As part of a host of government decisions to boost business and investments in the country, all new industrial investments will be given tax holiday for the next 10 years while the existing Information Communication Technology (ICT) investors will get the benefit for a second five-year period. The government also decided that fiscal policy for the year 2008-09 will be ‘expansionary’ so that the rural and urban poor can be provided with employment for nine months under a special programme.

It further decided to allow in the next budget whitening of undisclosed money earned legally. Unlike in the current budget, it will not impose a penalty of 250 percent against the undisclosed money, and fix the penalty at a ‘tolerable’ rate in the next budget. In the light of a set of decisions taken by the caretaker government’s chief Dr Fakhruddin Ahmed yesterday, the central bank will ask all commercial banks to provide 40 percent of their loan funds for SMEs (small and medium enterprises) to small industries and 60 percent to medium industries.

The chief adviser took these decisions at the third meeting of Bangladesh Better Business Forum (BBBF) — comprising 38 members from private and public sectors. The forum launched in November last year made 77 recommendations, which were cleared by the ministries concerned as “doable steps”. At yesterday’s meeting, the BBBF decided that six steps will be made effective immediately, 19 will be implemented within three months and these will be announced in the next budget, 17 in the next four to six months and the rest will be implemented afterwards.

As per steps to be effective immediately banks will be asked to have separate desks to deal with women SME entrepreneurs. The central bank will permit opening of SME service centre to provide support for loans. The next budget will offer tax benefits to SME investors. All imported capital machineries for textiles sector will be declared tax-free in the next budget. Both export oriented and domestic market oriented factories will get this benefit.

The budget will slash down Vat on service charge for internet to 4.5 percent from 15 percent. The National Board of Revenue (NBR) will review inconsistencies prevailing at industrial units inside and outside the Export Processing Zones (EPZs) to set up a larger economic zone to ensure consistency. Taxpayers will be able to register Vat online. Various charges of foreign banks will be brought down to those of the domestic banks. Some charges will be fixed on the basis of actual cost. Bangladesh Bank will ensure these matters through strict monitoring.

The central bank will guide the banks in taking help from various non-government organisations (NGOs) in selecting SME borrowers and in loan distribution and collection. A venture capital company will be formed to encourage small and new entrepreneurs. The central bank will put moral pressure on the banks to fix a maximum interest rate on production oriented industrial and current loans.

The BBBF yesterday also okayed a host of ICT related steps, which include a private sector submarine cable project, launching the first communication satellite for the country, setting up ICT village etc.