Foreign Investors’ Chamber of Commerce and Industry president Zaved Akhtar on Wednesday opined that the proposed national budget for the 2025-26 financial year will not increase confidence level for enhancing foreign direct investment.
He said that the finance adviser himself said that this was not a good budget. As a result, it does not appear to be conducive to increasing investment or investor confidence, he added.
He was speaking at a post-budget press meet at FICCI auditorium in the capital on the day.
‘The interim government has taken a good number of measures in the proposed budget which would enhance efficiency of doing business in the country, but businesses would face pressure if tax net is not widened. Even compliant companies could feel a burden due to this,’ he said.
He stated that attracting FDI largely depended on policy consistency, ease of doing business and confidence in the country.
‘Investors invest with a plan of 50 years. I invested Tk 250 crore last year with a plan for the next 50 years. So, policy consistency is crucial. Structurally we have to work to bring more FDI,’ he added.
Regarding foreign investment, Zaved Akhtar said that, unfortunately, Pakistan was attracting more FDI than Bangladesh.
‘Foreign investment has been low here for a long time. Although this is not directly influenced by the budget, it depends on factors such as a trustworthy environment, policy continuity and business facilitation. Furthermore, streamlining paperwork and approvals is also essential,’ he added.
He said that in the last three budgets, the tax burden on businesses and investors had been increasing.
‘This year, the tax expenditure will also rise and we will have to pay more taxes. Prices of beverages, cigarettes and baby food will go up,’ he added.
Moreover, taxes on listed companies have been increased by 2.5 per cent to narrow the gap with non-listed companies, he said.
Former FICCI president Naser Ejaz Bijay said that to achieve the 9-per cent revenue growth target tax revenue must increase by approximately 39 per cent.
However, he stated, the method for achieving this had not been clarified.
‘Raising tax rates doesn’t necessarily lead to higher revenue collection. In fact, lowering tax rates often results in increased revenue,’ he added.
He urged the interim government not to create extra pressure on businesses to meet IMF conditions.
Former FICCI president Rupali Haque Chowdhury said that the National Board of Revenue should focus on bringing businesses, which were operating without paying taxes, into the tax net.
She stated that a fully automated customs system can broaden the tax base.
FICCI consultant Snehasish Barua presented the keynote at the event.
In his keynote, he said that tax burdens on compliant individuals and businesses had increased as the salaried individuals earning between Tk 70,000 and Tk 1,00,000 per month might face a 50-60 per cent higher tax burden, while those earning between Tk 1,20,000 to Tk 1,75,000 might experience an increase of 20-30 per cent.
Moreover, the increase of minimum tax from 0.6 per cent to 1 per cent for companies and from 0.25 per cent to 1 per cent for individuals would adversely impact SMEs, the keynote said.
Another point of concern is the imposition of a discriminatory 27.5 per cent corporate tax rate for listed companies having less than 10 per cent public shareholding.
Furthermore, the benefits of a reduced tax rate for companies with cashless transactions have been withdrawn, which may counter the goal of deepening capital markets and attracting high-quality listings.
The increase in VAT on online sales from 5 per cent to 15 per cent will likely hinder the growth of Bangladesh’s emerging digital commerce sector.
Similarly, the rise in customs duty on beverage concentrates from 10 per cent to 15 per cent could negatively impact consumer prices and industry margins.
Meanwhile, the FICCI reaffirmed its long-standing recommendation for a simplified and harmonised VAT system with a single rate and standard input credit mechanism.
The chamber appreciated the government’s continued push towards digital transformation through automation in tax administration and implementation of the National Single Window.
The keynote also commended the government’s target to raise Tk 4,99,000 crore through NBR (88 per cent of total revenue) and welcomed initiatives to modernise tax administration and separate tax policy from tax collection functions.
The chamber emphasised the need for realistic revenue targets and effective execution plans to avoid creating undue burdens on compliant taxpayers.
