BAFFA threatens work stoppage over foreign ownership

The Bangladesh Freight Forwarders Association (BAFFA) has threatened to suspend import and export-related activities if the government allows fully foreign-owned companies to operate in the freight forwarding sector.

The association made the warning at a protest rally in front of the National Board of Revenue (NBR) in Dhaka on Sunday, attended by more than 100 freight forwarders and businesspeople.

Earlier, BAFFA representatives met NBR officials to discuss proposed new licensing rules before holding the demonstration.

BAFFA demanded that the existing 60:40 ownership rule be retained, under which local investors must hold at least 60pc of a joint venture and foreign investors can hold up to 40pc.

BAFFA adviser and former president Kabir Ahmed said local entrepreneurs had invested in the sector for decades, building business networks, skills and logistics services.

He said the association was not against foreign investment but urged the government to assess the economic impact of changing the ownership rules.

MGH Group Managing Director Syed Iqbal Ali Shimul said Bangladesh pays at least $9 billion annually for international freight, but local companies retain only 8pc to 10pc of the amount.

With policy support, he said, the figure could rise to around 20pc, or at least $2 billion.

BAFFA leaders warned that fully foreign-owned companies could increase foreign currency outflows through freight charges, profit transfers, head office costs and related-party transactions.

They also opposed shipping companies entering freight forwarding through their own subsidiaries, saying this could allow a business group to control both shipping and freight forwarding.

The association demanded withdrawal of the 1pc tax deducted at source on total freight forwarding bills, arguing that much of the money is paid to airlines, shipping lines and other service providers rather than retained as company income.