• Tuesday, May 21, 2019
  • Last Update : 12:43 pm

Lower corporate tax to encourage entrepreneurs

  • Published at 11:58 pm April 18th, 2019
Photo: BIGSTOCK
Photo: BIGSTOCK

The fact that Bangladeshi entrepreneurs pay the highest corporate tax among the South Asian countries does not bode well

It is imperative for Bangladesh -- as a nation on the cusp of reaching certain economic milestones -- to ensure that, along with our public sector, our private sector receives all the support possible to be competitive on the global stage, and continues to grow and attract investment from home and abroad.

On that front, the fact that Bangladeshi entrepreneurs pay the highest corporate tax among the South Asian countries -- a rate that is also higher than the global average -- does not bode well.

That the country’s private sector requires some serious reform is something that has been brought to attention many times. Bangladesh ranked 176th out of 190 countries in the World Bank’s ease of doing business report last year, which was the worst rank among South Asian countries, and the high corporate is an additional impediment that limits the full potential of our business sector.

While there is no doubt that a healthy tax system is an integral pillar of a country’s economy, and corporate taxes go a long way in ensuring that public initiatives are well funded and can be executed and completed in a timely and efficient manner, it is essential to have a corporate tax rate that is rational and compatible with the regional rate. 

Businesses and investment will then naturally gravitate towards the places which offer a more favourable business environment, one with more incentives. 

It also goes without saying that the authorities in place must ensure that -- should the corporate tax be lowered -- the gains from the cut are invested productively, be it to generate more employment or contribute to infrastructure or development.