TBT DESK: The Foreign Investors' Chamber of Commerce and Industry (FICCI) acknowledged the government's commitment in the National Budget for FY26 towards equitable economic transformation and fiscal consolidation.
With a proposed budget size of Tk 7,90,000 crore (12.7% of GDP), the government has targeted lowering the inflation rate.
"FICCI views the budget's reform direction as positive; however, the implementation of certain tax measures may create unintended burdens on industries and individuals," said Zaved Akhtar, President of FICCI, at a post-budget press meeting held on Wednesday at FICCI in the capital on Wednesday.
Thankfully, in the shorter term, he said the interim government has been able to calm the economic nerves and rein in the disarrays. "We must also commend in the
budget the government has taken into cognizant these issues and have moved the needle to address the headwinds,"
To be fair, the FICCI President said the Finance Adviser has given guidance that the intent of the budget is to strengthen the foundation of the economy rather than vitalise the economic growth potential of the country.
About increased tax burdens on compliant individuals and businesses, the Chamber noted that under the revised tax slabs, salaried individuals earning between Tk 70,000 and Tk 100,000 per month may face a 50%-60% higher tax burden, while those earning between Tk 120,000 to Tk 175,000 may experience an increase of 20%-30%.
The FICCI reaffirmed its long-standing recommendation for a simplified and harmonised VAT system with a single rate and standard input credit mechanism.
The Chamber appreciated the government's continued push towards digital transformation through automation in tax administration and implementation of the National Single Window.
FICCI commended the government's target to raise Tk 4,99,000 crore through NBR (88% of total revenue) and welcomed initiatives to modernize tax administration and separate tax policy from tax collection functions.
However, FICCI emphasized the need for realistic revenue targets and effective execution plans to avoid creating undue burdens on compliant taxpayers.
According to projections, GDP growth is expected to rise by 157 basis points from FY24-25, while inflation is forecasted to fall sharply from double digits to 8% by June 2025.
While this presents a positive macroeconomic outlook, FICCI noted that higher minimum taxes and increased burdens on corporates and individuals could undercut this recovery trajectory.
The FICCI also reiterated the importance of inclusive tax policy reforms, emphasizing the need for a stable and predictable tax environment, along with a rationalized rate structure that fosters compliance and encourages investment.
The Chamber remains steadfast in its commitment to collaborating with policymakers to achieve shared economic objectives, attract foreign direct investment (FDI), and support Bangladesh's transition to a financially resilient future.
The FICCI also noted that the increased minimum tax from 0.6% to 1% for companies and from 0.25% to 1% for individuals would adversely impact SMEs, loss-making companies and inflation-stricken individuals.
The Chamber said another point is the imposition of a 27.5% corporate tax rate for listed companies having less than 10% public shareholding.
Furthermore, the benefits of reduced rate tax for companies having cashless transactions have been withdrawn. This, FICCI believes, goes against the goal of deepening capital markets and attracting quality listings.
The Chamber also highlighted the steep increase in VAT on online sales from 5% to 15%, which will likely hinder the growth of Bangladesh's emerging digital commerce sector.
Similarly, the rise in customs duty on beverage concentrates from 10% to 15% could negatively impact consumer prices and industry margins.
FICCI Advisers and former Presidents Rupali Haque Chowdhury and Naser Ezaz Bijoy also shared their insights on the Finance Ordinance 2025.