Preparations for the national budget of fiscal year 2026-27 are underway, with strengthening local industries, expanding employment and easing pressure on low and middle-income groups being given the utmost priority.
However, the budget is being formulated at a time when businesses in Bangladesh are facing mounting challenges, including sluggish global demand, high fuel and raw material costs, elevated lending rates and persistent macroeconomic stress.
Besides, many firms are struggling to repay loans, thereby intensifying demands for targeted fiscal relief and smoother access to working capital.
Revenue officials said they have already held preliminary discussions with Finance Minister Amir Khasru Mahmud Chowdhury, who provided guidelines for the upcoming budget.
They informed that Khasru stressed policy continuity to encourage domestic investment as sudden shifts in tax incentives or regulatory measures often deter entrepreneurs.
“We want to ensure predictability in fiscal measures so that investors can plan with confidence,” an NBR official told TIMES of Bangladesh, on condition of anonymity.
Bangladesh’s tax-GDP ratio remains one of the lowest among its regional peers. Data of the National Board of Revenue (NBR) shows that the country’s tax-GDP ratio fell to 6.7 percent in FY25 despite average annual revenue growth of around 15 per cent over the past two decades.
Officials argue that stronger compliance by state-owned enterprises could significantly improve the ratio.
They cited outstanding dues exceeding Tk20,000 crore from Petrobangla alone, noting that timely payments by public entities could push the tax-GDP ratio beyond 8 per cent.
As such, the revenue authority is prioritising an expansion of the tax base and better compliance rather than increasing tax rates.
It has also invited suggestions from businesses and stakeholders to simplify procedures and address complexities in tax laws.
Economists said achieving higher revenue growth – particularly to reflect BNP’s electoral pledges in the FY27 budget – will require structural reform.
Towfiqul Islam Khan, additional director (research) at the Centre for Policy Dialogue, said ambitious spending commitments cannot be met without raising revenue at a faster pace.
“Such growth is achievable, but it demands comprehensive reforms in tax administration and enforcement,” he added.
Khan further said that ensuring tax compliance by public institutions would strengthen overall discipline.
“When state entities fail to meet their obligations, it weakens compliance culture across the board,” he added.
Khan also underscored the importance of employment-focused fiscal measures, particularly support for small-and-medium enterprises with strong job-creation potential.
The NBR has sought written proposals for amendments to tax laws and rules and plans to hold consultations with chambers and trade bodies in coming weeks before finalising the revenue framework.
As development spending needs to grow and revenue mobilisation remains constrained, the FY27 budget is shaping up to be a critical test of the government’s ability to raise resources without undermining economic recovery.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said consistent and predictable tax policies are crucial for restoring investor confidence.
“Frequent changes in tax measures create uncertainty. The focus should be on simplifying the system, reducing discretion and strengthening enforcement,” he added.
