Businesses push for tax cuts, pro-investment budget – but govt cites revenue pressure

Business leaders are urging that the upcoming FY2025-26 budget be investment- and business-friendly, with lower taxes and extended exemptions – taking into account Bangladesh’s smooth LDC graduation, the current domestic economy, and global financial uncertainties. But the government has signalled it is under pressure to raise revenues, making it difficult to continue tax exemptions and benefits at previous levels.

“Given the current global economic challenges and domestic pressures, stakeholders have high expectations from the interim government regarding the next budget,” said FBCCI Administrator Md Hafizur Rahman during the 45th meeting of the Consultative Committee of the National Board of Revenue (NBR), held in collaboration with key stakeholders at a city hotel today.

Hafizur added, “The focus should be on restoring confidence in business and trade through consistent policy support.” The FBCCI also demanded that the tax-free income threshold be raised by Tk100,000 to Tk450,000.

The country’s apparel industry leaders lobbied for a reduction in export taxes by half and requested the continuation of the current corporate tax rate.

In response, Finance Adviser Salehuddin Ahmed said, “Many want tax exemptions or rebates, but you must understand that the days of such exemptions and rebates are over. We are under significant pressure to increase revenue.”

He said, “You will enjoy the benefits of the taxes you pay. Remember – I pay tax, I get the benefit.”

The finance adviser, however, assured business leaders that their reasonable demands would be considered in the upcoming budget as much as possible, while also reminding them of the government’s pressing need to boost revenue collection.

NBR Chairman Abdur Rahman Khan said, “We have already significantly reduced tax rates; further cuts would not be possible. But compliant taxpayers will receive some relief signals in the upcoming budget.”

Business leaders also called for an end to harassment by field-level tax officials, a reduction in the arbitrary powers, legal reforms to ensure a business-friendly environment, and the effective implementation of automation across revenue authorities and other government offices.

To enhance Bangladesh’s position in global competitiveness indexes, the government must ensure ease of doing business, attract and protect investments, expand port capacity, manage investment currency and tariffs, lower shipping costs by enhancing port efficiency, and ensure transparency and good governance in developing sustainable infrastructure, particularly in the power and energy sectors, they demanded.

‘Businesses forced to pay bribes to clear goods from ports’

Speaking at the event, Bangladesh Textile Mills Association (BTMA) President Mohammad Showkat Aziz Russell has alleged that businesses are being compelled to pay huge sums of money in bribes for getting certificates from VAT offices.

“Businesses need to get certificates from the VAT offices after installing machinery. We are forced to pay Tk50,000 in bribes for each one. If we had paid the tax instead, it would’ve only been Tk30,000,” he said.

Russell pointed out that previously, these certificates were issued by the association itself, but the responsibility was later handed over to the NBR’s offices.

“Now we are forced to pay bribes for something that used to be straightforward. The NBR doesn’t gain anything from this change, but it creates serious problems for businesses,” he added.

The BTMA president also highlighted the ongoing power and gas crises facing the industrial sector and urged the government to extend existing corporate tax facilities until 2028.

‘Govt seeks FDI while local investors face energy crisis’

Meghna Group Chairman Mostafa Kamal said the government is continuously trying to encourage foreign investment, while local entrepreneurs are struggling to access basic infrastructure facilities and utility services such as gas and electricity.

This issue of energy crisis must be addressed, he said, claiming that his company is still deprived of necessary gas and electricity connections despite investing $600 million in a major industrial venture.

Kamal also urged the NBR not to harass businesses, raising concerns over exercising powers arbitrarily by NBR field-level authorities during the assessment of imported goods.

“On one hand, customs determine value during assessment as they see fit. On the other hand, businesses are being accused of under-invoicing or over-invoicing. This inconsistency needs to be resolved,” the Meghna group chairman added.

‘Bangladesh to ask for more time from Trump after tariff pause’

Shortly after imposing retaliatory tariffs on countries worldwide in early April, US President Donald Trump paused them for 90 days – except for China.

Finance adviser Salehuddin Ahmed said, “Bangladesh will ask for more time if needed. We will increase our engagement with the Trump administration.”

He also said that, budget will be realistic this year.

“This time, we will make a realistic budget. We won’t do it like conventional ones. We will try to do what we say. People should say it was a good budget even after we’re gone,” he said.

“Previously, large budgets were approved but not implemented. We aim to implement the budget we make,” said the finance adviser.

“I will try to fulfil your [business owners] demands in the budget as much as possible. But you need to be sympathetic towards us, and we will be sympathetic towards you,” he added.

He also said, “We are receiving a lot of criticism now, but we don’t mind that. When you work, you have to hear these things. We have mistakes and errors. There might be mistakes. Still, we are trying to keep the general public comfortable.”

Commerce Adviser Sk Bashir Uddin, Bangladesh Investment Development Authority (Bida) Executive Chairman Chowdhury Ashik Mahmud Bin Harun and other business leaders also spoke at the programme.