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While welcoming the zero turnover tax proposal for startups, Pathao chief executive officer Fahim Ahmed said the eligibility criteria must be designed in a non-restrictive way so that companies generating meaningful revenues can also benefit.

He said previous proposals placed undue restrictions on operational duration and maximum turnover when determining eligibility.

Ahmed also called for a reduction in withholding tax and VAT withholding at source for startups and tech-enabled firms, saying most operate in informal sectors where vendors often do not have a tax or VAT footprint.

“The requirement to withhold taxes and VAT from such vendors results in a cost increase for such startups and ultimately limits scalability or risks passing such cost burden to the customers,” he said.

In the next budget, the government is also considering exempting income from annual turnover of up to Tk 50 lakh for SME entrepreneurs, and up to Tk 70 lakh for women entrepreneurs and entrepreneurs with disabilities.

To promote industrial decentralisation, it may introduce accelerated depreciation benefits for investment in plant, machinery and equipment for manufacturing, tourism and sports facilities outside the Dhaka and Chattogram city corporation areas.

The proposed incentive would allow businesses to claim depreciation at 60 percent in the first year and 40 percent in the second year. Officials said the measures are aimed at boosting private investment, supporting small businesses and creating jobs across the country.