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Unfavourable tax policy hampers SME growth: Experts

Experts at a dialogue here has said the policies across South Asia for SME are confusing because of its (SME) diverse definition given by the institutions that encourage investment, promote trade, levy taxes, provide credit and support to the sector, UNB reports. The experts came up with the observations at the dialogue titled ‘SME Development in South Asia: How Conducive are the Tax Policies?’ organised by Centre for Policy Dialogue (CPD) in collaboration with Governance Institutes Network International (GINI) at BRAC Centre Inn in the capital on Thursday.

Presenting the keynote paper, research and programme development manager of GINI Sabieh Haider said in the absence of a standard definition for SMEs and lack of tax awareness, the sector struggles with troublesome registration processes and medium to high compliance costs with their respective VAT regimes.

He recommended educating taxpayers on tax systems, making provisions for self-assessment of tax, transparent tax return calculation mechanism and improvement of the accessibility of tax administration’s service offices. Speaking at the programme, CPD executive director Prof Mustafizur Rahman noted that the study covering Bangladesh, India, Pakistan, Nepal and Sri Lanka focused on the impacts of tax exemptions and concessions, VAT reforms, and property tax on the development of SMEs in South Asia.

CPD research fellow Towfiqul Islam Khan suggested tax officials to assess actual transaction value of real estate properties and improve tax administration human resources and record keeping using digital mapping of land. President of Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) Kazi Akram Uddin Ahmed said he held several meetings with NBR regarding taxation policies for SMEs in the upcoming budget as he considers the sector very important for employment generation in Bangladesh.

Findings from the Indian part of the study were shared over skype by Kaushik Bhadra, research associate, National Institute of Public Finance and Policy (NIPFP), India. Policy Research Institute of Bangladesh executive director Dr Ahsan Habib Mansur and Metropolitan Chamber of Commerce and Industry (MCCI) Syed Nasim Manzur also spoke at the programme.

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