The Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) has urged the government to reduce taxes on existing compliant taxpayers and focus on widening the tax base in the upcoming budget, saying the move would help boost investment and industrialisation.
As the country faces multiple challenges stemming from global economic uncertainty, inflationary pressure, rising financing costs and preparations for post-LDC graduation, the chamber said lower taxes would also improve compliance and support sustainable economic growth.
"The upcoming national budget should prioritise growth, investment and fiscal modernisation rather than solely focusing on revenue collection," JBCCI President Tareq Rafi Bhuiyan (Jun) said at a press conference at a city hotel on Sunday.
The JBCCI, which represents more than 350 Japanese and Bangladeshi companies, organised its first-ever pre-budget press conference to share recommendations submitted to the National Board of Revenue (NBR) for FY2026-27.
The proposals focused on improving Bangladesh's investment climate, strengthening industrial competitiveness and increasing revenue collection through economic expansion and formalisation.
JBCCI founding president Matiur Rahman, Vice President Md Anwar Shahid, Board Director and Secretary General Maria Howlader, and Adviser to the Board Asif A Chowdhury also presented sector-based budget proposals at the event.
Moderated by Executive Director Tahera Ahsan, the press conference was also addressed by JBCCI Director Manabu Sugawara.
The JBCCI president particularly recommended reducing the standard corporate tax rate for the private sector from 25 per cent to 20 per cent and lowering the corporate tax rate for the textile sector to 15 per cent to maintain global competitiveness amid rising production costs, energy challenges and pricing pressure.
Bangladesh needs a more stable, predictable and investment-friendly tax and business environment on a sector-wise basis to attract foreign direct investment, including from Japan, he said, adding that the Japan-Bangladesh Economic Partnership Agreement (EPA) had opened a new avenue for long-term Japanese investment by strengthening industrial cooperation and diversifying exports.
Highlighting Bangladesh's relatively low tax-GDP ratio compared to many countries in the region, other speakers said there was significant scope to expand the tax base and modernise revenue administration through digitalisation, reduced informality, stronger compliance systems and improved efficiency instead of increasing the burden on existing compliant taxpayers.
Maria Howlader said high rates of Tax Deducted at Source (TDS) were creating pressure on business cash flow, increasing working capital constraints and raising the overall cost of doing business for suppliers, subcontractors, service providers, rental payments and non-resident service providers.
She also called for rationalisation of TDS, withdrawal of minimum tax for loss-making businesses, improvements in the tax refund system, and VAT reform through the introduction of a unified VAT rate of 7.5 per cent instead of the existing 15 per cent structure.
Matiur Rahman urged the government to declare priority sector roadmaps for industries such as agriculture, leather, pharmaceuticals and automobiles.
He said the agro-processing sector remained vastly underutilised despite contributing nearly 5.0 per cent to GDP and employing around 20 per cent of the labour force.
Referring to the automobile sector, he highlighted the potential of backward linkage industries, saying each locally assembled vehicle could generate substantial demand for ancillary industries including steel, rubber, plastics, glass and electrical components.
Former president Asif A Chowdhury stressed the need to address port congestion and operational inefficiencies in the next budget as part of broader logistics and trade facilitation reforms.
He said coordinated efforts among the Ministry of Commerce, NBR, Bangladesh Bank and CPA were essential to reducing the cost of doing business and making Bangladesh a more attractive investment destination.
He also proposed a phased reduction in corporate tax, suggesting that a 1.0 percentage-point cut annually over the next five years would send a strong positive signal to the business community.
smunima@yahoo.com
