Bida proposes deregulation measures to ease business without tax cuts

The Bangladesh Investment Development Authority (Bida) has
recently submitted 20 deregulation proposals to the finance ministry, aiming to
significantly ease doing business without reducing tax rates.
The
proposals, developed through a series of consultations with business leaders,
focus on removing procedural bottlenecks, reducing compliance costs, and
improving predictability in regulatory processes, Bida officials told The
Business Standard.
Business
representatives believe that if implemented, the measures would lower
operational expenses, save time, and boost investor confidence.
Push for risk-based audit
system
A key recommendation is the introduction of a risk-based
audit system to replace the current practice of selecting firms for audit
without clear criteria.
At
present, companies are often subjected to repeated audits immediately after
submitting their audited financial statements, leading to complaints of
unnecessary harassment.
Under
the proposed system, the National Board of Revenue would use predefined risk
parameters – such as abnormal fluctuations in turnover, inconsistencies in
input-output ratios, and repeated refund claims – to automatically identify
firms with a higher likelihood of tax evasion.
This
"automated audit selection" process would allow authorities to focus
enforcement on high-risk cases while reducing pressure on compliant taxpayers.
Reducing reliance on LCs, promoting digital trade
The
report suggests reducing dependence on traditional Letters of Credit (LCs) by
introducing alternative digital payment and settlement methods. Such reforms
could make international trade faster and more cost-effective.
Customs reforms and
global benchmarking
Bida
has also recommended improving transparency in customs valuation by integrating
international price databases alongside domestic references.
To
illustrate best practices, the proposals cite VNACCS – Vietnam's automated
cargo clearance system – which uses real-time data and reference pricing. Under
that model, goods declared within an acceptable price range are cleared
automatically through a "green channel," significantly reducing
delays.
Adopting
similar mechanisms could streamline Bangladesh's customs procedures, cut
bureaucratic complexity, and shorten clearance times, according to the
proposals.
24/7 port operations to
cut logistics costs
Business
leaders identified limited port operating hours as a major constraint. Despite
growing trade volumes, full-scale 24/7 operations are not consistently
available due to restrictions in banking and customs services.
Bida
has recommended round-the-clock port operations, which could help reduce
congestion and lower logistics costs.
In
addition, the proposals suggest allowing up to 80% of import clearance through
off-dock facilities in phases, supported by regular audits and risk-based
monitoring to ensure compliance.
Concerns over
indiscriminate audit, AIT
Speaking
to TBS, Business Initiative Leading Development Chairperson Abul Kasem Khan
said even long-compliant taxpayers frequently face repeated audits, creating
uncertainty and discouragement.
"We
have seen cases where companies with a strong compliance record and even
recognition as top taxpayers are repeatedly audited. This undermines
confidence," he said.
Kasem,
who was a former president of the Dhaka Chamber of Commerce and Industry, also
highlighted concerns over Advance Income Tax (AIT), noting that in many cases
businesses pay more tax than their actual liability, with refunds delayed.
"As
a result, the effective tax rate can rise to 40-50%, putting pressure on
working capital," he said, adding that excess payments should either be
refunded quickly or adjusted against future tax liabilities.
NBR signals support for
easing compliance
Addressing
a consultative committee meeting organised by the NBR and the FBCCI last week
in Dhaka, Finance Minister Amir Khosru Mahmud Chowdhury, said the government is
committed to dismantling the existing regulatory barriers to doing business.
NBR
Chairman Abdur Rahman Khan recently said the government is focusing not only on
tax rates but also on simplifying business processes.
"Our
priority is to reduce unnecessary complexities and make compliance easier so
that businesses can operate more efficiently," he said at a pre-budget
discussion.
















