The American Chamber of Commerce in Bangladesh has proposed a comprehensive set of fiscal and regulatory measures for the FY2026–27 national budget, with a focus on income repatriation, tax harmonisation and digitalisation.

AmCham President Syed Ershad Ahmed presented the proposals at a pre-budget consultation held on April 5 at the National Board of Revenue (NBR) headquarters in Dhaka, chaired by NBR Chairman Abdur Rahman Khan.

The recommendations covered taxation, financial services, energy, manufacturing, digitalisation and trade regulation, and were designed to strengthen the investment climate, accelerate digital adoption and improve consistency in tax administration.

At the core of the recommendations was a push to improve the ease of doing business and ensure a more predictable, transparent and competitive fiscal framework.

The chamber said that that Bangladesh’s tax and regulatory systems required greater alignment with international best practices to attract foreign investment and support domestic industrial growth.

In the financial services and banking sector, AmCham placed emphasis on streamlining income repatriation for foreign investors.

It proposed that banks be permitted to apply Double Taxation Avoidance Agreement (DTAA) benefits directly at the time of remittance, thereby removing the existing requirement for a separate NBR certificate.

It further suggested that, where certification is still required, it should be issued within seven days and remain valid for up to three years.

The chamber also recommended harmonising corporate tax rates, proposing a uniform 37.5 per cent rate for both foreign and locally listed commercial banks to ensure a level playing field.

For Offshore Banking Units (OBUs), it called for a preferential tax regime ranging between zero and 20 per cent, in line with practices in other Asia-Pacific economies.

In addition, it urged revisions to import duties on smart cards and point-of-sale (POS) machines, suggesting that they be reduced to below 15 per cent to expand digital payment infrastructure.

On foreign exchange transactions, the chamber proposed the incorporation of a provision in the Income Tax Act 2023 to use the annual average selling rate published by Bangladesh Bank for corporate tax payments, with a view to ensuring consistency and reducing disputes in currency valuation.

AmCham recommended a 5 per cent incentive on card-based transactions, with 3 per cent allocated to consumers and 2 per cent to merchants, aimed at encouraging digital payments and improving transaction transparency.

It also suggested enabling the purchase of government treasury bonds through debit cards, a move intended to expand digital financial trails and enhance tax compliance through better data integration.

In the energy and manufacturing sectors, the chamber called for clarification of inconsistencies between the Income Tax Act and source tax rules relating to non-resident contractors in the oil and gas industry.

It proposed a specific withholding tax rate of 4.125 per cent for contractors opting for corporate tax assessment under Rule 39.

AmCham urged the introduction of VAT exemptions on the procurement of garment waste, commonly known as ‘Jhoot’.

The proposal was described as a measure to formalise the recycled textile supply chain, promote circular economy practices, and potentially reduce cotton import costs by up to $500 million annually.

It also recommended a fully digital, time-bound system for refunds or adjustments of excess advance tax, VAT and TDS to ease working capital pressures on manufacturers.

In the consumer goods and ICT sectors, the chamber called for a major rationalisation of supplementary duties.

It suggested reducing the 30 per cent supplementary duty on carbonated beverages to 15 per cent, citing regional competitiveness and investment incentives.

It also recommended withdrawing the 5 per cent supplementary duty on bottled drinking water, arguing that it is an essential commodity.

Further proposals included lowering supplementary duty on selected food and personal care items.

Cereal products and chocolate were suggested to be placed in a 0–10 per cent duty range, while personal care products were proposed to face a maximum of 20 per cent duty in order to restore import flows and stabilise consumer pricing.

For the ICT and wholesale distribution sector, AmCham was reported to have suggested reducing the minimum tax on gross receipts from 1 per cent to 0.30 per cent, arguing that the current structure disproportionately affects low-margin, high-volume digital and distribution-based business models.

In customs and regulatory reforms, the chamber recommended the introduction of a digital customs valuation database to reduce administrative discretion and enhance predictability in import pricing.

It also proposed limiting random electronic audits to between 0.5 and 1 per cent of transactions, with the aim of streamlining compliance procedures.

It further suggested that ‘fees for technical services’ be redefined in alignment with Bangladesh Investment Development Authority (BIDA) guidelines to eliminate ambiguity in tax interpretation.

In the insurance sector, it recommended that interest paid or payable to policyholders be allowed as a deduction from gross external receipts when calculating life insurance business income, in order to avoid double taxation.

On tobacco taxation, AmCham proposed a structural shift from the current ad-valorem system to a specific tax model based on a fixed per-pack rate.

It argued that the existing system, which places a tax burden exceeding 85 per cent of total income, encourages illicit production and undermines formal sector viability.

A fixed tax structure, it maintained, would improve compliance and stabilise government revenue.