The American Chamber of Commerce in Bangladesh recommended that separate entities manage the formulation and implementation of Bangladesh’s budget to address significant economic challenges and ensure financial integrity.

This suggestion came as part of AmCham’s analysis of the proposed 2024-25 fiscal year budget by Finance Minister Abul Hasan Mahmood Ali.

AmCham stated that separating budget creation and execution would help tackle issues such as declining foreign exchange reserves, balance of payment deficits, energy sector imbalances, and banking sector difficulties.

It highlighted the importance of increasing export revenue, noting the significant contribution of the Ready-Made Garment sector, which added 10.35% to Bangladesh’s GDP in the last fiscal year.

Additionally, they emphasized the role of 7.9 million Small and Medium Enterprises (SMEs), which accounted for 37.56% of export GDP.

AmCham advocated for expanding SMEs, diversifying industries, policy reforms, and increased SME funding to boost export competitiveness.

The chamber also called for adjusting the tax-free income limit to account for rising inflation and noted the varied impact of tax policies on different income levels and sources.

Concerns were raised about the National Board of Revenue’s proposed 15% standard VAT rate, which could increase the cost of imported goods.

AmCham stressed the need to exempt essential products from this VAT to avoid burdening consumers and warned that increases in turnover tax and supplementary duty could deter foreign investors.

AmCham supported extending the tax holiday for the ICT sector to attract investors and promote growth.

The trade body emphasized the need for a more progressive, automated tax system using technology to improve efficiency and transparency.

It expressed concern over the new 1% duty on capital machinery and parts imported into Export Processing Zones and high-tech parks, warning it could discourage foreign investment and undermine economic stability.