Business leaders in Bangladesh are calling for an abolition of tax charges on letter of credit (L/C) openings as part of their campaign to encourage entrepreneurs to set up businesses and create jobs.

The Dhaka Chamber of Commerce and Industry (DCCI) is also urging the government to reduce taxation on new businesses and introduce low-interest loans.

Business deterrent

Bangladesh's tax on opening local L/Cs should be withdrawn according to the DCCI.

It says the tax is denying entrepreneurs the use of competitively priced trade finance instruments available to business in other countries.

Tax cuts

The chamber is also calling for the government to reduce the income tax rate from 5 per cent to 3 per cent for new businesses.

The DCCI reckons the higher tax rate prevents business start-ups from making profits in the first three or four years trading.

Low-interest loans

The DCCI is also campaigning for the Bangladeshi government to use tax receipts to fund low-interest loans for businesses.

The chamber says current commercial lending rates of around 18 per cent stifle investment and if low-interest government loans were introduced, they would force down the cost of commercial loans.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.