5-year tax policy to reassure investors on policy continuity: Bida chief

Highlights:

• Investor confidence requires sustained policy signals.
• Energy crisis needs long-term government intervention.
• Implementation remains the biggest policy challenge.
• Government prioritises reaching businesses and investors.

The government's decision to announce a five-year tax policy roadmap in this year's budget is intended to reassure local and foreign investors about Bangladesh's commitment to policy continuity, Bangladesh Investment Development Authority (Bida) Executive Chairman Chowdhury Ashik Mahmud Bin Harun said today (6 August).

Responding to questions from reporters after the "Bangladesh Investor Budget Briefing: Investment-related Budget Outcomes" programme in the capital, he said investors have long cited the lack of policy continuity and political uncertainty as their two biggest concerns about Bangladesh.

"Foreign investors and the media regularly asked us what the biggest obstacles to investment in Bangladesh were. Their main concerns were that there was no policy continuity and no political continuity in Bangladesh," Ashik said.

"Through the budget, the government has tried to send a strong message that it is committed to maintaining policy continuity," he added.

The budget was an important way for the government to signal its long-term policy direction, he said, adding that winning investors' confidence cannot be built overnight.

"It is not that if I give a signal today, billions of dollars of investment will come tomorrow. It is a long-term process. If we give the same consistent message once, twice and three times, investors will then begin to believe that Bangladesh is genuinely committed to implementing what it says," the Bida chief said.

He further said the budget not only introduced tax incentives for different sectors but also demonstrated the government's commitment to pursuing long-term policies.

Describing the five-year tax policy roadmap as unprecedented for Bangladesh, Ashik said no one would have expected the government to announce such a long-term tax framework even six months ago.

"Bangladesh has never provided this kind of long-term policy guidance before. We see it as a test case," he said, adding that moving from no long-term roadmap to a five-year framework marked important progress and could be expanded further in the future.

Energy crisis remains a key concern

On the energy crisis, the Bida chief said the government is treating the energy and gas shortages as a matter of top priority, but the crisis cannot be resolved overnight.

"We all know where the problem lies, and the government is working on it continuously. There is no immediate solution, so the focus must be on implementing long-term solutions as quickly as possible," he added.

He also said the government was considering ways to support investors affected by the gas shortage.

According to Ashik, the issue was discussed at a recent meeting of the Bangladesh Economic Zones Authority (Beza), where participants highlighted the difficulties facing industries whose production has been disrupted by inadequate gas supply.

He further said many businesses continued to repay bank loans despite being unable to obtain gas, and the government was actively considering whether relief could be provided through waivers or reductions in government fees and service charges.

Implementation remains the biggest challenge

Responding to a journalist's question, The Bida executive chairman said implementation of policy decisions remains the biggest challenge.

He cited a recent meeting with entrepreneurs in Rajshahi, where many small business owners said they were unaware of various Bangladesh Bank incentives and loan facilities.

He also referred to a business owner who said customs officials were unable to provide the benefits of a newly introduced policy because they had yet to receive the necessary instructions.

"In the digital age, this should not happen. These incidents show that policy decisions still take time to reach the field level," Ashik said.

He also said the government would work to identify such bottlenecks and ensure policy decisions are implemented more quickly.

Responding to a question, Prime Minister's Adviser on Posts, Telecommunications and Information Technology Rehan Asif Asad said, "Implementation and effective execution are absolutely critical.

'No matter how good the policy or budget measures are, they will only deliver results if they are effectively implemented. The government fully recognises this, and successful implementation will determine whether the intended benefits reach businesses and investors."