FROM PAGE B1

10 percent. Tobacco products and cigarettes would remain subject to a 45 percent tax plus a 2.5 percent surcharge.

“There will be an indication in the budget to reduce corporate tax gradually as the government looks to expand its coverage,” a senior finance ministry official said, requesting anonymity.

The official added that companies currently paying the highest rates are likely to see gradual reductions in the coming years.

In fiscal year 2021-22, the corporate tax rate for non-listed companies was reduced to 30 percent from 32.5 percent, while the rate for listed firms was cut to 22.5 percent from 25 percent.

Rupali Chowdhury, president of the Foreign Investors’ Chamber of Commerce and Industry (FICCI), welcomed the move, saying policy predictability is essential for business planning and investment decisions.

“We like predictability very much. Predictability is good. Businesses need certainty to make long-term investment decisions,” said Chowdhury.

She argued that recent increases in supplementary duties have offset the benefits of lower corporate tax rates.

“Corporate tax is imposed on profits, but supplementary duty is imposed on revenue. On one hand, the tax rate is being reduced, but on the other hand, the government is taking back more through higher supplementary duties,” she said.

Chowdhury said businesses often have little choice but to pass the additional costs on to consumers, contributing to inflation and raising operating costs.

She also expressed concern that compliant companies bear a disproportionate share of the tax burden while non-compliant firms continue to evade taxes, undermining fair competition and reducing government revenue.

Snehasish Barua, managing director of SMAC Advisory Services, said the roadmap would provide much-needed certainty but warned against locking in tax rates for an extended period.

“Globally, corporate tax rates are falling. Locking Bangladesh’s private company tax rate at 27.5 percent until assessment year 2030-31 risks severely damaging our competitiveness against regional peers such as Vietnam and Indonesia,” he said.

He noted that international practice usually limits such policy commitments to two or three years.

Barua said maintaining relatively high corporate tax rates over the long term could discourage private investment at a time when Bangladesh needs stronger economic growth and job creation.

“If the government’s ultimate goal is to create employment, it must rethink locking in uncompetitive long-term rates and instead design an agile fiscal strategy that stimulates domestic investment and robust job growth,” he added.

Masrur Reaz, chairman of Policy Exchange Bangladesh, also welcomed the proposal, saying it addresses longstanding concerns about policy inconsistency. However, he said Bangladesh’s corporate tax rates and overall tax burden are high compared with regional competitors such as Vietnam, Indonesia, Thailand and India.

“This is the first positive step, but the next important step should be rationalising the corporate tax rate, which is still quite high compared to comparable economies,” he said.

He added that advance income tax and other mechanisms increase the effective tax burden beyond the headline rate. “While predictability is welcome, the next step must be rationalisation of tax rates to improve competitiveness,” he said.