STAR BUSINESS REPORT

Business leaders and policy experts in Bangladesh have urged the interim government to adopt predictable tax policies and accelerate digitalisation of the tax system in order to foster investor confidence and drive sustainable economic growth.

They made these recommendations at a pre-budget seminar titled “Fiscal Issues for National Budget 2025-26 to Foster Economic and Business Growth” at the Sheraton Dhaka yesterday.

The event was organised by the Institute of Chartered Accountants of Bangladesh (ICAB) in collaboration with the Foreign Investors’ Chamber of Commerce and Industry (FICCI) and the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI).

“We must separate policy formulation from revenue administration to promote fairness and predictability,” said Zaved Akhtar, president of the FICCI.

He emphasised the need for an integrated and transparent tax system to improve revenue generation while ensuring operational efficiency.

“If we want to unlock the full potential of VAT reforms, we must progressively shift to a unified VAT system. It’s not just a tax issue – it’s a structural shift in how we operate as an economy.”

Akhtar warned that the country faces looming fiscal challenges. “We’ve had many debates on this subject. Unfortunately, the truth is, at some point, we will run out of money. The challenge is how we manage this transition to a more modern, progressive tax regime.”

He also pointed to the high effective tax burden due to complexity and duplication. “Even as we move towards greater direct taxation, streamlining the system must be a key priority.”

Maria Howlader, president of ICAB, stressed the importance of consistency in fiscal policy. “We need a predictable tax policy. Investors plan based on current policies, and sudden changes within six months are discouraging.”

She also called for inflation control, sustainable investment, and discipline in revenue and public expenditure management. “Unless confidence is restored among local investors, why would foreign investors choose Bangladesh?” she questioned.

Tareq Rafi Bhuiyan (Jun), president of JBCCI, highlighted the importance of tax rationalisation and eliminating overlaps to attract foreign direct investment (FDI). “Japanese investors are conservative and prefer long-term plans. Streamlining the VAT system is essential.”

He also called for the introduction of a long-term fiscal policy model to improve planning and reduce uncertainty.

Responding to business concerns, Md Abdur Rahman Khan, chairman of the National Board of Revenue (NBR), said the revenue authority would prioritise procedural simplification in income tax, VAT, and customs for the upcoming fiscal year instead of reducing tax rates.