Dhaka Chamber of Commerce and Industry (DCCI) on Tuesday urged the government to introduce a uniform single-digit VAT rate across all sectors to simplify tax compliance and reduce business costs.

In its budget proposals for the financial year 2025-26, submitted to the National Board of Revenue (NBR), DCCI also recommended a nominal 1 per cent VAT for traders in the informal sector.

Currently, while the standard VAT rate stands at 15 per cent, multiple slabs—10 per cent, 7.5 per cent, and 5 per cent—apply to different sectors, leading to complexities, disputes, and additional tax burdens due to the limited availability of input tax rebates.

A streamlined VAT structure, DCCI argues, would enhance transparency in revenue management and positively impact manufacturing and trade.

DCCI President Taskeen Ahmed presented these proposals to NBR Chairman Abdur Rahman Khan as part of the Chamber’s recommendations for the upcoming national budget.

This year, a total of 42 budget proposals were submitted by Taskeen Ahmed, focusing on widening the tax net, setting revenue collection targets, reducing tax rates, introducing business-friendly tax policies, automating the revenue system, reforming VAT management, protecting local industries and the manufacturing sector and simplifying import duties, the tariff system, and the tax structure for individuals.

DCCI President mentioned that according to NBR data, there are more than 10.13 million TIN holders in the country, but from July 1, 2024 to February 6, 2025, only 3.7 million returns have been filed.

DCCI President proposed to set a short, medium and long-term target for increasing tax payers and expanding the tax net.

Taskeen Ahmed also called for introducing of an automated tax return system to facilitate corporate entities to file their tax return online.

Also considering the prevailing inflationary situation and its burden on the mass people, he requested for raising the tax-free income limit for the individual from Taka 3.50 lakh to Taka 5 lakh.

In addition, the DCCI president proposed for gradual reduction of advance tax at the import level for the commercial importers and gradual phasing out of the existing advance tax for the manufacturers at the import level.

NBR chairman Md Abdur Rahman Khan said that the NBR is committed to expanding trade and investment through gradual reforms of trade-related revenue policies.

He emphasised the need to address tax expenditure, noting that while a portion of the population pays taxes, others do not, which is unacceptable.

NBR chairman said that if the business community reached a consensus, the government would consider introducing a single-digit VAT rate to replace the existing multiple slabs, which created complexities.

To streamline tax compliance, he proposed developing an integrated software system, designed by local IT experts, to automate accounting, audits and the submission of VAT and income tax returns. This web-based system would centralise data and grant the NBR access to the TIN and BIN holders’ database.

DCCI senior vice-president Razeev H Chowdhury and vice-president Md Salem Sulaiman were also present at the meeting.