Dhaka: The Metropolitan Chamber of Commerce and Industry (MCCI) today expressed optimism that the proposed budget will play a crucial role in ensuring financial stability and fostering inclusive development. The chamber has expressed its readiness to collaborate closely with the government to facilitate budget implementation, with a focus on transparency in tax administration, enhancing the business environment, and advancing economic reforms.
According to Bangladesh Sangbad Sangstha, MCCI has pledged to continue offering its advice and support for the country’s economic and social progress. In a press statement reacting to the proposed national budget for the fiscal year 2025-26, MCCI extended its congratulations to Finance Adviser Dr. Salehuddin Ahmed for presenting the 54th national budget. The chamber acknowledged the budget preparation as a bold effort by the Finance Adviser amidst challenges such as shrinking export markets due to rising inflation, sluggish investment trends, high bank lending rates, ongoing global conflicts, and the forthcoming transition to developing country status in 2026.
The chamber noted that budget implementation will be highly challenging but stressed that effective execution requires improved budget management and significant reforms in tax policy. This includes the automation of the tax system, reduction of systemic revenue losses, and strengthening the tax administration’s capacity to provide proper services to the public. MCCI has been a consistent advocate for substantial structural reforms in tax administration to enable efficient revenue collection.
MCCI strongly urged a resolution to alleviate the tax burden on regular taxpayers by widening the tax net instead of raising tax rates. The chamber emphasized the importance of finding a balance between these options and suggested restructuring the banking sector for strategic financial management. They also highlighted that expanding the tax net and increasing the tax-to-GDP ratio remain significant challenges for the government.
The chamber pointed out that with a projected GDP of Taka 6,244,578 crore in the fiscal year 2025-2026, the revenue collection target stands at only Taka 564,000 crore, which is equivalent to just 9% of GDP. MCCI believes that higher revenue collection is contingent upon the digitalization of the tax system, simplification of tax procedures, and implementation of people-friendly tax policies.
MCCI recommended reducing the advance tax rate on the import of industrial raw materials to zero and appreciated the proposal to extend the VAT adjustment period from four to six tax periods. The chamber emphasized the need for an adequate supply of e-invoicing systems and Electronic Fiscal Devices (EFDs) to expedite the overall VAT collection process. They stressed the importance of expanding the VAT net to include all eligible businesses.
The chamber also advocated for effective automation and integration between the Integrated VAT Administration System (IVAS) and Application Programming Interfaces (APIs) to enhance VAT system efficiency. This approach, they believe, will ensure increased VAT collection and bring more businesses under the VAT net. MCCI recommended eliminating the input-output coefficient, easing restrictions on the input tax credit, and reducing exemptions from VAT at source.
The chamber further suggested that transitioning to a cashless society and tax system will help mitigate taxpayer harassment. MCCI emphasized the necessity of periodic monitoring and evaluation for budget implementation. Given current global economic instability, they highlighted the importance of evaluating budget implementation and recommended an interim assessment every three months to allow for necessary restructuring and revisions to address emerging societal and economic issues.