The newly announced requirement making a Business Identification Number (BIN) mandatory for opening or operating business bank accounts and accessing loans has created serious difficulties for micro, small, and medium enterprises (CMSMEs).
While the objective of widening the tax and VAT net is understandable, its implementation must not undermine the very businesses that generate employment and drive economic activity.
Bangladesh needs more businesses to enter the formal economy, but this cannot happen if the process of becoming formal itself becomes a barrier to doing business.
Bangladesh has around 11.7 million economic units, nearly 99% of which are CMSMEs. Together, they employ more than 30 million people and contribute an estimated 25-32% of GDP. These businesses therefore cannot be treated as an administrative afterthought.
When entrepreneurs struggle to obtain the necessary documentation for a BIN, and consequently face delays in opening accounts or securing credit, the effects extend well beyond individual businesses.
The Association of Bankers, Bangladesh has already urged the National Board of Revenue to exempt micro, cottage, and small businesses or introduce a phased approach. The NBR, however, has said the requirement is mandated by law and cannot simply be waived.
This is precisely why the focus should now be on making compliance easier. If formalization is the goal, registration procedures should be simplified, documentation requirements reduced, services made genuinely accessible online, and adequate transition time provided.
Banks and relevant agencies should also coordinate so that entrepreneurs are not forced to navigate multiple layers of bureaucracy.
While revenue mobilization is important, creating an environment in which businesses can start, survive, and expand is equally necessary. Bangladesh needs more entrepreneurship, investment, and employment -- not more red tape.
The principle should be straightforward: Compliance must be encouraged, but doing business must be made easier. A stronger formal economy will only emerge from removing unnecessary obstacles instead of adding new ones.
Why it matters
Simplifying regulatory compliance for millions of micro, small, and medium enterprises is vital to protect employment and sustain economic growth in Bangladesh.