innovation_line
Mon, 19 Mar 2007 16:16:05 -0800
This is outrageous - Saudi prince seeks tax waiver for 300 foreign officials It makes sense to go out of the way to woo a company like Intel or Microsoft or Sony or Samsung to setup a business house in Dhaka, but how could you justify wooing a prince like this to buy your own bank?
<http://www.bdnews24.com/details.php?cid=4&id=63062> <http://www.bdnews24.com/details.php?cid=4&id=63062> Source: www.bdnews24.com The to-be purchaser of state-run Rupali Bank has sought permission to appoint 300 foreign management personnel, including advisers and trainers on an income tax-exemption basis. Saudi Prince Bandar also demanded permission on remitting up to 90 percent of their remunerations. Requesting for work-permit is one thing, but tax-exemption? That is outrageous! This is a shocking news that some foreign investor can demand this kind of things!! It would be very upsetting that the current policy makers will continue the adhocism that used to be practiced in the name of FDI during the previous corrupt governments. It is also not understandable to us why the government needs to sell a local pubic bank to a foreigner under such conditions, while the corporatization is a valid option for the government. The country's stock market has shown a tremendous hunger for good stocks so far. Every good stock IPO offering is oversubscribed by several times. So, why can't the government float the shares to the stock market instead of selling them to the foreigners? What government should do is allow increased number of foreign workers wherever needed - only if the need can be established through a transparent procedure and benchmark. But this should be discouraged through a skewed income tax regime. At the least, tax regime should be same as the locals. There should be an additional clause in the law that governs multinational companies. Off the top three position of any company, one should be a local hire. Moreover, there should be additional incentive to hire more executives locally. This provision should be included as a stop-gap policy - say for 10 years. Once this 10-year period is over, there should be re-assessment to see whether the government can open up the restrictions. At the risk of being labeled as biased, we would also like to say that promoting the middle - eastern princes to come to do business is a not a very good idea - if not a bad one. They expect adhoc rules and treatment are their birth right - which may be true in their birth countries. But when they come out of their kingdoms, they should be treated just like other businessmen. They should also learn to expect to be treated as other businessman. FDI at any cost is a bad idea. Moreover, the local bourses are in need of good stocks. The local funds should be utilized at its fullest - instead of unnecessarily promoting FDI. The policy makers should realize that the quality FDI will come to you, you do not have to go to them. This is particularly true for any traditional type of businesses. It makes sense to go out of the way to woo a company like Intel or Microsoft or Sony or Samsung to setup a business house in Dhaka, but how could you justify wooing a prince like this to buy your own bank? It is simply outrageous!! If you thought some of the ideas are worth of your reading time, please forward it to others. If you have an ear to the media and policy makers and above all, the members of the caretaker government of Bangladesh, please forward the article to them. Hope they would look at the suggestions and give due diligence. Thanks for your time, Innovation Line =================================================================== Note: This is a freelance column, published mainly in different internet based forums. This column is open for contribution by the members of new generation, sometimes referred to as Gen 71. If you identify yourself as someone from that age-group and want to contribute to this column, please feel free to contact. Thanks to the group moderator for publishing the article. We have not seen the Liberation War, but we know if we can free the country from corruption first, we will eventually get to other dreams soon. Because of corruption, we could not even get into information highway for years, let alone other dreams! ====================================================================