[🇧🇩] Budget For 2026-2027

[Saif]

Money whitening provision may return

The government is likely to reintroduce a provision allowing the legalisation of undisclosed income through investment in selected sectors in the national budget for the next fiscal year.

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Money whitening provision may return

Md Asaduz Zaman

The government is likely to reintroduce a provision allowing the legalisation of undisclosed income through investment in selected sectors in the national budget for the next fiscal year.

The proposed amnesty scheme will include disclosure conditions, a finance ministry official said yesterday.

Speaking on condition of anonymity, the official said taxpayers may be allowed to regularise undisclosed funds by investing in designated sectors, provided they declare the actual transaction value in income tax returns filed by both buyers and sellers.

“Taxpayers can legalise their income by paying their regular rate in any assessment year in certain sectors, without any concessional treatment,” said the finance ministry official.

The Awami League government previously allowed taxpayers to legalise undisclosed assets by paying a flat 15 percent tax rate. Under that arrangement, individuals could declare previously undisclosed money in any assessment year by paying the specified rate, after which no government agency would question the source of the income.

But the proposed provision this time will introduce changes to that approach, said the official.

According to him, taxpayers will not be offered a single flat rate for regularising undisclosed income. Instead, in cases involving such undeclared gains, both buyers and sellers will be required to adjust their declared income and reflect the actual transaction values in their tax returns.

He added that structural inefficiencies in parts of the economy often lead to portions of income or capital gains remaining undeclared, and the government wants to provide an opportunity to adjust such income to encourage productive investment.

He also said the prime minister has, in principle, approved the proposal on May 14, with the expectation that it could help accelerate investment flows.

The official argued that the measure is intended to broaden the tax base and formalise informal capital, rather than offer a blanket waiver or reduced tax rate, as seen in previous amnesty schemes.

The move comes amid ongoing debate in policy circles over how to address large volumes of undisclosed income generated through property transactions, especially in land, flats and commercial real estate, where significant gaps often exist between market prices and declared deed values.

However, the proposal has already drawn criticism from economists and tax experts, who say repeated regularisation windows risk weakening compliance and discouraging honest taxpayers.

National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan recently reiterated that the tax administration is moving away from concessional whitening schemes that allowed undeclared income to be legalised at reduced rates.

“We want to say that anyone can disclose undisclosed income in their tax records by paying taxes according to the existing rates. In fact, we would welcome that,” he said during a pre-budget discussion.

Criticising past practices, he added that successive amnesty schemes over the past five decades had “ultimately backfired”, as they discouraged compliant taxpayers and distorted tax culture.

“We want to move away from this culture,” he said, adding that individuals who evaded taxes in the past should not be incentivised with lower rates.

“At the very least, you must pay the regular tax,” he said.​

 

[Saif]

Controlling inflation will be the guiding principle of upcoming budget: Debapriya Bhattacharya

Debapriya Bhattacharya, a distinguished fellow of the private research organisation Center for Policy Dialogue (CPD), has stated that controlling inflation should be considered the primary goal of the budget for the fiscal year 2026-27 in order to maintain macroeconomic stability. At this time...

en.prothomalo.com

Controlling inflation will be the guiding principle of upcoming budget: Debapriya Bhattacharya

Staff Correspondent
Dhaka
Published: 21 May 2026, 20: 15

Today, CPD's distinguished fellow Debapriya Bhattacharya is speaking at a roundtable discussion titled ''Budget in Crisis and Public Expectation'', organised by Prothom Alo. The meeting is held at the Sonargaon Hotel in Karwan Bazar, Dhaka. Prothom Alo

Debapriya Bhattacharya, a distinguished fellow of the private research organisation Center for Policy Dialogue (CPD), has stated that controlling inflation should be considered the primary goal of the budget for the fiscal year 2026-27 in order to maintain macroeconomic stability.

At this time, Debapriya Bhattacharya described the upcoming budget for the next fiscal year as a ''balancing act'' or a difficult test to maintain equilibrium against the backdrop of the current economic circumstances.

Debapriya Bhattacharya said that due to unresolved structural reforms, adverse global conditions, IMF conditions, and public expectations, the Finance Minister has to formulate the budget amidst these quadruple pressures. Under such circumstances, controlling inflation should be the primary target of the budget to maintain macroeconomic stability.

Today, on Thursday, Debapriya Bhattacharya made this statement at a roundtable discussion titled ''Budget in Crisis and Public Expectations'' organised by Prothom Alo. The meeting was held at Sonargaon Hotel in Karwan Bazar, Dhaka. The chief guest of the event was Finance and Planning Minister Amir Khasru Mahmud Chowdhury.

Debapriya Bhattacharya believes that an ''anchor'' in the framework of macroeconomics is necessary to return from a fragile economy to a path of prosperity.

He says maintaining inflation as the main goal for economic stability is still the most important. Secondly, in terms of government financial management, the budget deficit will be one of the anchors. In the present situation, the budget deficit should not exceed 4 per cent of the GDP.

Regarding the revenue collection target, Debapriya Bhattacharya said that covering the large annual revenue deficit is currently the big challenge.

There is no alternative to expanding the tax net into new areas and increasing efficiency in tax management to achieve the minister's target to raise the tax-GDP ratio to 8 per cent.

Debapriya Bhattacharya cautioned that in efforts to reduce the budget deficit, allocations for education and health should not be reduced, stating that there is a tendency within the Annual Development Programme (ADP) to keep projects alive with many ''sweetheart deals'' or limited allocations.

Tax exemption and subsidy reform

Debapriya Bhattacharya suggested that unnecessary tax exemptions should be reduced to keep the budget deficit under control.

He noted that currently, about 6 per cent of GDP is given away in tax exemptions. This includes sectors like agriculture as well as major corporate sectors.

Citing specific sectors, he mentioned that currently, tax exemptions exceeding Tk 250 billion are given in corporate income tax. In the garment and textile sectors, the amount of this exemption is nearly Tk 46.46 billion.

Again, in the power and energy sectors, exemptions amount to about Tk 76. 11 billion.

Debapriya Bhattacharya said that the National Board of Revenue (NBR) should thoroughly review these areas of tax exemption and that there is an opportunity to reconsider the vast tax exemptions granted in the power sector in particular.

To address economic disparities, Debapriya Bhattacharya called for the introduction of wealth tax and inheritance tax rather than relying solely on income tax.

He said that it has never been possible to eradicate disparity with income tax alone in the world. Wealth tax is necessary for this. Concerns over a middle-class backlash due to fear of losing popularity should not persist. Additionally, there should be an ''inheritance tax'' on property acquired through inheritance as it is an ''unearned income''. Creating a political narrative in support of this is essential.

Bangladesh faces a moderate debt crisis

Expressing concern over the pressure of repaying foreign debt, Debapriya Bhattacharya said Bangladesh has now entered a ''moderate debt distress'' situation. Managing foreign and domestic debt is a massive challenge now. Particularly for foreign debt payment, more than double the amount spent on education and health sectors is currently being allocated.

Effective coordination between Bangladesh Bank and the Ministry of Finance is needed to control this situation.

As an alternative source of revenue growth, Debapriya Bhattacharya advises the government to release shares of its multinational and profitable industrial establishments in the stock market.

He mentioned that this discussion has been ongoing since the tenure of former Finance Minister Saifur Rahman. Even the most recent interim government could not make a bold decision on this.

The current Finance Minister was the founding president of the Chattogram Stock Exchange. If he cannot do this, then who will? Mainly due to resistance from bureaucrats, this has not been possible because they receive various benefits by sitting in the board meetings of these organisations.​

 

[Saif]

Prioritise reforms to support growth

The government should focus on reforms and higher productivity to restore economic growth and financial stability instead of relying on demand side expansion and populist measures, economists said yesterday.

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NATIONAL BUDGET FOR FY27

Prioritise reforms to support growth

Economists urge govt

Star Business Report

The government should focus on reforms and higher productivity to restore economic growth and financial stability instead of relying on demand side expansion and populist measures, economists said yesterday.

“This budget gives us an opportunity to restore financial stability while supporting growth,” said Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh (PRI).

He made the remarks at PRI’s monthly macroeconomic insights session titled “Restoring Growth through Productivity Reforms: Pre-Budget Priorities” held at the organisation’s office in Dhaka.

Rahman said Bangladesh must prioritise reforms in the financial and revenue sectors, improve the investment climate, and address ongoing problems in the electricity and energy sectors.

“Without effective reforms, an expansionary budget could increase inflation and debt burdens, undermining the ongoing stabilisation process,” he warned.

He also called for reforms in state-owned enterprises (SoEs), saying these organisations hold assets equivalent to 17 percent of GDP but generate negative returns.

“This is draining the economy. You are bleeding money without any reason,” he said, blaming poor corporate governance, weak financial management, lack of transparency and political influence for the poor performance of SoEs. He also criticised the governance structure of many SoEs.

Bangladesh’s macroeconomic situation remains fragile because of weaknesses in the fiscal, financial and energy sectors. Rahman stressed that macroeconomic stabilisation alone would not be enough to restore strong and sustainable growth.

Bangladesh now needs productivity-focused reforms, including tariff rationalisation, trade openness, tax reforms, better investment conditions, energy sector restructuring, more foreign direct investment and improved infrastructure.

He noted that both Fitch Ratings and the Asian Development Bank have recently expressed concerns about Bangladesh’s economic outlook.

Inflation remained above 9 percent in April, while tight liquidity and high lending rates pushed private sector credit growth to historic lows, he said.

Businesses have cut investment because of inflation, uncertainty and energy shortages. At the same time, banks are increasingly investing in government securities instead of private lending due to rising risks and weak loan demand.

Rahman also criticised Bangladesh Bank for easing single-borrower exposure limits, warning that it could increase loan concentration among large business groups and weaken the banking sector further.

He also expressed concern over proposed amendments to banking laws that may allow wilful defaulters to return to the banking sector.

Meanwhile, Zaidi Sattar, chairman of PRI, said Bangladesh can no longer rely only on traditional growth drivers.

Future competitiveness will depend on productivity, innovation, policy predictability and openness to investment and technology, he said.

After Bangladesh graduates from the least developed country (LDC) status, the transition period would require export diversification, deeper integration into global value chains and a modern industrial policy framework, Sattar said.

Fahmida Khatun, executive director of Centre for Policy Dialogue, said reforms should go beyond slogans and be properly implemented.

She noted that previous non-political governments had also launched reform initiatives, but many failed to produce meaningful results because of weak execution.

Khatun said one of the government’s biggest challenges is preventing key sectors such as banking, energy and infrastructure from falling under the control of vested interest groups.

She also expressed concern over the slow implementation of development projects and the sharp rise in operating expenses, warning that both are undermining fiscal discipline.

Controlling inflation should not depend only on contractionary monetary policy, she said. It also requires creating a more competitive market environment.​

 

[Saif]

Next budget should focus on relief, not ambition

The country is going through a difficult period due to both domestic and global shocks, and the upcoming national budget must respond to those mounting economic pressures while pushing through essential reforms, according to economists and business leaders.

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Next budget should focus on relief, not ambition

Economists and business leaders say FY27 budget should ease pressure on people, tackle economic challenges and deliver reforms

Star Business Report

The country is going through a difficult period due to both domestic and global shocks, and the upcoming national budget must respond to those mounting economic pressures while pushing through essential reforms, according to economists and business leaders.

Since confidence is weakening among both investors and the general public, they say expectations for the new budget are to bring relief rather than be overly ambitious.

At a pre-budget roundtable at Pan Pacific Sonargaon Dhaka yesterday, economist Hossain Zillur Rahman said the next budget will have to address four key challenges: fragile business confidence, financial sector weakness, volatility in energy supply and weak budget implementation capacity.

Speaking at the event organised by Prothom Alo, Rahman, the executive chairman of Power and Participation Research Centre (PPRC), said Bangladesh is facing a prolonged period of economic strain and therefore needs a practical, implementable budget for the next fiscal year.

Rahman, who was an adviser of the caretaker government, also called for a special action framework involving stakeholders from different sectors, rather than relying solely on the bureaucracy, to address the crisis and help stabilise the economy within the next two years.

He said the plan should be strictly time-bound. Earlier initiatives such as the Delta Plan had failed to deliver due to implementation delays.

The economist also pointed to inefficiencies in public spending, especially in the health and education sectors. While allocations remain high, he said, weak execution has limited results.

Rahman urged the government to prioritise an implementable budget over a popular one.

He said sluggish investment is another major concern. Although the finance minister is operating under difficult circumstances, the problem still can be solved.

He further said the misuse of public resources continues in different forms. “Sometimes direct looting is taking place. Secondly, corruption is taking place through policy tools such as over-invoicing and under-invoicing.”

He also talked about administrative harassment and described it as remnants of the “licence raj”, saying such practices continue to enable corruption.

Shawkat Hossain, head of online at Prothom Alo, moderated the roundtable, while Editor Matiur Rahman was also present.

At the programme, Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), said expectations from the newly elected government are high.

He said the upcoming budget would have to strike a careful balance between public expectations and economic realities.

But it would not be realistic to expect too much from the finance minister, given that current challenges are caused by both domestic pressures and global economic uncertainty, said Bhattacharya.

He said controlling inflation should be a key priority in the next budget, alongside addressing pressures in the foreign exchange market and high interest rates.

He also noted that a budget deficit of around 4 percent would be acceptable.

Bhattacharya added that fiscal space does exist, pointing out that tax exemptions and subsidies currently amount to around 6 percent of GDP.

He cited tax exemptions of about Tk 25,000 crore and subsidies of Tk 4,646 crore in various sectors.

The economist also suggested offloading shares of publicly listed companies in the stock market to improve efficiency and broaden participation.

Simeen Rahman, chief executive officer of Transcom Group, said one of the biggest challenges facing businesses is the ongoing stress in the financial sector.

She said reforms are essential, but more importantly, the right reforms are needed, as many of the current challenges businesses are facing today have been inherited from previous administrations.

“The business community is affected every single day,” she said, urging the government to pursue reforms more aggressively despite the difficulties.

On the budget, she said the key challenge is to expand the tax base rather than increasing the burden on existing taxpayers.

She called for full digitisation and automation of the tax system to ensure transparency and efficiency, noting that the current tax-to-GDP ratio is around 6 percent and should be raised significantly.

She also advocated a uniform value-added tax (VAT) rate across sectors, saying differentiated rates create scope for manipulation.

On advance income tax (AIT), she said the current 5 percent deduction at the import stage is rarely refunded by the National Board of Revenue (NBR), effectively making it a permanent cost. She proposed reducing it to at least 3 percent.

She added that tax deducted at source, especially on institutional and corporate sales, is treated by the NBR as a final tax liability, creating an excessive burden on businesses. She suggested reducing the rate from 5 percent to 3 percent to provide relief.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, said investment, employment and private sector credit growth remain weak. The government should prioritise economic recovery in the budget and focus on job creation.

Mohammad Hatem, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said exporters are not receiving refunds on advance income tax despite paying it upfront. He called for widening the tax net and improving the investment climate.

Md Mahbubur Rahman, chief executive officer of HSBC Bangladesh, said Bangladesh needs a clear policy to increase foreign currency inflows.

He added that this is an opportune time to attract investment from the Middle East and stressed the importance of improving energy security.

Md Golam Mowla, general secretary of the Moulvi Bazar Baboshayee Samity in Dhaka, said prices of imported spices such as cloves and cardamom, as well as fruits, remain high due to heavy import duties.

Selim Jahan, former director of UNDP, pointed to several key challenges including economic stabilisation, macroeconomic management and restoring dynamism. He said job creation and investment growth remain central concerns.

Mohammad Mustafa Haider, group director of TK Group, said Bangladesh is losing competitiveness to countries such as China, India and Vietnam due to high bank interest rates. He noted that loan repayment periods in Bangladesh are shorter than in many of these countries.

Imran Hassan, secretary general of the Bangladesh Restaurant Owners Association, said small local bakery units are being squeezed out as large corporate groups enter the market.

He said large firms are selling packaged rice at Tk 140 per kilogram while farmers receive only Tk 70.

He also said many small rice husking mills have shut down due to corporate expansion in the sector.

Finance Minister Amir Khosru Mahmud Chowdhury said the government plans to bring low-income groups such as shoemakers, potters, theatre people, artisans and painters under budgetary coverage.

He said non-governmental organisations and private sector actors will be engaged to support these groups.

The finance minister also said the government will pursue deregulation to improve the ease of doing business and activate the creative and sports economy in the next budget.​

 

[Saif]

Jamaat calls for pro-people, reform-oriented nat'l budget

Speakers at a discussion organised by Bangladesh Jamaat-e-Islami on Sunday called for a reform-oriented, pro-people and self-reliant national budget - aimed at improving living standards through equitable wealth distribution. They said the budget must not become a tool for public exploitation or f

thefinancialexpress.com.bd

Jamaat calls for pro-people, reform-oriented nat'l budget

It focuses on improving living standards through equitable wealth distribution

FE REPORT

Published :
May 25, 2026 09:27
Updated :
May 25, 2026 09:27


Speakers at a discussion organised by Bangladesh Jamaat-e-Islami on Sunday called for a reform-oriented, pro-people and self-reliant national budget - aimed at improving living standards through equitable wealth distribution.

They said the budget must not become a tool for public exploitation or facilitating money laundering, adding that the national budgets since the independence had largely failed to bring meaningful change to ordinary people's lives.

The party plans to place an alternative budget from the Opposition bench in the parliament, and is consulting various stakeholders as part of the process, they added.

The discussion, titled "National Budget Thinking", was held at Economic Reporters' Forum (ERF) auditorium in the capital, with Jamaat-e-Islami Secretary General Mia Golam Parwar attending as the chief guest.

"As the Opposition, we want to help strengthen the government's budgeting process and the country's economic drivers from within," Mr Parwar said.

Jamaat already held several pre-budget discussions, and recommendations from those dialogues would be compiled and presented through the party's parliamentary wing.

"The governments backed by a majority often leave little room for the opposition parties to influence decisions in the parliament. Even so, the nation deserves to know what kind of budget we envision in line with public aspirations," he added.

Presiding over the event, A H M Hamidur Rahman Azad, Jamaat Assistant Secretary General and former lawmaker, said people expected the first elected government after the July Uprising to present a budget reflecting the spirit of the movement.

He urged the government to formulate an equitable and self-reliant budget without increasing tax burden on the citizens or deepening reliance on loans.

In his keynote presentation, Professor Dr A K M Waresul Karim, dean of School of Business and Economics at North South University, said nearly 80 per cent of the projected revenue target in the upcoming budget would come from indirect taxes, particularly VAT, which would disproportionately affect the low- and middle-income groups.

He criticised the National Board of Revenue (NBR) for failing to explore innovative revenue sources.

"Raising tax rates is not an achievement. Expanding the tax net requires efficiency," he said, urging the government to focus on netting tax evaders instead of burdening regular taxpayers.​

 

[Saif]

Govt plans 0.2pc turnover tax on retailers in FY ’27 budget

A new fiscal measure to bring retail businesses under the tax net by introducing a nominal turnover tax is set to come in the upcoming FY27 budget. The model, the first of its kind, would help the government mop up revenue from the informal economy. Under the measure, dealers or manufacturers wou

thefinancialexpress.com.bd

Landmark fiscal measure for informal economy
Govt plans 0.2pc turnover tax on retailers in FY ’27 budget

Doulot Akter Mala

Published :
May 25, 2026 08:29
Updated :
May 25, 2026 08:29

A new fiscal measure to bring retail businesses under the tax net by introducing a nominal turnover tax is set to come in the upcoming FY27 budget.

The model, the first of its kind, would help the government mop up revenue from the informal economy.

Under the measure, dealers or manufacturers would deduct a 0.2 per cent tax on the supply of goods to retail shops.

Income tax officials will connect the tax payment through A-challan on the mobile app.

A senior tax official says retailers will get a text message (SMS) on their mobile phones every three months about the amount of taxes they have paid so far.

With this, retailers would be able to know whether they have taxable income or not, he says.

The tax model has proved successful in India to expand the tax net, he adds.

The official is optimistic about getting retailers' cooperation as the tax rate is nominal, Tk 2 for each Tk 1,000.

Business association data shows there are nearly 30 million retail businesses across the country. The tax would have to be deducted at source by dealers and manufacturing companies at the time of payment to retailers.

Corporate taxpayers will show the tax to adjust with the payable taxes in their annual tax returns.

Currently, the government does not receive any taxes from retail shops.

Tax expert Snehasish Barua says introducing upstream tax collection - where distributors/companies collect tax on goods sold to retailers - could significantly broaden the national income tax net.

By establishing a documented purchase baseline, this model captures the hidden income of informal retailers, he says.

"It levels the competitive playing field for corporate superstores already burdened by strict compliance, while equipping the VAT authorities with transparent data to bring retailers under the VAT net and boosting overall revenue collection.

"However, policymakers must carefully manage a critical economic challenge. Shifting this tax burden upstream to manufacturers risks driving up operational costs, potentially inflating the final retail prices of everyday products for consumers," he adds.​

 

[Saif]

Energy security and banking stability should get priority

The business community wants to see the government prioritise energy security, banking stability and practical reforms in the upcoming budget for fiscal year 2026-27, Taskeen Ahmed, the president of the Dhaka Chamber of Commerce and Industry (DCCI), has said.

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Energy security and banking stability should get priority
Taskeen Ahmed, president of Dhaka chamber, calls for structural and practical reforms

Jagaran Chakma

View attachment 27032
Taskeen Ahmed

The business community wants to see the government prioritise energy security, banking stability and practical reforms in the upcoming budget for fiscal year 2026-27, Taskeen Ahmed, the president of the Dhaka Chamber of Commerce and Industry (DCCI), has said.

The BNP-led government has inherited a highly challenging economy marked by instability in the energy and banking sectors, high inflation and weak investor confidence, he told The Daily Star in a recent interview.

He said the upcoming budget should adopt a “realistic” fiscal plan instead of an ambitious one.

“We are expecting a realistic and practical budget,” he added. “Businesses want to see clear direction and policies that can actually be implemented.”

The ongoing US-Israel war on Iran made things worse, he said, sharply raising Bangladesh’s fuel import costs and injecting fresh uncertainty into global energy markets.

He, however, acknowledged that the “government’s resources are limited” and added that the additional burden of energy imports would force policymakers to make difficult spending decisions in the budget.

He also noted that businesses welcomed some of the government’s early steps, particularly its focus on employment generation, banking reforms and refinancing support for industries.

Rising prices have significantly reduced people’s purchasing power and created a difficult balancing act for policymakers. The current economic situation is close to “stagflation”, where inflation remains high while economic activity slows. Inflation is not falling, but economic activity is slowing down at the same time.

ENERGY FIRST

Of all the pressures weighing on businesses, Taskeen was most emphatic about energy.

“Energy security is now more important than the price itself,” he said.

Businesses had accepted repeated increases in energy tariffs over the past few years based on assurances that supply quality and reliability would improve.

“But many industries are still struggling,” he said. “Without an uninterrupted energy supply, production cannot run smoothly, and new investment will remain slow.”

He warned that uncertainty surrounding energy supply was hurting investor confidence at a time when private sector credit growth had already fallen sharply.

“Businesses need confidence to invest,” he said. “That confidence depends heavily on stable energy supply, predictable policies and access to financing.”

He also flagged an uneven energy pricing structure for new industries.

Some newly established plants were being charged higher energy tariffs than older ones operating in the same areas, he said, adding that it is creating an “unequal competition” that was discouraging fresh investment.

View attachment 27033

STABILISE BANKS

Taskeen also called on the government to focus on reviving the banking sector, describing it as fragile and struggling with liquidity shortages.

With default risks rising and liquidity tight, many banks have grown reluctant to lend, leaving businesses starved of working capital just as private sector credit growth has been falling sharply, said the seasoned businessman, who is also the group vice chairman of IFAD Group.

“Money has to return to the market,” he said. “Banks need to resume lending to productive sectors.”

He argued that businesses genuinely affected by recent shocks -- the Russia-Ukraine war, currency depreciation, rising fuel prices -- deserve temporary policy support to recover.

The government’s early focus on banking reforms and refinancing support for industries was a step businesses had viewed positively, he added.

EXCESSIVE RATE HIKES TO HURT JOBS

On inflation, Taskeen said rising prices had significantly reduced people’s purchasing power and created a difficult balancing act for policymakers.

He described the current economic situation as close to “stagflation”, where inflation remains high while economic activity slows.

“Inflation is not falling, but economic activity is slowing down at the same time,” he said.

He acknowledged that higher policy rates were a globally accepted tool to control inflation but warned against excessive tightening.

“If businesses shut down, people will lose jobs. Then inflation will become an even bigger social problem,” he said.

Supporting businesses should remain a priority because the private sector accounts for around 90 percent of Bangladesh’s GDP, argued the DCCI president.

PRACTICAL REFORMS

Beyond the immediate crises, Taskeen pressed for structural and practical reforms to improve the ease of doing business, particularly through the digitisation of government services and tax administration.

He criticised the requirement for multiple certifications and approvals to start a business, arguing these increased costs and created opportunities for corruption.

Taskeen further stressed the need for reforms at Chattogram port, which handles the majority of the country’s external trade activities.

“Ease of doing business cannot improve unless port operations become faster and more predictable,” he said.

On revenue mobilisation, he said Bangladesh needed to gradually expand its tax net, noting that a large share of economic activity remained outside the formal financial system, limiting the government’s capacity to fund public services.

Restoring business confidence, he said, would require progress across all these fronts together.

“It’s a combination of many factors,” he said. “If the government can ensure energy security, improve banking stability and continue reforms with political commitment, the economy can regain momentum.”​

 

[Saif]

It’s time for survival. Growth can wait

The government should focus on stabilising businesses in the upcoming budget for fiscal year 2026-27 rather than chasing ambitious growth targets, according to a top business leader, as he says confidence remains fragile at home and global risks are rising.

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It’s time for survival. Growth can wait

Anwar-Ul-Alam Chowdhury (Parvez), president of Bangladesh Chamber of Industries, says budget should restore business confidence

Jagaran Chakma

Anwar-Ul-Alam Chowdhury (Parvez)

The government should focus on stabilising businesses in the upcoming budget for fiscal year 2026-27 rather than chasing ambitious growth targets, according to a top business leader, as he says confidence remains fragile at home and global risks are rising.

“The immediate target should be survival. Growth can come later,” said Anwar-Ul-Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI), in an interview with The Daily Star.

He said the first priority of the new budget should be to restore business confidence, followed by reducing the cost of doing business and ensuring policy consistency.

“For businesses, stability matters more than headline incentives,” he said.

“Tax incentives alone can’t yield much if uncertainty persists,” said Chowdhury, adding that the FY27 budget should provide the country’s private sector with decisive policy support to improve the fragile business confidence.

The business leader said confidence has improved since the national election in February, which brought the BNP to power in a landslide.

The forthcoming budget will be the new government’s first. But he commented that business sentiment has not fully recovered.

“There was an expectation that political stability would bring economic stability. But people are yet to feel that improvement fully,” he said, pointing to law-and-order concerns and a “mob culture” that “continues to unsettle investors”.

He said the new government has inherited a difficult economic backdrop, including high inflation and rising non-performing loans. While discipline in foreign exchange management has improved, broader macroeconomic stress is still constraining business expansion.

At the same time, private sector credit appetite has weakened, and unemployment is rising, adding to social and economic pressure.

Global developments are compounding those strains. Volatility in oil markets has pushed up import costs and heightened uncertainty over energy supply.

After war broke out in the Middle East in the last week of February, oil prices crossed $100 a barrel. Even with a truce currently in place, prices are above $90, compared with around $69 before the conflict.

Chowdhury said a prolonged war could intensify fiscal pressure for the government, with industry bearing the cost of higher energy financing.

Against that backdrop, he called for a comprehensive effort to lower business costs.

“High interest rates, unreliable energy supply, logistics bottlenecks and complex regulation are all squeezing companies,” he said.

At the centre of the problem, in the view of the BCI president, is bureaucracy. “Procedural complications and harassment are major barriers. If those are reduced, costs will fall naturally,” he said.

He cited arbitrary disallowance of expenses, inconsistent interpretation of tax rules and complications in self-assessment procedures, which often force companies into repeated explanations and audits.

In some cases, he said, effective corporate tax rates climb far above the official rate, reaching 42 percent to 50 percent because of hidden costs and disallowances.

“One of the most striking concerns is the narrow tax base,” he added.

Bangladesh has around 1.18 crore business entities and millions of professionals, yet only about 32 lakh taxpayers actively contribute, according to Chowdhury. “This is not because people do not want to pay tax. They simply avoid it because the system feels complicated and punitive.”

To widen the tax net, he proposed a simplified, slab-based tax system for small businesses, similar to India, under which firms with lower turnover would pay a fixed amount instead of navigating complex compliance rules.

“This would encourage voluntary compliance and expand the tax base,” he said.

For local businesses, Chowdhury said, liquidity pressures are also mounting. He said high rates of tax deducted at source (TDS) often exceed actual profit margins, leaving firms short of working capital.

“Companies also face scrutiny from multiple authorities, including joint commissioners, intelligence units and audit teams, sometimes reviewing the same file repeatedly over several years.”

“This slows down operations, increases manpower costs and reduces efficiency,” he said, calling for a “single assessment, single closure” system to prevent tax files being reopened without cause.

High lending rates are another deterrent to investment, said the business leader.

“Banks are charging 14 percent to 15 percent, which is not sustainable for most businesses,” Chowdhury said. “The underlying cost of funds is closer to 5 percent to 6 percent but is inflated by inefficiencies and bank margins.”

High interest rates, unreliable energy supply, logistics bottlenecks and complex regulation are all squeezing companies. At the centre of the problem is bureaucracy. Procedural complications and harassment are major barriers. If those are reduced, costs will fall naturally.

He also talked about a crowding-out effect for the private firms as banks shift towards government securities. “Why take risks with businesses when treasury bonds offer safe returns?” he said.

To ease borrowing costs, he urged the government to act decisively, including reducing the policy rate to bring down lending rates.

Energy security, he said, is equally critical. Industry needs uninterrupted and reasonably priced power to survive. The government should maximise domestic energy sources, expand solar generation and ensure adequate gas supply for industry and fertiliser production, especially as food security concerns grow.

He said logistics costs are another drag on competitiveness. Higher port charges and transport inefficiencies have raised production costs.

“Reducing logistics costs could significantly improve competitiveness,” said Chowdhury.

He argued that weak implementation of the budget, not poor policy design, is the deeper problem. “But, without strong commitment, even the best policies will fail.”

He also called for closer coordination between policymakers, businesses and economists. “Every stakeholder sees only part of the picture. Real solutions require a combined effort,” he said.​