Country's apex trade body has welcomed the proposed national budget for fiscal year (FY) 2026-27, describing it as a "pragmatic and implementable" plan that prioritises economic stability, investment, employment and social justice.
However, The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) cautioned that achieving the ambitious targets will depend heavily on stronger revenue mobilisation and efficient execution.
In a statement issued on Saturday, FBCCI outlined its reaction to the proposed Tk 9.38 trillion budget, the largest in the country's history and 18.7 per cent higher than the budget for the outgoing fiscal year.
The organisation congratulated the Prime Minister and the Finance Minister for presenting the budget, saying it reflects a commitment to restoring economic stability while supporting long-term growth and social welfare.
"The size of the budget is large, but implementation is not impossible. What is needed is foresight, efficiency and transparency," the FBCCI said in its statement.
The federation expressed optimism about the government's adoption of the "3R" framework - Recovery and Stabilisation, Restoration and Reconstruction - as the guiding strategy for economic management.
According to the business body, the proposed budget has the potential to restore macroeconomic stability, encourage investment and support inclusive and sustainable economic growth.
FBCCI also endorsed the government's macroeconomic targets of 6.5 per cent GDP growth and 7.5 per cent inflation for FY2026-27, expressing hope that disciplined fiscal management would help restore the purchasing power of ordinary citizens.
At the same time, it acknowledged that achieving the revenue target of Tk 6.95 trillion, equivalent to 10.2 per cent of GDP, would be a formidable challenge. Of the total target, the National Board of Revenue (NBR) has been tasked with collecting Tk 6.04 trillion.
Given prevailing domestic and global economic conditions, the federation urged the government to undertake structural reforms at the NBR and establish a revenue management system that is more conducive to growth, trade and investment.
Commenting on the proposed budget deficit of Tk 2.43 trillion, equivalent to 3.6 per cent of GDP, FBCCI advised the government to exercise caution in borrowing from the banking sector.
It warned that excessive government borrowing could crowd out private-sector credit, undermine investment and slow employment generation. Instead, the organisation recommended greater reliance on concessional external financing available at reasonable interest rates.
The trade body also pointed to the growing burden of debt servicing, noting that the budget allocates Tk 1.05 trillion for domestic interest payments and Tk 225 billion for servicing foreign debt.
In a broad set of policy recommendations, FBCCI called for greater focus on activating investment-friendly economic zones, diversifying exports, exploring new markets and developing skilled human resources for the information technology and electronics sectors.
It also urged the government to reduce administrative bottlenecks and the cost of doing business, strengthen the capital market and expand the bond market, improve accountability in Annual Development Programme (ADP) implementation, reform the banking sector, reduce interest rates and ensure uninterrupted energy supplies.
Improving logistics and supply-chain efficiency and developing an effective legal framework for free trade zones were also among its priorities.
FBCCI welcomed several measures included in the budget that it said reflected proposals previously submitted by the private sector.
These include mandatory online VAT return filing, quarterly VAT submissions, online income tax return and refund systems, online single-window services and the expansion of plug-and-play industrial facilities.
The federation also praised the increase in the tax-free income threshold from Tk 350,000 to Tk 375,000 and welcomed the provision for gradual future increases.
However, it urged the government to retain the existing 5.0 per cent tax slab and reduce the highest personal income tax rate from 35 per cent to 25 per cent.
While supporting the government's decision to maintain corporate tax rates for five years, FBCCI proposed a further 2.5 percentage-point reduction for listed companies to enhance competitiveness. It also suggested reducing the minimum turnover tax on sales from 1.0 per cent to 0.5 per cent in light of the ongoing economic slowdown.
Among the specific measures welcomed by the chamber were the reduction of advance income tax on industrial raw material imports from 5.0 per cent to 4.0 per cent and the reduction of source taxes on essential agricultural commodities-including rice, wheat, potatoes, onions, garlic, ginger, salt, sugar and edible oil-to 0.5 per cent.
The organisation also praised the complete withdrawal of the 5.0 per cent regulatory duty on imports of dates and cooking spices, as well as the reduction in withholding tax on interest payments for foreign industrial loans from 20 per cent to 10 per cent.
FBCCI welcomed the government's decision to waive import duty, VAT and supplementary duty on laptops, desktop computers, servers, printers and monitors, describing it as a significant boost for the information technology sector.
On social protection, the federation commended initiatives such as free train travel for citizens aged over 65, a 25 per cent discount on metro rail fares and the expansion of social safety net programmes.
The organisation also welcomed the government's Tk 600 billion Stimulus Package 2026 aimed at easing private-sector access to credit, alongside a Tk 20 billion allocation for SME development through IDCOL, BIFFL and the SME Foundation.
An additional Tk 5.0 billion allocation to support women and youth entrepreneurship was also described as a positive initiative.
Tax and VAT exemptions for start-up companies, including zero turnover tax and full VAT exemptions on local purchases and office rent, received praise from the business community.
FBCCI further supported the government's target of generating 20 per cent of electricity from renewable sources by 2030 and welcomed the continuation of zero import duty on solar energy equipment until 2035.
The federation also praised the reduction in source tax on gold imports from 5.0 per cent to 0.5 per cent under the new bonded warehouse regulations and supported the proposal to replace the existing 5.0 per cent VAT on jewellery services with a fixed charge of Tk 2,500 per unit.
The apex trade body said it is currently reviewing the Finance Bill and related income tax, VAT and customs measures in consultation with its member organisations and will submit a comprehensive set of post-budget recommendations to the government once the review process is completed.
talhabinhabib@yahoo.com
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