The proposed FY 2026-27 national budget is business- and investment-friendly but its success will depend on achieving ambitious revenue targets and ensuring effective implementation of announced reforms, said Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed.
Speaking at DCCI’s initial reaction to the budget on Wednesday at its auditorium, he said the budget’s direction supports investment and growth but execution capacity and fiscal pressures will determine outcomes.
The proposed budget size of Tk9.38 lakh crore, up 19.04 per cent from the previous fiscal year, and a revenue growth target of 30.34 per cent were described as highly challenging under current economic conditions. Reliance on borrowing to finance the deficit was flagged as a concern for banking sector recovery and private sector credit flow, although the planned reduction in operational expenditure was viewed positively.
The Annual Development Programme (ADP) allocation of Tk3 lakh crore, 30 per cent higher than the previous year, was termed encouraging. However, DCCI noted that the current fiscal year’s ADP implementation rate of 36.19 per cent reflects weak execution capacity, underscoring the need to prioritise implementation over expanded allocations.
On tax measures, DCCI welcomed the provision treating withholding tax as advance tax, describing it as a long-standing business demand. It also appreciated the reduction of withholding tax on industrial raw materials to 4 per cent, 0.5 per cent withholding tax on 60 essential commodities, advance announcement of a five-year tax structure and incentives for healthcare, renewable energy and electric vehicle sectors.
The chamber supported the government’s move to broaden the tax base without raising VAT rates and the introduction of quarterly online VAT return submission. However, it termed the unchanged tax-free income threshold amid inflation and the 35 per cent highest personal income tax rate as disappointing, urging an increase in the threshold to Tk5 lakh.
The reduction of customs duties on import of POS machines and exemption of advance tax on such imports was described as a landmark step toward promoting cashless transactions.
For the CMSME sector, DCCI welcomed the Tk5,000 crore allocation under a Tk60,000 crore Bangladesh Bank stimulus package. It also appreciated turnover tax exemptions for SMEs with annual turnover up to Tk50 lakh and up to Tk70 lakh for women and persons with disabilities, along with e-loans of up to Tk50,000. Introduction of a flat turnover tax rate for small businesses and a separate VAT return form was seen as supportive of compliance simplification.
On investment and industrial policy, the chamber said reduced taxes on electric vehicles, mobile phones, refrigerators, air conditioners and other technology products would create new opportunities for domestic industry. The establishment of free trade zones was also welcomed as a step toward expanding trade and investment.
It further noted customs and VAT benefits for local production of electric buses, trucks and e-bikes, along with incentives for vendor industries.
Mandatory single-window services, seven-day work permit issuance, ten-day investor visa processing, reduction of withholding tax on foreign loan interest from 20 per cent to 10 per cent and withdrawal of provisions disallowing expenses due to withholding tax issues were cited as measures expected to improve the investment climate.
On energy, DCCI welcomed VAT exemptions for electric vehicles until 2030, reduced advance income tax at registration stage and zero-duty facilities on import of EV charging infrastructure.
However, it cautioned that measures on gas exploration and well drilling fall short of rising demand. Without a clear long-term energy pricing framework, reliance on short-term subsidies could encourage inefficiency rather than investment, it said, calling for stakeholder consultation to develop a sustainable pricing strategy.
DCCI Senior Vice President Razeev H Chowdhury, Vice President Md Salem Sulaiman and other board members were present at the event.
