It’s not unusual that among the top 526 tax-payers in the 2022-23 financial year no major businessman hogs the headlines. The late Kaus Miah, a tobacco business owner, topped the individual tax-payer list for five years in a row and had been tax compliant since 1958.
Few knew of him at a national scale simply because he didn’t want to be in the glow. No trappings for him, no fancy offices or over-exuberant display of wealth. Likewise, he wasn’t one to hobnob with the powers-that-be who would wail over being cash strapped during Covid-19. In fact, he appeared reluctant to advise or suggest governments on better tax and duty claims.
Compare that with other other businesses which would have us believe that they simply couldn’t survive without sops and duty cuts. Their arguments were always about survival and hardly ever about governments reaching revenue targets -- the essential coffer for national development. It reached sorry levels when former MP Abdul Salam Murshedy claimed as a BGMEA executive that Eid bonuses couldn’t be paid to the workforce without loans. The government held its ground and the bonuses were paid by and large.
During the Covid-19 pandemic the government handed out a significant stimulus package to the RMG sector, followed by nearly Tk5,000 crore in 2022-23. While the Covid scenario was, to an extent, acceptable, the most recent demand for nearly Tk3,000cr in loans just to pay workers doesn’t resonate. As for payback, the usual phenomena is to ask for rescheduling and even interest waivers. It’s almost as if the BGMEA doesn’t earn anything and just lives day to day.
Statistics can be misleading. Export earnings inflow from the sector looks at sales value without deducting the outflow from imports. Whatever gets accrued is, at best, value addition. The areas of over and under-invoicing adds to the murky scenario.
As always the industry, joined lately by Beximco and S Alam Group, are brandishing the ace of unemployment and inability to pay wage bills unless they are granted additional loans. Political governments, infiltrated as they were by groups of these businesses, always gave in. It’s a sticky situation for the interim government. To prevent mass unrest, workers and business owners have agreed to an 18-point charter of demands that puts additional pressure on the RMG industry.
It is perhaps a matter of time before businesses come forward with proposals for loans and support to meet this demand. Without question there will be many organizations which will find it difficult to meet the additional pressure on their income sources. In general, the industry has been infamous for not remunerating the workforce in time. That employees have to take to the streets to get what’s due to them is abominable. Business owners have the government to run to; the workers don’t have that privilege.
There are uncertain times ahead. The new arrangements do, to an extent, match earnings by blue-collar individuals in the unstructured world but will come head-to-head with salaries paid to the more white-collar employees. That’s a vicious circle that has to be addressed sooner than later.
Coming back to big businesses, the question has to be about how they manage their concerns professionally. A short period of downturn must be provided for before gleaming profits are either syphoned out of the country or spent in vulgar display of opulence. More solid businesses outside of homegrown multinationals, such as Walton, displayed both business sense and sensibility by not withholding payouts to employees during the sad, dark days of Covid. Just as sad is that the SME industry -- which provides the bulk of jobs -- doesn’t have an effective or persuasive platform to air their issues. Repeated government persuasion to banks and financial institutions to support SMEs has mostly been responded to by lip service. And, as always, the case of women entrepreneurs remains discordant.
The interim government is rightly putting on a brave face in the midst of an economy that’s going south. At the same time, reality too has to be acknowledged and visible steps taken to make things more bearable.
Mahmudur Rahman is a writer, columnist, broadcaster, and communications specialist.