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The Financial Express

MSMEs need emergency fund at lower interest rate: DCCI to govt

FE Online Report | Published: April 03, 2020 19:54:53 | Updated: April 05, 2020 18:02:33


MSMEs need emergency fund at lower interest rate: DCCI to govt

Dhaka Chamber of Commerce & Industry (DCCI) on Friday urged the government to create emergency fund for micro, small & medium enterprises (MSMEs) amid coronavirus outbreak at a lower interest rate and a grace period.

The DCCI requested the government to create a 3-year long emergency fund with 1.0 per cent interest to support the financially stressed local MSMEs and informal sector for paying salary to their workers.

MSMEs with turnover of TK. 10 million or lower can get loans at 1.0 per cent interest and 2.0 per cent interest for MSMEs with a turnover of over Tk 10 million, according to a statement.

Factories located in the BSCIC industrial parks across the country also need to be brought under this emergency fund for paying salaries and wages and the MSMEs should be allowed one year grace period for this loan, it said.

Bangladesh has undertaken measures to minimise the consequences of this pandemic on businesses as well as public health and created a Tk 50 billion for export-oriented industries.

The coronavirus pandemic has substantially impacted MSMEs across all sectors of the economy. Many MSMEs have been passing distressed time due to limited trade and shortage of funds to maintain business operations and pay off salaries of the employees and workers which causes unemployment.

In a bid to protect the local MSMEs from the serious impact of coronavirus, DCCI urged the government to also come forward with some short and mid-term fiscal and non-fiscal recovery policy plans supports.

In addition, DCCI asked the government to consider waiving all forms of AT and VAT for both import and local stages including food and essentials items, health, hygiene, safety instruments, medical kits and export-oriented manufacturing industry for next six months which will help businesses to turn-around to some extent.

Moreover, DCCI requested for a speedy disposal of AT and VAT credit system as conventional lengthy process keep holds and stuck the cash flow of businesses.

In order to reduce the tax burden of MSMEs, DCCI proposes to defer the submission of income tax of FY20 for impacted MSMEs and entrepreneurs.

Impacted MSMEs are to be facilitated to pay the outstanding income tax splitting into three installments adjusting with tax returns applicable for the subsequent three years without any penalty.

And, it requested for a speedy disposal of AT and Vat credit system as conventional lengthy process keep holds and stuck the cash flow of businesses.

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