The New Nation - Internet Edition

UNB, Dhaka

The National Board of Revenue (NBR) from their part is engaged in rationalizing the investment atmosphere in the country and creating a level playing field for all investors, including foreign ones.

With this objective, the NBR has already cut some facilities for the factories in the export processing zones (EPZs) across the country for their alleged misuses.

"We stopped duty-free import of car and liquor for the factories (in EPZs) and their employees, and exemption of tax payment for foreign technicians for three years," NBR chairman Muhammad Abdul Mazid told UNB over telephone.

He said that the NBR had detected a considerable number of misuses of the facilities in the recent times and had at last decided to cut those facilities.

After the independence, the government established the EPZs in order to stimulate rapid economic growth of the country, particularly through industrialization after adopting an 'Open Door Policy' to attract foreign investment to Bangladesh.

The primary objectives of an EPZ are to provide special areas where potential investors would find a congenial investment climate, free from cumbersome procedures.

An EPZ is defined as a territorial or economic enclave where goods may be imported and manufactured and re-shipped with a reduction in duties and/or minimal intervention by custom officials (World Bank 1999).

The EPZs provide plots/factory bldg in custom bonded area, infrastructural facilities, administrative facilities, and fiscal and non-fiscal incentives.

According to the BEPZA official website investors from 33 countries, including Bangladesh, so far invested in eight EPZs. The countries are: S. Korea, Bangladesh, Japan, China, Malaysia, Taiwan, USA, U.K, Italy, Canada, Netherlands, Germany, Br. Virgin Island, India, Sweden, Singapore, Pakistan, Panama, Switzerland, Belgium, Denmark, France, Thailand, Sri Lanka, Indonesia, Australia, Nepal, Mauritius, Ireland, UAE, Turkey, Ukraine and Marshall Island.

Explaining the recent move of the NBR to short-list the facilities provided by his organization, the NBR chairman said: "We have to develop our domestic industries and protect those… already the second generation entrepreneurship is working in the country."

He said that the establishment of the EPZs was based on some core objectives: promotion of foreign (FDI) and local investment, diversify export, development of backward and forward linkages, employment generation, transfer of technology, upgrading skill and development of management.

"But what has happened in the last 37 years, Bangladesh must draw a balance sheet on FDI in the EPZs."

Replying to a query, Mazid said that after the withdrawal of the facilities, the government would not get a huge amount in its national exchequer. "This is an indication from our part that all investors are very much the same in our eyes."

He also said that the employment in the EPZs is very much insignificant compared to the amount of investment and the facilities provided to them.

As per the BEPZA website, in eight EPZs only 17,130 local persons were employed (cumulative employment was 218,299) in 2007-08 fiscal year whereas the investment was $ 302.19 million (cumulative $ 1434.45 million). In the same year, factories in the EPZs exported $ 2429.58 million (cumulative $ 16333.04 million).

Referring to the figures, the NBR chief mentioned that the repatriation of the money was significant. "We never look to those figures."

He said that the factories in the EPZs are not labor intensive and that was the reason these factories failed to generate any substantial employment.

"All we want to say that from our side we want to facilitate the local investment, that's all," Mazid said.