The Finance Ministry needs to realize that private investment is crucial to our future economic progress
The newly unveiled budget heralds a much needed shift in the priorities for our country -- the fact that one-third of the entire budget is being allocated to the development of women speaks volumes.
But while the Finance Ministry deserves every bit of the praise it has been receiving in formulating a budget that is so forward-thinking in so many ways, one key issue rightly pointed out by the Metropolitan Chamber of Commerce and Industry (MCCI) is the need for policy which could help raise private investment in Bangladesh.
To that end, MCCI’s observation that Bangladesh’s economy “is progressing well, but below its true potential” rings very true.
Our RMG industry, the primary engine of our economic growth, is perhaps the best example of how far a country can go when the private sector is allowed to flourish at the right time; the same applies to numerous other burgeoning industries that are helping bring in much-needed FDI to our country.
In order to maintain this growth trajectory, it is imperative that the administration make some urgent policy reforms, consider simplifying the existing taxation system, and adopt business-friendly policies such as increased incentives and a blanket reduction in corporate tax.
And hence, proposals such as a 5% sales tax on what the budget describes as “virtual businesses” could prove to be somewhat problematic, considering our aspirations to flourish in the IT sector.
Bangladesh has come a long way, but there are still daunting growth challenges ahead of us if we are to reach developing country status. The Finance Ministry, and any other administrative body concerned, needs to realize that private investment is crucial to our future economic progress.