Incentives add new bait to lure investment

Dhaka,  Fri,  22 September 2017
Published : 13 May 2017, 22:44:00

Incentives add new bait to lure investment

Syful Islam

The government is rearranging the incentive packages offered to attract investments into various economic zones and export-oriented sectors, with some new bait.

Officials said the move has been made to adjust differences and inconsistencies among the facilities extended to raise both local and foreign investments into the country.

At this stage, the Prime Minister's Office (PMO) recently formed an inter-ministerial committee to prepare a list of the investment-pulling facilities.

The committee has been asked to make a coordinated list of incentives offered in export- processing zones, economic zones, hi-tech park, export-oriented and other sectors. It has to submit a report within a month through incorporating recommendations, if any, based on comparative assessment of incentive recipes.

Sources said officials of Bangladesh Investment Development Authority (BIDA) in a recent meeting at the PMO underscored the need for expediting reform process to ensure investment-friendly environment in the country for higher economic growth.

At the meeting they also emphasised coordination among the incentives packages to attract investments, and preparing industrialisation strategies. The PMO formed the committee following the BIDA submissions.

On submission of report by the committee, a high-powered body at the PMO will sit again to bring harmonisation among the incentives packages, officials said. They found various inconsistencies and mismatches among the incentive packages which need to be resolved to make the packages more attractive.

Last August, the sources said, finance minister AMA Muhith asked the national board of revenue (NBR) to issue an office order on six incentive packages to attract private investment under public-private partnership (PPP). However, the office order has not been issued so far except for placing again a memo to the minister by the NBR seeking decision.

A recent meeting at the PMO discussed the issue and the PPP office was asked to consult it with

the NBR, financial institutions division, and the central bank to get its proposals through.  

The PPP office was contemplating offering incentives on several fronts, including minimising tax burden, corporate tax relief, VAT and customs duty exemptions, no cap on single-borrower exposure, and facility for repatriation of sales proceeds on non-resident equity investments.   

Officials noted that, in the recent years, mega-incentive packages on high-tech parks, economic zones, and export-processing zones got approval, meaning that the government prioritises attracting local and foreign investment in increased volumes.
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