Create safe environment for business

Small traders from Dhanmondi, Mohammadpur, Shaymoli, and Adabar in Dhaka said weak enforcement of law and order, high interest rates, limited access to finance, complex VAT and tax systems, harassment, and lack of automation pose obstacles to investment and business growth.

They noted that these issues, along with severe traffic congestion, are raising business costs, reducing productivity, and stalling investment, which is discouraging new entrepreneurs in the region. They called for urgent government action to remove these barriers.

They made the remarks at an interactive session organised by the Dhaka Chamber of Commerce and Industry (DCCI) on the current business climate and investment outlook, held at Tokyo Square Convention Centre in Mohammadpur on Saturday.

Representatives from Bangladesh Bank, National Board of Revenue (NBR), law enforcement agencies, traffic police, and local traders spoke at the event chaired by DCCI President Taskeen Ahmed, according to a press release issued by the DCCI.

Speaking on the occasion, Taskeen Ahmed said the global economic situation, domestic business challenges, complex tax and VAT systems, foreign exchange issues, delays in export-import processes, and deterioration of law and order are negatively impacting the economy, especially harming SME entrepreneurs.

"Under the current circumstances, there is no alternative to building a safe, stable and predictable business environment," the DCCI president said.

He also said that the DCCI has proposed full automation of revenue management along with rationalising tax rates, introducing a single-digit VAT rate, setting 1 per cent VAT for the informal sector, and launching a VAT return app to boost the business environment and government revenue.

He noted that ensuring easy access to credit, automating export-import activities, and providing timely government policy support are crucial to sustaining industrial growth.

Additional Director of Bangladesh Bank Mohammad Mostafizur Rahman stated that the central bank has recently issued a master circular to boost credit flow to the SME sector. To support businesses, the term loan period has been extended from 5 to 7 years, as investors typically require at least 2 years to establish a factory.

Bangladesh Bank has established a Tk 250 billion fund exclusively for SME entrepreneurs through various schemes, offering loans at a maximum interest rate of 7 per cent. For women entrepreneurs, the rate is 5 per cent, while agro-entrepreneurs benefit from even lower rates.

Md. Milon Sheikh, additional commissioner of Customs, Excise, and VAT Commissionerate, Dhaka (West), noted that 80 per cent of the government's revenue target has been met through NBR, which is challenging. He also highlighted a 15-20 per cent increase in VAT collection in Mohammadpur and its surrounding areas, with 98 per cent of small businesses registered for VAT in the last three months.

He urged SME businessmen not to ignore VAT issues but to familiarise themselves with the details of VAT laws for their own benefit even though it is a complex and technical subject.

Md. Alamgir Kabir, ADC of Police at Tejgaon Zone, said law and order in the area has improved in the last two months. Police arrested around 63 extortionists during block raids on March 27, and recently apprehended 71 miscreants in a single day for various crimes in Mohammadpur area, he added.

He said that 63 patrol teams are active in the area to ensure public safety and urged people to help police with adequate information. Police will provide all possible support to small traders during the upcoming Eid-ul-Adha, he said.

"At present only 632 traffic police personnel are working in the vast Tejgaon zone, which is very difficult to maintain," said Tania Sultana, ADC of Traffic Police at Tejgaon Zone. She stressed the need for increasing public awareness and following traffic rules to resolve traffic congestion. She also said that people have to change their mindset and adhere to the traffic rules.

In the open discussion session, local trade leaders called for easy VAT return submission process, increasing the VAT net, introducing VAT return app, improving law and order situation, controlling extortion, reducing traffic congestion, lowering interest rates, easy access to finance for the SME sector and reducing harassment at all level for the small traders.

DCCI Senior Vice President Razeev H Chowdhury, Vice President Md. Salem Sulaiman and members of the board of directors of DCCI were also present at the event.

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