The American Chamber of Commerce in Bangladesh (AmCham) has called for comprehensive tax administration reform and enhanced compliance measures, while warning that a heavy reliance on domestic borrowing to finance the FY 2026-27 budget deficit could tighten liquidity and constrain private sector credit.
Characterising the Tk9.38 lakh crore budget as “broadly pragmatic” despite domestic and global economic pressures, the chamber noted that the success of the plan – which targets 6.5 per cent GDP growth and 7.5 per cent inflation – will depend on fiscal discipline and investment-led growth.
Deficit and revenue targets
AmCham described the fiscal deficit, set at 3.55 per cent of GDP, as broadly prudent.
However, it cautioned that domestic borrowing to bridge this gap may “crowd out” private sector credit and raised the need for essential coordination between fiscal and monetary policy to maintain macroeconomic stability.
Regarding revenue mobilisation, the chamber termed the Tk6.95 lakh crore target as “ambitious”. To meet these goals, AmCham advocated for comprehensive tax administration reform alongside stronger compliance.
While welcoming ongoing digitalisation and transparency initiatives to broaden the tax base, the chamber suggested reviewing revenue governance structures, including the potential separation of tax policy and administration functions to improve institutional effectiveness.
Development and social protection
The chamber welcomed increased allocations for education, healthcare, and social safety net programmes, including the Tk1.45 lakh crore earmarked for social protection. It noted, however, that positive outcomes would be contingent upon improvements in governance and service delivery.
While the Tk3 lakh crore Annual Development Programme (ADP) was viewed as supportive of infrastructure expansion, AmCham raised concerns regarding implementation challenges.
To avoid common delays and cost overruns, the chamber called for enhanced project readiness, more robust evaluation systems, and performance-based monitoring.
Trade and energy
On trade and competitiveness, AmCham expressed support for export facilitation measures and selected tax reductions. It emphasised that policy predictability and structural reforms remain critical as Bangladesh prepares for LDC graduation.
In the energy sector, the chamber appreciated incentives provided for renewable energy, solar power, and electric vehicles.
Nevertheless, it stressed the necessity of ensuring a reliable and affordable energy supply through increased investment in domestic resources and infrastructure efficiency.
Overall, AmCham stated that the budget provides a strong foundation for economic stability, but its ultimate success will rely on effective implementation, policy consistency, and stronger public-private collaboration.
