the USA is the largest investor with $3.60 billion followed by the UK, South Korea, the Netherlands, China and Japan.
According to World Investment Report 2020, Global FDI flow is projected to decrease by 40 percent in 2020 to $1 trillion from $1.54 trillion in 2019 due to Covid-19. Due to Covid-19, developing economies like Bangladesh is expected to witness the sharp fall in FDI as well.
In the post-pandemic state, to attract FDI inflow, the DCCI President suggested to strengthen local backward linkage, adopt timely policy reforms and inter-agency coordination.
To harness the investment relocation and export opportunities opened up due to pandemic, improvement of investment ecosystem, faster completion of mega infrastructure projects and public-private fraternity are needed.
Shams Mahmud also termed some of the crucial measures to be provided like equal fiscal and non-fiscal facility, accelerate multilateral regional economic ties aligning with ASEAN, Big-B and one belt one road initiative and making the EZs competitive.
He also invited US and Japanese investors to invest in conventional manufacturing, service sectors and diverse infrastructure works.
Dr M Masrur Reaz, Chairman, Policy Exchange said that according to UNCTAD, global FDI will plunge 40 percent in 2020 and another 5 percent to 10 percent will drop in 2021.
Global FDI will fall short to $1 trillion benchmark for the first time since 2005. Moreover, developing countries of Asia may face lower investment flows up to 45 percent, he said.
President, AmCham, Syed Ershad Ahmed said they want a hassle-free support from NBR.
Chairperson, BUILD & former President, DCCI Abul Kasem Khan said that in the post-Covid era Bangladesh needs to frame out a strategy to grab FDI in the healthcare sector.