Business leaders in Bangladesh advocated for an inclusive and pragmatic budget for the next fiscal year, with practical and supportive tax policies to ensure investment expansion and coordination among revenue and related policies.
They also proposed a minimum 1% VAT for entrepreneurs in the informal sector and a single-digit VAT for other traders. NBR chairman however informed that there is little possibility of further reducing corporate tax rates in the upcoming budget.
They were speaking at a pre-budget discussion titled “Budget Discussion FY2025-26: Private Sector Perspective,” organized by the Dhaka Chamber of Commerce and Industry (DCCI) on Sunday.
Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said: “We need to collect more revenue by expanding the tax net and making the tax system easier for everyone to use.”
For the upcoming national budget, he suggested implementing a fully automated corporate tax return system, eliminating advance tax for manufacturers at the import stage, and reducing it for commercial importers.
Taskeen Ahmed also called for competitive fuel prices for the industrial sector, along with a reliable gas and power supply, to build better infrastructure and logistics and boost industrialization in Bangladesh.
He added: “Given the current local and international situation, we need to lower loan interest rates, extend loan classification periods by six months, offer a six-month moratorium for all industries, improve financial sector governance to reduce bad loans, simplify small business loan procedures, and develop equity-based policies in the capital market for long-term financing.”
Md Abdur Rahman Khan, chairman of the National Board of Revenue (NBR), said: “The existing tax, VAT, and customs rates will be adjusted reasonably while automating the entire revenue system. Since our individual and corporate tax rates are already relatively low compared to regional standards, further reductions are unlikely in the next budget.”
However, he expressed hope that the existing disparity in tax rates at different levels would be resolved in the next budget.
Former commerce minister Amir Khasru Mahmud Chowdhury said the economy will not expand without increased investment and business growth, but necessary reforms are needed to ensure supportive policies.
“Effective and supportive tax policies have to be formulated to ensure investment expansion, which is where we are lagging behind,” he said.
Former FBCCI president Abdul Awal Mintoo stated that a contractionary monetary policy over an extended period is not ideal for the overall development of the private sector. He added: “To increase the tax-GDP ratio, the NBR should bring non-taxpayers on board, especially those who have TINs but are not paying any taxes.”
Former FBCCI president Mir Nasir Hossain said that due to the budget deficit and contractionary monetary policy, credit flow to the private sector has not reached the desired level. He noted that if harassment is stopped, more people will be encouraged to pay taxes.
He called for a budget that is inclusive, business-friendly, investment-friendly, timely, and pragmatic for the next fiscal year.
Abul Kasem Khan, former president of DCCI, said the logistics policy has already been formulated, which is a good move. However, he emphasized the necessity of a ten-year logistics master plan.
BKMEA President Mohammad Hatem said that if the government provides warehouse facilities to importers, they would be willing to import high-quality cotton from the USA, which would significantly help reduce the existing trade gap between the two countries.
The business leaders also called for a realistic revenue target, a single VAT rate, and automated revenue management. They recommended postponing LDC graduation, ensuring consistent gas and power supply for industries, improving infrastructure, establishing good governance in the financial sector, stabilizing exchange rates, lowering loan interest rates, developing a strong bond market, and building confidence in the capital market.
Shahed Mohammed Ali, editor of Samakal newspaper, gave the concluding remarks on the occasion.
