Metropolitan Chamber of Commerce and Industry (MCCI) has proposed reducing turnover tax on gross receipts to 0.3 per cent from 1 per cent, arguing the current structure raises business costs and distorts the overall tax framework.
The proposal was presented at a pre-budget discussion for FY2026-27 jointly hosted with Economic Reporters Forum at a city hotel on Sunday.
The chamber said inconsistencies between tax deducted at source (TDS), taxes on gross receipts and final corporate liabilities are increasing compliance costs, straining cash flow and creating risks of double taxation.
It called for rationalisation of tax rates across different stages to better align with business realities.
To support exporters amid uncertain global trade conditions, MCCI recommended setting TDS on export proceeds at 0.50 per cent, noting that advance tax deductions erode working capital.
At the import stage, it proposed cutting TDS to 3 per cent from 5 per cent on raw materials and capital machinery to ease production costs and encourage investment.
For domestic transactions, the chamber suggested a flexible TDS range of 1 per cent to 3 per cent depending on transaction type and risk profile, alongside a fixed 3 per cent rate on packaging materials to improve clarity.
It also urged authorities to issue “No TDS” certificates until refundable amounts are fully adjusted, aiming to reduce delays and ease liquidity pressures.
MCCI President Kamran T Rahman said businesses are grappling with high inflation, elevated borrowing costs and foreign exchange constraints, with small and medium-sized enterprises under the most strain.
He said a supportive budget is needed to lower costs, stimulate investment and restore private sector confidence.
The chamber also stressed the need for a more investment-friendly and technology-driven tax regime as Bangladesh prepares for graduation from least developed country status.
With the tax-to-GDP ratio still below 7 per cent, MCCI underscored the importance of broadening the tax base, improving digital administration and rationalising corporate tax rates to sustain growth in a more competitive global environment.
