Key business leaders yesterday urged the government to take action to end the harassment businesses face from VAT and tax authorities and extend the loan moratorium period to help them to recover from the coronavirus pandemic.
Some 40-50% of businessmen will become defaulters if the loan repayment period is not extended until at least June 2024, as most of them are in loss-making or turnaround operations.
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“Government should extend loan repayment period for business survival,” said Md Jashim Uddin, Chairman of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
He was addressing a group of businessmen from across the country at a Chamber Presidents Council 2022 exchange of views meeting at the federation office in Dhaka.
At the meeting, senior leaders spoke out against the harassment they face from the tax authorities.
Rizwan Rahman, chairman of the Dhaka Chamber of Commerce and Industry (DCCI), said harassment of businessmen at the hands of VAT and tax authorities has not stopped even 50 years after independence of the country, although the private sector contributes more than 82% to the economy.
Mr Masud, chairman of the Laxmipur Chamber of Commerce and Industry, said VAT and income tax officials were harassing businesses in the name of compliance.
He suggested the government introduce 2.5% and 3% VAT brackets.
Naser Ezaz Bijoy, president of the Foreign Investors Chamber of Commerce and Industry, said digitizing tax and VAT collection could put an end to harassment.
Mojibur Rahman Belal, president of the Kishoreganj Chamber of Commerce and Industry, alleged that tax and VAT officials were harassing businessmen in various ways.
“Many small entrepreneurs have turned into street vendors as they have lost their businesses due to Covid-19 and harassment from tax and VAT authorities.”
Extortion is higher at the district level than in other cities, said Md Saiful Islam, president of the Metropolitan Chamber of Commerce and Industry.
Jashim said the FBCCI will soon hold eight seminars in the eight division cities with businessmen and National Revenue Authority officials to raise awareness and end the harassment.
At the meeting, chamber and association leaders demanded an immediate and equal disbursement of funds for small businesses from the government-sponsored stimulus fund so they can survive.
Almost all the presidents of district chambers and business associations said that although small, micro, small and medium enterprises have been the worst victims of the pandemic, most of them have not yet received support from relaunch.
Only 20% of the Tk 22,000 crore stimulus unveiled for SMEs has been disbursed by banks, while the allocation for large units has already been disbursed.
“Banks don’t want to lend to small units because they are not financially sound,” Jashim said.
A list of 2,200 small and medium enterprises has been sent to apply for stimulus loans from Kishoreganj district. However, only eight companies were able to get loans, said Belal of the Kishoreganj Chamber.
Local businesses have also called for one-stop services for them, as they have to obtain licenses from 33 different government offices, which is costly and time-consuming.
DCCI’s Rizwan Rahman suggested separating craft and micro-enterprises (CMEs) from small and medium-sized enterprises (SMEs) to support them appropriately.
The government should include private sector views when drafting income tax law, VAT law and industrial policy, he said.
Anwar Ul Alam Chowdhury Parvez, chairman of the Bangladesh Chamber of Industries, said if the proposed gas price is enforced, the cost of production will increase and companies will not be able to make any profit.