Ensure proper use of start-up fund
Proper utilisation of the Tk 100 crore fund proposed for start-ups and entrepreneurs is necessary for the sustainability of the economy, Anwar-Ul-Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries, said yesterday.
“If we want to make our economy sustainable, we must create new entrepreneurs continuously,” he said at a post-budget press conference at the chamber’s office in Dhaka.
“Those who are in the micro and small level, their capacity must be improved for the growth of the business.”
Funding is a big challenge in creation of new entrepreneurs who have strong focus on what they want to do, he said. However, they fail to become successful entrepreneurs due to lack of fund, guidance and training, Parvez said.
If there is fund, the elder entrepreneurs can help them to grow as they have a lot of experience, he said.
“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.”
If the government wants to take the private investment to GDP ratio to 35 percent in the next five years, it will need to create a lot of new entrepreneurs and banking facilities, he said. For instance, thousands of micro and small firms supply small and medium spare parts to the Japanese car making giant Toyota, he said. “In any economy, 85 percent is contributed by the micro and small enterprises.”
The government’s decision to impose 15 percent tax on retained earnings will leave a negative impact on inflow of both domestic and foreign direct investment as well as in the stock markets, he said.
Most of the time the fund from retained earnings is used for reinvestment and for expansion of the companies. But this kind of tax will discourage the investors, he said.
Any company should be allowed to pay 15 percent VAT if it wants to avoid paying repeated taxes, he said. For example, the distributing companies have the possibility of paying repeated VAT as they need to move goods from one place to another.
He also suggested the government withdraw the advance income tax along with 5 percent VAT on sale of local yarn and reduce corporate tax to 10 percent.
