Business leaders have urged the government to simplify and rationalise the tariff and value added tax (VAT) regime in the FY2026–27 budget, warning that high taxes and frequent policy shifts are constraining industrial growth.
At a pre-budget discussion at the National Board of Revenue (NBR) on Monday, trade bodies said the existing tax structure and policy uncertainty are discouraging investment and business expansion.
Bangladesh Steel Manufacturers Association (BSMA) proposed cutting advance income tax on imported raw materials to Tk500 from Tk600, reducing tax deducted at source (TDS) on rod sales to 1 per cent from 2 per cent, and lowering turnover tax to 0.5 per cent from 1 per cent.
The association also called for adjustment of advance income tax.
BSMA President Jahangir Alam said the sector is grappling with global challenges, with several mills shutting down, infrastructure work slowing, and production declining.
Bangladesh Iron and Steel Importers Association proposed scrapping regulatory duties on key raw materials and fixing import duty at 10 per cent.
Businesses also called for easing customs procedures, withdrawing advance tax, and expediting the long-delayed implementation of electronic fiscal devices.
Bangladesh Elevator, Escalators and Lift Importers Association (BELIA) President Mohammad Shafiul Alam Ujjal placed a seven-point proposal to support the lift sector.
He urged reinstating lifts as essential capital machinery to accelerate infrastructure development and proposed cutting the load factor rate to $1.50 per kg from $3.
He also stressed ensuring transparency in raw material declarations, preventing misuse in the open market, and reducing the tax gap between fully imported lifts and locally used inputs.
Other proposals included simplifying port clearance, bringing so-called “briefcase companies” under the tax net, and reviewing tariff structures every five years instead of annually.
Bangladesh Paint Manufacturers Association (BPMA) demanded withdrawal of the 10 per cent supplementary duty on paint products, noting that last year’s assurance from the NBR chairman remains unfulfilled.
Electronics Safety and Security Association of Bangladesh (ESSAB) called for slashing duties on fire and life-saving equipment, saying the tax burden on some items has reached 58.40 per cent, putting them beyond the reach of many users.
The association proposed a 1 per cent customs duty on products such as fire doors, sprinklers, and alarms, along with full VAT exemption.
The motor vehicle parts sector also highlighted the impact of higher duties, saying the increase from 10 per cent to 25 per cent has raised prices and transport costs.
Industry players warned that the duty hike on filter-making materials from 1 per cent to 25 per cent has put local manufacturers and jobs at risk.
Businesses also proposed VAT reforms, including treating import-stage VAT and advance tax as final settlement and reducing retail VAT to 5 per cent from 7.5 per cent.
They said implementing these measures would encourage investment, ensure fair competition, and support sustainable revenue growth over the long term.
NBR Chairman Md Abdur Rahman Khan said not all demands could be accommodated due to revenue constraints, but reasonable proposals would be considered.
He said steps are being taken to resolve complexities in harmonised system (HS) codes and align import prices with international benchmarks while preventing misuse.
