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Economic zone policies need complete overhaul This year govt presented a budget with a size of taka 6.06 trillion. Government is going to face a revenue shortfall of taka 2 trillion. In addition, govt has to achieve 0.50% increase in revenue collection as part of the IMF's conditions for $4.7 billion credit.It will definitely put huge pressure on the govt,which is facing receding economic activity ahead of next general election. While govt has been drastically searching alleys to augment its revenue earnings, policy loopholes created by it earlier still remain unaddressed. For instance, income tax act(2023) allows clandestine capital investment in economic zones and hi-tech parks with only 10% tax.Nothing else! Authority will not ask how investors earned those money.This scheme will last till July 30 of 2024. Such provision neither brings adequate investment nor opens up new opportunities. Worst, it is keeping at bay good investors who are careful about their reputation. These zones and parks have special tax holidays and other lucrative benefits. Yet they failed conspicuously to attract high-profile tech intensive investment. Furthermore, we have noticed recently misuse of export incentive and increasing incident of corruption. A Chinese company in Chattogram was caught red-handed for intentionally tagging “Made In Bangladesh “ tag to clothes manufactured in China.Subsequent probe revealed it swallowed export incentive reserved for exporters and evaded tax.In the incident of BM Container Depot blast, residential address of Dutch investor /partner was not found at the Board of Investment.BM depot days after days stored hazardous chemicals,putting lives of the surrounding villagers at stake.More recently, hack incident of Krishi Bank website and exposed information of 5 million Bangladeshis in dark web reminds us that we have not taken any lesson from Bangladesh Bank heist,now a major documentary in Hollywood, and allowing clandestine capital in ICT did not improve internet security and business environment. In fact ,it made it worst! I have seen report that divulged how Equity And Entrepreneurship Fund of Bangladesh Bank was misappropriated ,forging documents. Why do we need FDI?Adding new technology,tech transfer,job creation, value addition and boosting economy. For the sake of new technology and tech transfer,we could tolerate investment of black money in EEZs.However, it is absurd to continue it if that does not happen or costs the economy by introduction of new alleys of corruption. Time has come to revamp our tax policies in EEZs and hi-tech park. Full stop on export incentive for bleaching black money in the name of investment. Different tax structures for investors who disclose their source of income and those who prefer not to disclose. The weight of tax collection is so heavy on the govt that it cannot do business as usual in dealing with incentives and investment in EEZs. It should chalk out new strategies to improve business environment in ICT and EEZs and augment the revenue in general.
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