MCCI terms Tk 6.95t revenue target ambitious

The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) termed the revenue target of Tk 6.95 trillion in the proposed Tk 9.38 trillion national budget for the coming FY'27 as ambitious and expressed concern over its achievability.
One of the country's oldest chambers, the MCCI thinks that formulating this budget is both an important and challenging responsibility in the context of persistent inflationary pressure, global geopolitical uncertainties, sluggish investment, high interest rates, limited employment opportunities, and challenges in revenue mobilisation.
A revenue collection target of Tk 6.95 trillion has been set for the FY 2026-2027, which is 18.20 per cent higher than the revised target for the current fiscal year.
Of this amount, Tk 6.04 trillion has been assigned to the National Board of Revenue (NBR), representing an increase of 20.08 per cent over the revised target.
The MCCI, in post-budget reaction, considered this target ambitious and expressed concern regarding its achievability.
As of April, of the current fiscal year, the NBR had collected only Tk3.27 trillion, equivalent to 65 per cent of its revised target. In the MCCI's view, without structural reforms, efforts to achieve this target may lead to increased pressure and harassment of taxpayers, while additional taxation could raise the prices of essential commodities and impose further burdens on the public.
While the Chamber views initiatives to broaden the tax base and modernise and digitalise tax administration positively, it believes that achieving the target will be difficult without meaningful structural reforms.
To ensure successful implementation of the budget, it says, reforms in tax policy, automation of tax administration, reduction of system losses, strengthening of administrative capacity and greater dynamism in budget management are essential.
At the same time, priority should be given to expanding the tax net without imposing additional burdens on existing taxpayers.
The overall budget deficit for the FY 2026-2027 has been set at Tk 2.43 trillion. Of this amount, Tk 1.16 trillion will be financed from external sources and Tk 1.27 trillion from domestic sources. Within domestic financing, Tk 1.12 trillion is expected to come from the banking sector, while Tk. 150 billion will be mobilised from Bangladesh Sanchaypatra (BSP) and other non-bank financial institutions.
MCCI expressed concern regarding the country's current investment situation. Total investment declined to only 27.93 per cent of GDP in the FY 2025-2026, the lowest level in the past decade. Public investment stood at 6.40 per cent of GDP, while private investment accounted for 21.53 per cent. The decline in investment is reducing employment opportunities and increasing the risk of poverty.
The MCCI welcomed the government's various initiatives aimed at creating an investment-friendly environment.
In particular, the Chamber believes that the introduction of one-stop digital services through the "BanglaBiz" platform, the expansion of FTA, PTA and EPA agreements and the Tk 600 billion "Stimulus Package 2026" will play an important role in promoting industrialisation, foreign investment and employment generation.
While the approval of the record Tk3.0 trillion (Tk300,000 crore) ADP is positive for economic growth, MCCI remains concerned about implementation capacity and weak revenue collection performance.
During the July-April period of the current fiscal year, only 65% of the revenue target was achieved, while ADP implementation stood at 41.41%.
The MCCI believes that the FY'27 budget should place greater emphasis on pro-poor and inclusive growth.
An allocation of over Tk 1.44 trillion has been proposed for social safety net programmes, which is Tk 176.07 billion or 13.89 per cent higher than the revised allocation of Tk 1.27 trillion in FY'26.
As part of implementing electoral commitments, special allocations have been made for the Family Card Programme, Farmer Card Programme, and Religious Allowance Programme. An allocation of Tk 145 billion has been earmarked for the Family Card Programme, under which 4.1 million disadvantaged families will initially receive monthly assistance of Tk 2,500 each. An allocation of Tk. 10.62 billion has been proposed for the Farmer Card Programme to expand incentive payments of Tk 2,500 per year to farmers through mobile banking. A further Tk 10.81 billion has been allocated for special religious programmes.
The MCCI believes that the expansion of social safety nets through the Family Card and Farmer Card programmes is consistent with electoral commitments and will help sustain domestic demand.
The Chamber also views the increased allocations for education and health positively. The initiative to raise education expenditure from 1.39 per cent to 2.0 per cent of GDP and health expenditure from 0.58 per cent to 1.01 per cent reflects the government's long-term commitment to human capital development.
The MCCI also welcomes the initiative to introduce a compulsory third language in the curriculum alongside Bangla and English.
It welcomes the proposed reforms relating to Tax Deducted at Source (TDS). Under the current Income Tax Act, 2023, failure to deduct tax at source on allowable expenses could result in the entire expense being treated as a "disallowed expense", thereby creating disproportionate tax liabilities. The proposed amendment replaces this provision by requiring payment of the outstanding withholding tax together with an additional tax of 50 per cent thereon, instead of disallowing the entire expense.
This change will make the tax system more business-friendly and reduce excessive tax risks arising from inadvertent errors.
However, the MCCI remains concerned that no measures have been proposed to rationalise or reduce the Minimum Turnover Tax imposed on companies. Furthermore, since such tax may only be carried forward and no refund mechanism exists, businesses are effectively required to pay tax based on turnover even when they incur losses, thereby adversely affecting cash flow, reinvestment capacity and competitiveness.
The MCCI welcomes the proposal to increase the threshold for excess perquisites from Tk 2.0 million to Tk 2.5 million for determining taxable corporate income, to allow entertainment expenses up to the lower of 4 per cent of turnover or actual expenditure, and to increase the allowable limit for promotional expenses from 0.50 per cent to 1.0 per cent of turnover.
In the context of high inflation and rising business costs, the Chamber considers these measures timely and pragmatic. They will allow greater recognition of legitimate business expenses, improve fairness in determining taxable income, and reduce both operating costs and tax burdens.
The MCCI considers the decision to expand the definition of bank transfer to include deposits of properly recorded cash sales proceeds into bank accounts as a positive initiative for strengthening the digital economy and enhancing tax compliance.
The tax-free income threshold has been increased from Tk. 350,000 to Tk. 375,000 for tax years 2026-2027 and 2027-2028. However, reducing the number of tax slabs from seven to six and abolishing the lowest tax rate of 5 per cent in favour of a 10 per cent minimum rate will immediately increase the tax burden on a significant number of taxpayers.

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