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The FBCCI added that the government should, as far as possible, rely on low-cost foreign funding to meet its expenditure needs.

It noted that the government will face challenges in raising funds to pay Tk 1.05 lakh crore in bank loan interest and Tk 22,500 crore in interest on foreign borrowing.

High inflation, a low tax-to-GDP ratio, a large volume of defaulted loans, pressure from external debt and an unstable geopolitical situation could also make budget implementation difficult.

To address these challenges, the FBCCI suggested prioritising the operationalisation of investment-friendly economic zones, diversifying exports and markets, developing human resources in the IT sector, reducing the cost of doing business, strengthening the capital market, and ensuring quality and accountability in implementing the Annual Development Programme.

The FBCCI said the government’s plan to sign trade agreements with major trading partners and introduce necessary customs rules is positive, as Bangladesh is set to graduate from the least developed countries (LDC) category to a developing nation in November this year.

It also welcomed the proposal for zero duty on imports for the renewable energy sector and the introduction of a Tk 60,000 crore stimulus package for the private sector.

The trade body said simplifying online VAT return submission, shifting to quarterly returns, enabling online income tax filing and payments, and introducing a national single window will help attract both domestic and foreign investment.

The FBCCI welcomed the proposal to set the corporate tax rate for five years, but said it would have been better if it could be reduced further to 2.5 percent.

It also appreciated treating source tax as advance income tax, but said the minimum tax should be reduced to 0.5 percent from 1 percent.

The trade body further welcomed the proposal to reduce source tax on imports of 60 essential commodities, including rice, wheat, potato, onion, garlic, salt, sugar and edible oil, from 5 percent to 4 percent.