The government will not raise the tax burden on businesses in the upcoming national budget, Commerce Minister Khandakar Abdul Muktadir said, offering relief to firms facing high costs, weak credit flow and energy uncertainty.
The assurance came at the “Live pre-budget discussion: private sector perspective” organised by Dhaka Chamber of Commerce and Industry (DCCI) in cooperation with Channel 24 and Samakal at a city hotel on Monday.
Financial pressure on the government remains significant due to “unreasonable and over-ambitious projects” undertaken by the previous administration, he said.
“There is no alternative to reducing the cost of doing business and simplifying government services to increase private sector investment and trade,” he said.
Despite a gross domestic product of around $460 billion, about 70 million people remain below the poverty line and the tax base remains narrow, he said. Limited energy storage is also forcing Bangladesh to buy fuel at higher prices from the spot market during Middle East tensions.
He reiterated that the upcoming budget will not increase the tax burden and stressed continued cooperation with the private sector.
Automation of revenue collection, expansion of the tax net and lower compliance costs are essential to sustain growth, DCCI President Taskeen Ahmed said.
He proposed raising the tax-free threshold to Tk5 lakh, capping the maximum tax rate at 25 per cent and aligning non-listed company tax with listed firms, alongside abolishing advance value-added tax (VAT).
He also called for financial sector reforms, lower non-performing loans, stable foreign exchange reserves and rationalised interest rates to support investment.
Uninterrupted energy supply, export diversification and market expansion are critical, he said, proposing infrastructure bonds, energy supply agreements, incentives for emerging sectors and support for renewable energy.
The budget must reflect private sector constraints, International Chamber of Commerce Bangladesh (ICCB) President Mahbubur Rahman said.
Implementation gaps persist despite efforts to raise the tax-GDP ratio, he said, adding that high interest rates, weak credit flow and energy shortages are discouraging investment.
He urged alternative energy sourcing, reduced reliance on intermediaries and a stable policy environment.
Reviving growth affected by geopolitical tensions is a priority, Planning Commission General Economics Division Member Secretary Monzur Hossain said, stressing support for cottage, micro, small and medium enterprises and research.
The event included sessions on tax, financial sector, industry and infrastructure, with participation from policymakers, business leaders and economists.
Former DCCI President Rizwan Rahman said businesses face bureaucratic complexity and pressure from the National Board of Revenue, while the tax burden is rising due to limited expansion of the tax net.
He called for grassroots investment incentives, warned against excessive money printing and proposed higher allocations for healthcare and education.
The tax system should be automated with banking integration, former DCCI President Hossain Khaled said, noting that only about 30 per cent of transactions occur through formal channels.
He suggested replacing VAT with a goods and services tax.
Bangladesh Bank Chief Economist Akhand Mohammad Akhtar Hossain called for higher foreign investment, better accountability and inflation control.
A land-based LNG terminal project has remained stalled for seven years, Bangladesh Independent Power Producers’ Association President David Hasanat said, calling for greater storage capacity and foreign investment.
Confidence Group Chairman Imran Karim said weak confidence in the capital market is discouraging investment, with the index remaining stagnant despite earlier growth.
Other speakers called for realistic tax targets, unified VAT, improved infrastructure, stable exchange rates, lower lending rates, bond market development and restored investor confidence.
DCCI leaders, economists, researchers and public and private sector representatives also attended the event.
