STAR BUSINESS REPORT

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has welcomed the proposed national budget for offering greater policy predictability and positive signals for investment, while raising concerns over the government’s ambitious revenue target.

The chamber said efforts to control inflation, attract foreign direct investment (FDI) and ensure fiscal stability are encouraging. However, it questioned the feasibility of the projected revenue growth amid a slowdown in economic growth.

“The projected 40 percent growth in revenue collection compared to actual collection appears highly ambitious, especially when the economy is growing at around 4 percent while the GDP growth target is 6.5 percent,” said FICCI President Rupali Haque Chowdhury at a post-budget briefing at FICCI’s office in Dhaka yesterday.

“This remains a concern for us,” she added.

She warned that when revenue targets are not met, governments often introduce supplementary duties and additional taxes, increasing the burden on compliant taxpayers while many potential taxpayers remain outside the tax net.

“We believe the revenue gap should be addressed by expanding the tax base and identifying new sources of revenue, rather than imposing additional taxes on compliant businesses,” she said.

Chowdhury also praised the government’s efforts to improve policy predictability, saying investors need a stable fiscal environment for long-term investment decisions.

“For years, businesses have sought consistency in fiscal policies. This budget signals that corporate and personal tax policies will remain stable in the coming years, which is a positive development,” she said.

However, she noted that Bangladesh still lags behind regional competitors in key areas. She pointed out that Vietnam’s corporate tax rate is about 20 percent, compared to 27.5 percent in Bangladesh, while several Indian states offer extensive investment incentives.

Chowdhury said Bangladesh must benchmark itself against competing investment destinations, as global investors have multiple options when choosing where to invest.