Business leaders on Monday emphasized the necessity of structural changes in the revenue sector and the implementation of predictable long-term policies to ensure both local and foreign investments, which are essential for addressing the ongoing economic challenges in the country.
During a post-budget panel discussion organized by the American Chamber of Commerce in Bangladesh in Dhaka, speakers highlighted that the primary concern was the outdated revenue collection methods used by the National Board of Revenue, which have remained unchanged for the past 50 years.
Md Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industry, urged the government to provide predictable long-term policy support to attract local and foreign investments.
He noted that to achieve the revenue collection targets outlined in the proposed budget, the government must broaden the tax net rather than harass existing taxpayers.
Alam also highlighted the large informal sector, suggesting that formalizing it could generate substantial revenue.
He stressed the importance of an uninterrupted supply of quality gas and electricity to boost foreign currency earnings.
Nihad Kabir, former president of the Metropolitan Chamber of Commerce and Industry, Dhaka, stated that fundamental changes in revenue determination, tax policy, and budget implementation were critical.
She mentioned that despite current challenges, there was an opportunity to pursue regulatory reforms, address inefficiencies, and improve performance deficits.
Nihad also pointed out the need to address the more than 300 overdue projects that are now at risk of cancellation, emphasizing that such delays were no longer affordable.
M Masrur Reaz, chairman of the Policy Exchange of Bangladesh, noted a significant focus on predictability in the proposed budget, with a 28 per cent income tax rate projected to remain stable for five years and a 30 per cent tax on high-income earners.
However, he criticized the allowance for undisclosed money to be formalized at a lower rate, arguing that it undermined regular taxpayers.
Masrur also questioned the realism of the budget’s tax revenue targets given the current economic situation and expected shortfalls, suggesting that the budget could have done more to directly address the impact of inflation.
Former NBR chairman Muhammad Abdul Mazid pointed out that despite its potential, the country’s revenue collections had remained low over the decades due to the inefficiency of the NBR.
He criticized the proposed budget for increasing the burden of indirect tax, which he argued would not help curb inflation.
Mazid called for the separation of tax policy formulation and implementation, noting the contradiction in the NBR both formulating and implementing tax policies.
Ashraf Ahmed, president of the Dhaka Chamber of Commerce and Industry, remarked that the government had presented the budget at a challenging time, aiming to address inflation and stabilize the economy.
He noted that real-term expenditure had been reduced in the budget, which should help curb inflation.
While acknowledging minor issues such as increased taxes in certain areas, Ahmed viewed the overall direction of the budget as positive.
He also indicated that the current economic environment presented a good opportunity for investments due to low valuations.