Strong steps against money laundering may hurt businesses: NBR chair

National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem has said stringent measures against money laundering could potentially harm businesses.

"There is a growing concern over the rise in money laundering. However, taking bold measures to combat this issue could adversely impact businesses and investments as well as create various obstacles," he said while addressing a pre-budget meeting held at the NBR office in the capital's Agargaon on Wednesday (14 February).

During the meeting, the Dhaka Chamber of Commerce and Industry (DCCI) put forth several proposals, including tax exemptions aimed at safeguarding local industries, and enhancing the ease of doing business

"When engaging in well-intentioned actions, vicious hindrances often arise, causing disruptions that overshadow positive efforts."

Abu Hena Md Rahmatul Muneem, chairman of NBR

The NBR chief said, "A good initiative to support business cannot be continued for long due to dishonest groups. We want industries and businesses to develop. However, when we try to do something with a good intention, some unscrupulous traders would create such problems that the whole thing would be spoiled. There is a tendency among some to abuse the facilities given to manufacturing industries."

The NBR has to take into account various factors including assessing opportunities for business growth and enhancing economic activity. Additionally, matters such as revenue collection, combating tax evasion and money laundering need to be addressed. Also, considerations such as safeguarding the local market and preserving the environment also need attention, Abu Hena added.

DCCI President Ashraf Ahmed, alongside senior leaders of the organisation, and senior NBR officials attended the meeting.

Foreign loan decline behind dollar crisis: DCCI

In the meeting, DCCI President Ashraf Ahmed said the primary cause of the dollar crisis was the reduction in foreign loans.

He called for the removal of barriers hindering the influx of foreign loans, proposing either the elimination of taxes on interest payments for foreign loans or a maximum cap of 10%.

In a written statement, the DCCI president expressed concerns regarding the deduction of source tax on interest payments for foreign loans. He said such deductions could lead to increased loan costs and potential reductions in foreign investment and credit inflows. 

Moreover, he pointed out that it will drive up the costs of imported machinery and raw materials, disrupting efforts towards modern industrialisation. Additionally, it will lead to increased prices for domestically produced goods, resulting in a lag behind in the global competitive market.

The government last year imposed a 20% tax on interest payments for foreign loans. But, in response to objections from business entities and other sectors, the NBR initially waived this tax until February this year, and later extended the waiver until December, aiming to stimulate dollar inflows into the country.

However, the NBR chairman in several meetings recently said the tax exemption facility will not be continued after next December