Proper utilisation of the proposed fund of Tk 100 crore in the budget for fiscal 2019-2020 is necessary for creation of new entrepreneurs for sustainability of the economy, said the president of Bangladesh Chamber of Industries (BCI) today.
“If we want to make our economy sustainable, we must create new entrepreneurs continuously. Those who are in the micro and small level, their capacity must be improved for the growth of the businesses,” said BCI President Anwar-Ul-Alam Chowdhury (Parvez) at a post-budget press conference at the BCI office in Dhaka.
“A big challenge in creation of new entrepreneurs is funding. Although they are very much focused, however, they cannot be successful entrepreneurs because of lack of fund, guidance, training,” he said.
“If there is a fund, then the elder entrepreneurs, who have a lot of experience, can help the new entrepreneurs grow.”
With the supportive fund from the government, the budding entrepreneurs will be able to build micro and small firms, which could act as the subcontractors for the bigger companies, he said.
If the government wants to take the private investment to GDP to 35 per cent in the next five years, it will need to create a lot of new entrepreneurs and banking facilities, the BCI chief said.
“For instance, thousands of micro and small firms supply small and medium spare parts to the Japanese car making giant Toyota company, which assemble and make the cars. In any economy, 85 per cent contribution comes from the micro and small enterprises,” he said.
“As a result, many micro and small enterprises have grown up in Japan and later these budding entrepreneurs also turned into bigger ones.”
“Grooming up of such entrepreneurs is also possible in Bangladesh as the country’s economy has been thriving rapidly as well as the industrialisation,” he said.
Regarding 15 per cent tax being imposed on retained investment, Parvez said such decision of the government will have a negative impact on the inflow of both domestic and foreign direct investment as well as in the stock markets.
“Most of the time the fund from the retained earnings is used for reinvestment and for expansion of the companies. But this kind of tax will discourage the investors,” he said.
“The banking sector has been passing through a bad time. If the investors feel discouraged during such a time for any reason, the economy may suffer because of lack of inflow of investment,” he said.
Parvez, also a former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), suggested the government for imposing value added tax (VAT) in such a way so that the consumers are not hit hard and the cost of doing business does not increase.
He said the government should allow the 15 per cent VAT if any company wants to reduce the repeating in payment of VAT. For example, the distributing companies have the possibility of paying repeated VAT as they need to move goods from one place to another.
He said if the businesses can run efficiently and the companies can make profit, the government will not face any difficulty in collection of the targeted revenue in the proposed budget for the next fiscal year.
He also suggested the government for withdrawing the advance income tax, 5 per cent VAT on the sale of local yarn and reduction of corporate tax at 10 per cent.