UK seeks fair treatment in terms of taxation for its investors

The United Kingdom (UK) has sought fair treatment, in terms of taxation, for its investors in Bangladesh, officials said.

It assured Bangladesh of duty-free and quota-free (DFQF) access of its goods and services to the UK market even after leaving the Europe Union (EU).

To this end, British minister for international trade Dr Liam Fox recently wrote to his Bangladeshi counterpart Tipu Munshi.

He committed increased British investment if steps are taken to improve business environment in Bangladesh.

"A fair application of tax rules and regulations would ensure UK firms were treated the same as their Bangladeshi counterparts," Dr Fox said, seeking an action.

"This would give confidence for UK firms to invest. Not just in the banking sector, which would help both the UK and Bangladesh economies to grow."

According to him, the UK is Bangladesh's second-largest inward investor after China, with over $372 million invested in 2018.

"I think that reflects the strength of the opportunities UK businesses see in Bangladesh," the British minister said in his letter.

"But I would like this figure to increase even higher and encourage more UK investors and exporters to enter the market," wrote Dr Fox.

He also wrote that the current UK-Bangladesh trade imbalance is around 2.4 billion pound sterling "and I would like to see this close".

The British minister said there are over half a million of Bangladeshi heritage in the UK and the people-to-people links between the two countries are strong.

"We are seeing this show up as members of the diaspora start looking at business opportunities in Bangladesh."

The UK has export finance scheme to help diaspora members which recently increased its credit limit from 150 million pound to 650 million pound to support exports to Bangladesh.

A senior commerce ministry official said Bangladesh welcomes investment from anywhere in the world and offers benefit as much as possible for the country to do so.

A hundred economic zones are planned. Some of them are under construction to get both local and foreign investments, he told the FE.

Tax measures and benefits vary from one industry to another here, he said, adding: "Providing same tax treatment for British investors like the domestic ones may be very tough."

"We will, however, send the British proposal to the revenue board to check whether they can be given the similar treatment," the official said.

When asked on Thursday, Centre for Policy Dialogue (CPD) research director Dr Khondaker Golam Moazzem said Bangladesh has no country-specific tax policy, rather a general policy for all.

Statistics show the UK's major investment in Bangladesh goes to banking followed by textile, power, food, agriculture and chemical, he added.

Corporate tax in banking is very high. So, the UK feels its investment is affected, Mr Moazzem told the FE.

The financial reporting system here is very weak. But foreign companies strictly follow compliance in this case, he cited.

"We need to maintain transparency in financial reporting to ensure equal investment environment for all," Mr Moazzem noted.

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