The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has welcomed key reform measures in the proposed Finance Bill 2026, describing them as progressive steps to improve Bangladesh’s investment climate, while cautioning on ambitious revenue targets and implementation challenges.
In a statement on Thursday, the chamber said the bill reflects the government’s commitment to an inclusive, investment-driven economy under the 3R framework—Recovery, Restoration and Reconstruction.
FICCI highlighted measures to simplify tax administration, enhance digitalisation, and reduce compliance burdens as positive moves to strengthen investor confidence.
The chamber lauded provisions such as treating tax deducted at source as advance tax, introducing faceless and automated tax refunds, lifting restrictions on legitimate business expenses, and increasing limits for perquisites and promotional costs. The shift to accrual-based recognition of interest expenses and reductions in disputed tax burdens at the appeal stage were also welcomed.
Under the VAT regime, FICCI praised the move from monthly to quarterly returns, noting it would lower compliance costs. It also supported reductions in withholding tax on raw material imports, foreign loan interest, and machinery rentals, alongside the introduction of the “BanglaBiz” platform and simplified profit repatriation procedures.
However, the chamber expressed concern over the lack of a long-term roadmap for corporate tax reduction, warning it could affect Bangladesh’s competitiveness in attracting foreign investment. It also flagged challenges related to mandatory eVAT implementation for large taxpayers without a transition period, and the proposed increase in the highest personal income tax rate to 35 percent, which could raise costs for skilled foreign professionals.
FICCI urged withdrawal of the proposed 0.2 percent Advance Income Tax at the retailer level, extending cashless transaction incentives to private limited companies, and restoring investment rebates for individual taxpayers. It also called for all fiscal measures to be applied prospectively to ensure certainty for investors.
Regarding the budget framework, the chamber noted total expenditure for FY 2026–27 stands at Tk 9.38 lakh crore (13.7 percent of GDP) with a projected deficit of Tk 2.43 lakh crore. It said the revenue target of Tk 6.95 lakh crore would require significant expansion of the tax base and strong fiscal discipline.
FICCI concluded that the success of the budget will depend on strengthened revenue mobilisation, institutional capacity, and continued efforts to improve the ease of doing business in Bangladesh.
