Experts on Sunday urged making a long-term, sustainable tax policy to increase investment in the country by domestic businesses and foreign investors.
They also called for urgent structural reforms in debt management, governance, and banking sector regulation, as well as bold fiscal policies in the upcoming budget.
They were talking in the seminar in the capital titled “Fiscal Issues for National Budget 2025-26 to Foster Economic and Business Growth.”
The seminar was jointly organized by the Foreign Investors Chamber of Commerce and Industry (FICCI), the Institute of Chartered Accountants of Bangladesh (ICAB), and the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI.)
Snehasish Barua, chartered accountant and director of SMAC Advisory Services Ltd., and M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, delivered the keynote presentations.
Barua stressed the need for bold fiscal policies in the upcoming budget.
"Incremental changes won’t be enough—we need a forward-thinking, investment-friendly strategy that directly addresses revenue mobilization, rising debt, and tax compliance," he said.
He highlighted Bangladesh’s low tax-to-GDP ratio as a key issue, calling for a broader tax base, VAT modernization, and full automation of tax administration to improve transparency and compliance.
Additionally, he underscored the importance of ensuring an investment-friendly climate, advocating for policies that facilitate private sector growth, support export diversification, and enhance ease of doing business to bolster both domestic and foreign investor confidence.
In his presentation, he shows that in this fiscal year, NBR will again face a huge revenue target shortfall.
In FY25, NBR's original revenue collection target was Tk480,000 crore, but in February it was revised to Tk463,500 crore.
But actual revenue from July to March was Tk256,486 crore. This means that if it goes this way, the expected collection will be TK389,894 crore.
That means in FY25, the expected deficit will be Tk73,606 crore.
Structural reforms
Masrur Reaz called for urgent structural reforms in debt management, governance, and banking sector regulation, stressing that rising debt servicing costs are limiting productive investments while fragmented institutional coordination hampers effective policy responses.
Greater transparency in public investments and the revitalization of capital markets, he noted, would be essential in reducing dependence on bank borrowing.
Despite these challenges, he pointed to signs of optimism, noting that exports gradually rebound and remittances remain strong.
However, he warned that sustaining this momentum requires policy consistency, supply-side improvements, and robust fiscal reforms that strengthen investor confidence and financial discipline.
Abdur Rahman Khan, chairman of the National Board of Revenue (NBR), noted that the majority of investment-related tax issues have already been addressed by the NBR and assured that efforts are ongoing to resolve the remaining challenges through close collaboration with stakeholders.
Reaffirming the government’s commitment to business-friendly reforms, he also stressed the importance of strengthening enforcement to curb tax non-compliance.
“A significant policy shift was announced—transferring the authority to grant tax exemptions to Parliament. This move aims to enhance transparency, reduce undue influence, improve the ease of doing business, and align fiscal policy more closely with long-term economic sustainability,” he also added.
Regarding the ongoing draft ordinance on separating NBR, he told Dhaka Tribune that the reform ordinance for the National Board of Revenue will be issued according to the advisory council's decision.
Necessary amendments will be made based on discussions before the ordinance is implemented, and the finance adviser has provided guidance on this matter.
“Separating NBR's policy and implementation divisions is one of the conditions of the IMF's reform agenda,” he added.
He also said that they would instruct the commissioners to set a target regarding tax collection for this year and next year.
He also said that the ordinance to separate the NBR will be issued soon, as the advisory council has approved it.
Ficci President Zaved Akhtar emphasized the need for an integrated tax system to enhance revenue collection while ensuring transparency and efficiency.
He stressed the importance of distinguishing policy formulation from revenue administration to foster fairness and predictability.
He also advocated for a unified VAT rate, proper classification of raw materials, and the gradual removal of non-tariff barriers to strengthen Bangladesh’s trade competitiveness amid its upcoming LDC graduation.
JBCCI President Tareq Rafi Bhuiyan (Jun) welcomed the upcoming budget’s focus on improving ease of business, highlighting its potential to attract investment and foster stronger Bangladesh-Japan economic ties.
ICAB President Maria Howlader emphasized the need for predictable tax policies, digitalization, and structural reforms to create a more business-friendly environment.
She highlighted controlling inflation, enhancing revenue mobilization, and promoting sustainable investment.
“We need to set a predictable tax policy and ensure consistency—investors and businesses plan based on existing policy, but sudden changes within six months discourage,” she added.
“We call for a clear pathway to ensure discipline in revenue management and public expenditure,” she said. Without confidence being restored among local investors, why would foreign investors come to Bangladesh to invest?”
Experts, government officials, and business leaders from Ficci, JBCCI, and ICAB also spoke at the event about expanding the direct tax net in the upcoming budget.
TIM Nurul Kabir, executive director of Ficci, moderated the event.