The Bangladesh Freight Forwarders Association (BAFFA) has urged the government not to issue new licences to fully foreign-owned freight forwarding companies, saying such approvals could put local businesses at a disadvantage.
The association also demanded withdrawal of the 1 per cent withholding tax on total freight forwarding bills and sought permission to settle domestic transactions in Bangladeshi currency instead of US dollars.
BAFFA placed the demands at a human chain in front of the National Board of Revenue (NBR) office on Sunday, attended by more than a hundred members and freight forwarding businesses.
The association said local entrepreneurs have invested in the sector for decades, developing expertise, international networks and domestic logistics capacity. Allowing fully foreign-owned firms to enter the market could create an uneven competitive environment for local operators, it said.
BAFFA adviser Kabir Ahmed said the organisation was not against foreign investment but called for an assessment of its economic impact before changing existing policies. He urged the government to retain the previous requirement of 60 per cent local ownership for foreign companies operating in the sector.
Foreign investment decisions should consider foreign currency inflows, employment creation, technology transfer, local value addition and possible foreign currency outflows through future profits, management fees and service payments, he said.
“This is not only a question of foreign ownership. It is linked to foreign exchange impact, local value addition and the country’s long-term commercial interests,” Kabir Ahmed said.
BAFFA also sought withdrawal of the 1 per cent tax deducted at source on the total bills of freight forwarding agents, saying the billed amount does not represent their actual income or profit. A large portion of the bill is paid to airlines, shipping lines, carriers and other service providers on behalf of clients, it said.
Kabir Ahmed said the tax on total bills puts pressure on working capital and cash flow of local small and medium-sized freight forwarding companies, arguing that taxation should be based on actual income and profit.
The association also demanded that domestic freight forwarding transactions that do not require foreign currency payments be settled in taka instead of US dollars. Reducing unnecessary use of foreign currency would help improve foreign exchange management, Kabir Ahmed said.
BAFFA called for a modern, transparent and industry-friendly licensing framework, saying discussions on updating regulations have continued for years without a comprehensive framework being finalised.
The association said new regulations should ensure compliance, improve professional standards, promote fair competition and strengthen Bangladesh’s logistics capacity, rather than make business more difficult.
BAFFA said it was not seeking special privileges or a protected market but wanted policy stability, fair competition and a sustainable domestic freight forwarding industry. It warned that larger programmes may be announced if its demands are not addressed.
