Businesses in Old Dhaka flag bottlenecks at DCCI event

Dhaka, 8 Feb -The long-established, mostly family-owned business sector of Old Dhaka flagged traffic congestion, water logging, weak infrastructure, and inadequate access to SME finance, as the most significant bottlenecks to doing business in one of the country's oldest and largest trading hubs.

They also pointed to the increasing exchange rate of taka against the dollar, delays in import and export procedures, high interest rates, the increased VAT and tax rates, apart from complex state revenue structures, as hurdles for their businesses, that mostly fall under the Micro and Small & Medium Enterprises (MSMEs) category.

They voiced these views at a views-exchange meeting for MSMEs in 'Old Town' on Saturday, organised by the Dhaka Chamber of Commerce & Industry (DCCI) at Lalbagh.

To address their concerns, Md. Jashim Uddin, Deputy Commissioner of Dhaka Metropolitan Police (Lalbagh Division); Director of Research at the Chief Economist’s Unit of Bangladesh Bank, Dr. Selim Al Mamun; and Additional Commissioner, Custom, Excise and VAT Commissionerate (South Dhaka) of the National Board of Revenue, Manash Kumar Barman, were present at the event as public sector representatives.

DCCI President Taskeen Ahmed stressed the need to simplify the tax system, including the system for VAT collection according to the size, nature, and capacity of businesses, fixing realistic rates of VAT, and removing complexity and bottlenecks in the import-export process.

"Despite being one of the ancient hubs for trade and commerce in the region for more than a hundred years, the entrepreneurs of Old Dhaka face various problems due to increased traffic congestion, lack of adequate infrastructure, and issues of tax and VAT," Taskeen said.

The government and private sector must work together on joint initiatives to solve these problems, he added.

Dr. Selim Al Mamun pointed out that from 2022 to 2024, the local currency, Taka, depreciated by 35 percent in the local market against the US Dollar, triggering a spell of prolonged instability in currency management. 

"In fact, the central bank is still working to contain the instability, with the aim of restoring stability in the exchange rate," he said.

He also said imports had increased by 3.5 percent, while exports spiked by almost 11 percent, in the last six months (July-December 2024) while remittances crossed $16 billion in the first seven months of the current fiscal, i.e. till the end of January.

These trends are helping the foreign exchange market get stability, and the depreciation of the local currency has 'narrowed' in recent times, he pointed out.

Additional Commissioner of NBR, Manash Kumar Barman, said the government has already taken the initiative to automate the VAT system through an online registration process. This is expected to ease the VAT payment return system for traders, and reduce harassment. 

Deputy Commissioner Md. Jashim Uddin of DMP said that traffic police will be deployed at 8 important spots to ease traffic congestion within Old Dhaka, but also urged the businessmen to come forward to recruit volunteers to help them as well.

He also suggested that traders take the help of police to transport cash during the upcoming Ramadan.

At the end of the event, Taskeen Ahmed, also Vice Chairman of the Ifad Group, handed over membership certificates to 33 newly-enrolled members of DCCI, one of the oldest and largest trade bodies in the country.