POLICY ADVOCACY OF FBCCI

 

Policy support from Government to face the Covid-19 impact

  1. FBCCI was engaged with the Hon’ble Prime Minister’s Office, Ministries of Finance, Commerce and Bangladesh Bank and solicited immediate non-fiscal support mechanism from the Central Bank including extension of maturing LCs and back-to-back LCs, overdue payments, scheduled installments, and enhanced emergency liquidity for factories.

 

Reactions of the Government to plea of FBCCI were very positive. Bangladesh Bank unveiled a stimulus package including easing of foreign exchange rules for foreign trade and loan classification to help businesses ride out the storm of the pandemic. Bangladesh Bank advised the scheduled banks to suspend adverse classification of loans till June 30, 2020 from the states of January 01, 2020 to facilitate business activities in view of the corona virus outbreak.

  1. FBCCI President requested Ministry of Finance on 23 February 2020 for taking special measures for loan assistance and repayment of bonds so that import and export activities are not hampered due to payment overdue during covid-19 pandemic. FBCCI proposed that if a business organization provides the necessary documents to the bank, their account should not be classified in any way and additional charges, interest should not be penalized. FBCCI also urged for short term loan facility outside the LC limit if there is any scope to import from any other sources.
  2. FBCCI President on June 08, 2020 requested Bangladesh Bank for extension of non classification or penalizing business loans till April 2021. Considering economic recovery realities FBCCI requested moratorium and interest blocks till April 2021 in phases, first till December 2020 then if needed till April 2021 to avoid alarming loan classifications in phases, increasing in alarming NPL, securing banks investments as the block interests and loans to be paid back to the banks through restructuring for longer term as economic recovery move towards normalcy.

 

Policy Advocacy to facilitate smooth implementation of Stimulus Packages

 

  1. FBCCI requested Bangladesh Bank vide letter dated March 16, 2021 for further extension of period up to June 30, 2021 of the following Circulars of Bangladesh Bank considering economic recovery realities of the country:

 

  1. FE Circular No. 16 dated March 23, 2020 on import of industrial raw materials – extension of usance period- valid up to March 31, 2021.
  2. FE Circular Letter No. 18 dated April 26, 2020 on Import of Agricultural implements and chemical fertilizers- valid up to March 31, 2021.

 

Bangladesh Bank extended facilities of the above circulars till June 30, 2021 (Bangladesh Bank FE Circular -12 dated March 24, 2021)

  1. FBCCI requested Bangladesh Bank vide letter dated April 2, 2020 to form a joint Committee of Bangladesh Bank and FBCCI to work on AD Branch, export import activities during the covid-19 situation.

Bangladesh Bank formed a joint working committee of Bangladesh Bank and FBCCI and also selected focal points to work with FBCCI.

  1. FBCCI worked with the Ministry of Finance and Bangladesh Bank to facilitate smooth implementation of the packages provisioned and to simplify the loan receiving procedures to CMSMEs and to ensure disbursement of fund within the minimum lead time. As inclusive approach FBCCI and other Chambers & Associations are assisting businesses and CMSMEs to large industries in loan KYC recovery.

 

Considering the plea of FBCCI, The Bangladesh Bank advised all banks and non-bank financial institutions (NBFI) to ensure simplicity in every stage and quick disposal while considering loan applications of the CMSME under the stimulus package. To make the loan receiving procedures smooth for the CMSMEs from the Tk. 20,000 crore stimulus packages, the central bank on April 30, 2020 issued a circular, giving a set of instructions in this regard.

Bangladesh Bank also suggested that if found necessary, Banks or NBFIs take support from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and other Associations affiliated with the FBCCI for the selection of borrowers, loan dissemination and its supervision, and to carry out recovery activities.

  1. FBCCI requested for extension of non-classification of loans till March 2021 considering economic recovery realities and negligible execution of stimulus loans. FBCCI President vide his letter dated August 31, 2020 to Governor of Bangladesh Bank made the request. Bangladesh Bank extended loan repayment facilities till December 31, 2020.

 

FBCCI as out of initial advocacy on March 24, 2020 vide letter dated December 28, 2020, requested for extension of non-classification of loans till June 2021 considering economic recovery realities and negligible execution of stimulus loans. Bangladesh Bank extended loan repayment facilities till June 30, 2021. (Bangladesh Bank Circulars: BRPD-5 dated March 24, 2021, DFIM Circular -3, dated April 20, 2021)

 

  1. FBCCI requested Bangladesh Bank vide letter dated September 30, 2020 for extension of period of the following moratoriums, CSMEs Circulars of Bangladesh Bank considering economic recovery realities of the country:

 

  1. FE Circular No. 15 dated March 23, 2020 on advance payment against imports of life saving drugs, etc.-valid up to September 30, 2020.
  2. FE Circular No. 16 dated March 23, 2020 on import of industrial raw materials – extension of usance period- valid up to September 30, 2020.
  • FE Circular No. 17 dated March 24, 2020 on import of life saving drug- extension usance period- valid up to September 30, 2020.
  1. FE Circular No. 19 dated April 12, 2020 on refinancing for imports against usance back to back LCs- valid up to September 30, 2020.
  2. FE Circular Letter No. 11 dated April 12, 2020 on quarterly repayment for imports under supplier’s/buyer’s credit-relaxation- valid up to September 30, 2020.
  3. FE Circular Letter No. 18 dated April 26, 2020 on Import of Agricultural implements and chemical fertilizers- valid up to September 30, 2020.
  • FE Circular Letter No. 25 dated June 24, 2020 on settlement of payment against inland LCs in foreign exchange- valid up to September 30, 2020.

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Bangladesh Bank extended the validity of the above Circulars till March 31, 2020 (FE Circular -43 dated Oct 6. 2020).

Port related Issues

 

  1. FBCCI worked with concerned Ministries of Shipping for smooth functioning of ports, waiver of detention charges of containers, exemption of the store rent (demurrage charge) of air cargos and waiving container shipping agent late charges during the public holiday of Covid-19 in 2020.

 

Additional charges and penalties on import and export containers were withdrawn by Ministry of Shipping and storage charges of all imported cargos were withdrawn by Ministry of Civil Aviation and Tourism. Shipping Lines were also directed not to impose any container detention/ demurrage charge on import and export shipments.

 

National Budget related Issues

 

  1. FBCCI submitted Budget proposals for FY 2020-21 to the National Board of Revenue (NBR) vide letter dated April 12, 2021.

 

FBCCI emphasized on invoice based bank to bank transaction to increase tax net and removal of AIT and AT, smooth procedures for adjustment of AIT , automated and integrated system for tax, VAT and income tax,  VAT based on value addition,  income tax based on income, reduction of corporate tax through cost benefit analysis & opportunity cost assessment by scientific methodology, etc.

 

  1. FBCCI submitted proposals for the National Budget FY 2020-21 to the Hon’ble Finance Minister vide letter dated April 13, 2021.

 

FBCCI emphasized on invoice based bank to bank transaction to increase tax net and removal of AIT and AT, smooth procedures for adjustment of AIT , automated and integrated system for tax, VAT and income tax,  VAT based on value addition,  income tax based on income, reduction of corporate tax through cost benefit analysis & opportunity cost assessment by scientific methodology, etc.

 

  1. FBCCI submitted FBCCI Abstract on 2020 Budget to Hon’ble Finance Minister vide letter dated May 11, 2020.

 

The budget abstract was prepared on the members’ recommendations and through stakeholders, academics and economists inputs. Major issues of the abstract were as follow:

AIT rate should be revised from 5% to 3% which should be adjusted. AT should be withdrawn on industrial raw materials and for other products it should be adjustable through proper mechanism without delay. Numerous AT is pending adjustments. Source taxes are considered variable in costing hence creates inflationary effects to end users. In a slower economic realities, rebatable Vat needs to be revised to 10% from 15% while Vat on turnover of 3 crore BDT should be revised to 2% from 4% and other non rebatable multiple rates needs to be revised. Non rebatable multiple rates add on costs which creates inflationary effects on end user including government projects. Vat should be exempted in economic zones (EZ) as per earlier EZ policies. Custom duties should be adjusted to facilitate industrial growth, investment and job creation without room for arbitrary assessments. Under Covid19 luxury products may be discourage through customs tools which may be a revenue source. Export source tax should be explored for adjustment considering export shrinkage due to Covid19 for next one year. Corporate tax should be revised to 25% over the next three years.

FBCCI’s proposals were reflected in some major issues of National Budget 2019-20.  Advance Income Tax (AIT) reduced to 2% for some specific products, Advance Tax (AT) on industrial raw materials reduced from 5% to 4%,  limit of personal tax-free income increased from Tk. 2. 50 lac to Tk 3 lac. Corporate Tax for non-listed companies reduced from 35% to 32.5%.

National Board of Revenue (NBR) Related Issues

 

  1. FBCCI urged for deferment of monthly VAT return submission and waiver of penalty and interest of late submissions in the Covid-19 circumstances vide its letter dated April 13, 2020 to Hon’ble Finance Minister.

 

Ministry of Finance updated the VAT & SD Law 2012 allowing monthly return without any penalty or interest considering FBCCI’s appeal in the prevailing Covid-19 situation.

 

  1. FBCCI requested NBR for smooth and timely adjustment of AT and AIT vide letter dated December 21, 2020.

FBCCI mentioned that as the AT and AIT are not adjusted, cost of business are becoming high for the steel sector. FBCCI requested for timely adjustment / refund of advance taxes.

  1. FBCCI requested NBR to determine VAT based on value addition at Dealer/ Distributor/ Retailer level vide letter dated December 30, 2020.

FBCCI mentioned that at the Dealer/ Distributor/ Retailer level rate of value addition is 2-6%. VAT should be determined on the basis of value addition.

 

  1. FBCCI requested NBR to determine income tax based on income vide letter dated December 30, 2020.

FBCCI requested NBR to determine income tax for DO/SO businessmen on the basis of income.

 

World Trade Organization (WTO) Related Issues

  1. FBCCI’s proposals submitted to H.E. ITO Naoki , Ambassador of Japan to Bangladesh for cooperation for implementation of FBCCI 2041 strategic initiatives vide letter dated December 20, 2020.

 

FBCCI requested for a meaningful cooperation for implementation of FBCCI’s initiatives in collaboration with relevant institutions of Japan.

  1. FBCCI’s opinion was submitted to Ministry of Commerce on Multi Party Interim Appeal Arbitration Arrangement (MPIA) at World Trade Organization on September 01, 2020.

 

FBCCI opined that it would be better for Bangladesh to wait and see and not to be party to the Interim Mechanism at this stage.  FBCCI also opined to follow the development in the matter at appropriate level particularly Bangladesh Permanent Mission in Geneva.

 

  1. FBCCI submitted observation on draft consolidated text of chairman, negotiating group on rules-fisheries subsidies to Ministry of Commerce on October 18, 2020.

 

FBCCI focused on appropriate and effective special and differential treatment for developing country Members and least developed country Members to be an integral part of the negotiations of fisheries subsidies.

 

International Issues

 

  1. FBCCI submitted opinion on D-8 Decennial Roadmap for 2020-2030 to Ministry of Foreign Affairs on August 9, 2020.

 

FBCCI proposed to strengthen the goals and objectives of D-8 in light of the UN SDG 2030 Agenda emphasizing on the emergence of covid-19 global pandemic and its colossal impact exposing vulnerability on Health and economy.  FBCCI also proposed to focus on Innovation, Frontier Technologies and R & D with other areas of cooperation on investment, banking and financial institutions, infrastructural development, human resources development, health and social protection, science and technology, microfinance, migrant workers and remittances, small and medium enterprises, ICT, etc.

 

  1. FBCCI’s opinion was submitted to Ministry of Foreign Affairs for the India-Bangladesh Joint Consultative Commission (JCC).

 

FBCCI’s opinion vide letter dated September 27, 2020 was sent to Ministry of Foreign Affairs for the India-Bangladesh Joint Consultative Commission (JCC). JCC was held on September 29, 2020. FBCCI addressed a wide range of issues, among which NTBs considered impacting negatively on trade promotion, contrary to provisions of the existing preferential schemes including SAFTA. Three (3) references regarding NTBs were shared in this regard.

 

  1. FBCCI’s proposals submitted to H.E. ITO Naoki , Ambassador of Japan to Bangladesh for cooperation for implementation of FBCCI 2041 strategic initiatives vide letter dated December 20, 2020.

 

FBCCI requested for a meaningful cooperation for implementation of FBCCI’s initiatives in collaboration with relevant institutions of Japan.

 

Policy Related Issues

  1. FBCCI submitted opinion to BIDA on ease of doing business vide letter dated November 6, 2019.

 

 

  1. FBCCI requested Hon’ble Commerce Minister vide letter dated July 6, 2020 to remove engine capacity barrier for import of motorcycle.

 

FBCCI mentioned that Motorbike CC barrier may be removed beyond 500CC especially for manufacturing initiatives. It may be further explored if certain percentage of components for any JV, Non- JV, domestic and/or international manufacturing should be used from domestic industry. If such industry is not available, it may be explored that with a grace period, certain percentage of components needs to be Bangladesh origin for domestic value chain and export markets. Tariff and other facilities to promote such backward linkage industries may be reached through consultation with stakeholders and FBCCI.

 

  1. FBCCI submitted proposals on Draft Bank Company Act to Financial Institution Division of Ministry of Finance on September 6, 2020.

 

  1. FBCCI addressed the problem arisen for returning the refrigerant and air-conditioning gas carrier cargo vessels terming dangerous cargo. FBCCI requested vide letter dated September 9, 2020 to Hon’ble State Minister for Shipping Mr. Khalid Mahmud Chowdhury to resolve the problem.

 

Chittagong Port Authority issued a letter resolving the problem on September 9, 2020.

 

  1. FBCCI requested Ministry of Labour and Employment vide letter dated October 5, 2020 to include FBCCI in sectoral consultative process as issues pertaining to industries across the economy are constituents of FBCCI.

 

  1. FBCCI submitted opinion on Automobile Industry Policy to Ministry of Industries on October 7, 2020.

 

FBCCI focused on necessary provision for policy support and incentives for promoting export oriented automobile industries. There should be no space for monopoly business or there should be no special facility for particular group for the local automobile market.  FBCCI also emphasized on clear guidelines so that those who are currently involved in the automobile sector, can keep their business afloat and compete in parallel and also can thrive by gaining customer’s demand, confidence, trust and after-sales service. Components manufacturing should be focused as automobile industries components are inter changeable and are applicable for domestic as well as global market.

 

  1. FBCCI requested Hon’ble Commerce Minister to revisit the CIP Policy vide letter dated October 17, 2020.

 

FBCCI urged not to select any other Association/ Chamber representatives as ex-officio CIP other than Board of Directors of FBCCI.

  1. FBCCI requested Bangladesh Bureau of Statistics vide letter dated November 28, 2020 for institutional partnership between Bangladesh Bureau of Statistics ( BBS) and FBCCI for data/ information collection and analysis.

 

  1. FBCCI President waived the annual subscription for the year 2020 of Member bodies to FBCCI. He requested Hon’ble Commerce Minister to issue necessary SRO regarding the waiver of Annual subscription – 2020 vide letter dated February 22, 2021.

 

Ministry of Commerce issued a notification dated March 7, 2021 accepting the waiver of annual subscription-2020 to FBCCI.

 

Health Issues

 

  1. FBCCI prepared Covid-19 FBCCI Health Advisory Protocols for the commercial offices, industries and other business sectors to reopen in the corona virus situation. The Protocols were prepared in consultation with Ministry of Commerce, Ministry of Health, Ministry of Industries, WHO, ILO, leaders of different sectors and stakeholders. The Covid-19 FBCCI Health Advisory Protocols were submitted to Ministry of Commerce and Ministry of Health vide letter dated May 4, 2020.

 

 

 

 

SDGs VNR Issues

 

  1. FBCCI’s observation on Draft Voluntary National Review (VNR)-2020 of the Sustainable Development Goals of Bangladesh was submitted to the Hon’ble Prime Minister’s Office on June 4, 2020.

 

Bank Interest Related Issues

  1. FBCCI President urged the Hon’ble Finance Minister to bring down bank lending rate to single digit. On December 5, 2019, FBCCI President came up with the statement while addressing at an event. He said entrepreneurs could not survive with existing high 12-14% interest rate. They are now in a tight corner, owing to high interest rates on loans, resulting in a rise in production cost. FBCCI President urged to ensure single digit lending rate as early as possible for the survival of the business.
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