A new requirement mandating a business identification number (BIN) to open business bank accounts and secure expansion loans has hit cottage, micro, small, and medium enterprises (CMSMEs) hard.
Effective from the current fiscal year, the rule has created significant operational hurdles for small business owners who lack a BIN, restricting their access to routine banking services and credit.
According to data from the Bangladesh Bureau of Statistics (BBS), Bangladesh is home to roughly 11.7 million economic units, nearly 99% of which belong to the micro, cottage, small, and medium category.
Employing over 30 million people, the sector accounts for nearly 85% of industrial employment and contributes 25% to 32% to the country’s Gross Domestic Product (GDP).
Acknowledging the hardship faced by small business owners, the Association of Bankers, Bangladesh (ABB) has formally urged the National Revenue Board (NBR) to relax or withdraw the rule.
In a letter sent to the NBR chairman, the ABB highlighted that many small-scale entrepreneurs do not yet possess a BIN and face lengthy delays trying to gather the required paperwork to register.
Consequently, their daily business operations and credit access are severely disrupted.
The ABB proposed exempting micro, cottage, and small businesses from the mandatory BIN requirement.
Alternatively, the association requested a phased implementation approach to allow entrepreneurs additional time to prepare, along with allowing banks to accept existing institutional documents as supporting proof.
However, the NBR stated that it cannot grant the ABB's request.
Revenue officials clarified that the condition is a statutory mandate embedded in the Value Added Tax and Supplementary Duty Act, 2012. Under Sections 4(3)(a) and (b) of the Act, presenting a BIN is legally compulsory for opening or operating current and short-term deposit (STD) accounts, as well as obtaining loans from banks or financial institutions.
A senior NBR official, requesting anonymity, noted that the law applies universally across all business sizes to bring informal activities into the formal economy and expand the tax and VAT net.
Thus, neither banks nor the NBR possess the authority to waive the rule administratively.
Entrepreneurs clarify that their objection lies not in the objective of the regulation, but in its execution.
Shah Poran, a small business owner at Bangshal, pointed out that while applying for a BIN online is straightforward, gathering the prerequisite documentation poses a major challenge.
The complex paperwork and additional expenses often lead to bureaucratic delays and harassment.
He suggested that implementing the law in phases rather than enforcing a sudden blanket mandate would ease the transition for small businesses.
While making BIN mandatory aims to widen the VAT net, industry stakeholders emphasize the need to balance revenue collection with safeguarding the growth and financial inclusion of small enterprises.
