Dhaka: Experts at a seminar today emphasized that an increase in direct taxes, rather than indirect taxes, through the expansion of the tax net, higher domestic consumption, a change in the industry’s mindset towards tax compliance, and professional handling of tax matters are crucial for attracting foreign direct investment (FDI).
According to Bangladesh Sangbad Sangstha, these measures will not only contribute to sustainable economic development but also help increase revenue collection. The experts also stressed the need for initiatives to enhance transparency in revenue collection and rationalize tax exemptions.
The government has implemented several encouraging steps, including the adoption of a contractionary monetary policy to curb inflation, alignment with international standards, reclassification of non-performing loans, and the formation of a task force for banking sector reforms.
These insights were shared at a seminar on the macroeconomic outlook and the impact of the Finance Ordinance 2025, organized by MABS and J Partners at a city hotel. The event gathered professionals, renowned economists, distinguished business leaders, and policymakers to discuss fiscal policy framing and its impact on the country’s economic outlook.
Kamran T. Rahman, President of the Metropolitan Chamber of Commerce and Industry (MCCI), attended as the chief guest. The keynote paper on macroeconomic aspects and the Finance Ordinance 2025 was presented by Md. Shahadat Hossain, Senior Partner of MABS and J Partners, according to a press release.
MCCI President Kamran T. Rahman remarked that the Finance Ordinance 2025 is integral to the national budget, coming at a critical time for the Bangladeshi economy, which faces persistent inflationary pressures, sluggish private investment, and challenges related to its forthcoming graduation from LDC status. He suggested increasing the tax-to-GDP ratio by expanding the tax net to address these issues.
Md. Shahadat Hossain highlighted that Bangladesh’s foreign exchange reserves stand at $25.9 billion, with gross reserves exceeding $30 billion as of mid-2025. However, in 2024, net FDI in Bangladesh plunged to a five-year low due to investors’ concerns over economic headwinds and policy uncertainties. Private investment’s share in GDP also declined during FY 2024-25.
The seminar also addressed the banking sector’s severe crisis, characterized by a record capital shortfall and a high level of non-performing loans (NPLs). The interim government has initiated major reforms to improve policy credibility, streamline customs and VAT, strengthen foreign exchange reserves, and provide investment incentives.
Shahadat further discussed the potential benefits of reforms in the Income Tax Act, 2023, through the Finance Ordinance, 2025, including changes in tax-free income limits and tax slab rates for individuals. These changes aim to improve taxpayer compliance and the broader macroeconomy.