Businesses Call for Inclusive, Practical Budget

Business Leaders Call for Inclusive, Practical Budget and Investment-Friendly Reforms

Business leaders in Bangladesh have urged the government to adopt an inclusive and pragmatic approach in the upcoming fiscal year's budget, emphasizing supportive tax policies to encourage investment growth and ensure better alignment across revenue-related strategies.

Among their proposals were a minimum 1% VAT for informal sector entrepreneurs and a single-digit VAT for other traders. However, National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan indicated that further corporate tax cuts are unlikely in the next budget.

These views were shared during a pre-budget discussion titled “Budget Discussion FY2025-26: Private Sector Perspective,” hosted by the Dhaka Chamber of Commerce and Industry (DCCI) on Sunday.

DCCI President Taskeen Ahmed emphasized the need to broaden the tax net and simplify the tax system to boost revenue. He recommended introducing a fully automated corporate tax return system, eliminating advance tax at the import stage for manufacturers, and reducing it for commercial importers.

Ahmed also highlighted the importance of competitive fuel prices and uninterrupted gas and power supply for the industrial sector, calling for infrastructure improvements and policies that promote industrialization.

Considering the current economic conditions, he proposed lowering loan interest rates, extending loan classification periods by six months, granting a moratorium across all industries, improving governance in the financial sector to reduce bad loans, easing small business loan procedures, and introducing equity-based capital market policies to enable long-term financing.

NBR Chairman Khan stated that while tax, VAT, and customs rates would be rationalized and the entire revenue system automated, corporate and individual tax rates are already low relative to regional peers, making further reductions unlikely. Nonetheless, he noted that efforts would be made to resolve inconsistencies in tax rates across various levels.

Former commerce minister Amir Khasru Mahmud Chowdhury warned that without necessary reforms and investment-friendly tax policies, economic expansion would remain limited.

Former FBCCI President Abdul Awal Mintoo criticized prolonged contractionary monetary policies, urging the NBR to focus on including those with tax identification numbers (TINs) who are yet to pay taxes to help increase the tax-to-GDP ratio.

Another former FBCCI president, Mir Nasir Hossain, pointed out that limited credit flow to the private sector—caused by the budget deficit and tight monetary policy—could be improved by reducing taxpayer harassment.

He called for a business-friendly, inclusive, and timely budget for the upcoming fiscal year.

Former DCCI President Abul Kasem Khan welcomed the formulation of a national logistics policy but stressed the need for a comprehensive ten-year logistics master plan.

BKMEA President Mohammad Hatem suggested that warehouse facilities for importers could incentivize imports of high-quality U.S. cotton, helping to narrow the trade gap with the U.S.

The business community also recommended setting realistic revenue targets, introducing a unified VAT rate, automating revenue collection, delaying LDC graduation, ensuring consistent utility supply, enhancing infrastructure, improving financial sector governance, stabilizing exchange rates, reducing interest rates, developing the bond market, and restoring investor confidence in the capital market.

Samakal Editor Shahed Mohammed Ali delivered the concluding remarks at the event.