The President of the Dhaka Chamber of Commerce & Industry (DCCI), Taskeen Ahmed, has expressed concerns over the recently announced national budget, stating that it falls short of expectations in creating a conducive environment for business and investment expansion.
In his initial reaction, Ahmed acknowledged some positive measures, including efforts to control inflation, tax waivers, an automated tax return system, reduction of certain advance taxes, the establishment of a central bonded warehouse, and VAT waivers on LNG imports. However, he characterized the budget as a “mixed bag,” noting that many provisions could put additional pressure on businesses due to increased tax burdens
One of his concerns was the unchanged tax-free income threshold for individuals, which he believes will impose extra tax burdens on middle-income earners and service sector employees starting next year. While welcoming a 100 crore taka fund aimed at supporting youth entrepreneurs, Ahmed pointed out that online sellers may face higher costs, potentially discouraging startups. He also highlighted a paradox in government policy: although internet costs have been reduced, VAT on mobile phones will increase, possibly hampering the ongoing digitization efforts.
Ahmed criticized the proposed increase in import duty on spare parts for the automobile industry from 10 per cent to 25 per cent, arguing that this move could adversely affect the local automotive sector. He further expressed concern over the government’s revenue collection target, warning that heavy reliance on indirect taxes could pose significant challenges.
Additionally, he warned that dependence on local banks to bridge the budget deficit might restrict private sector credit flow. The increase in turnover tax from 0.6 per cent to 1 per cent was seen as an additional burden that could raise operational costs for businesses.
To foster growth, Ahmed recommended the government reduce borrowing costs for businesses, suggesting that interest rates should be lowered to between 6 per cent and 7 per cent. He also emphasized the importance of effectively implementing the Annual Development Program (ADP) and exercising austerity in government spending to support economic stability.
Overall, while acknowledging some positive initiatives, DCCI’s President called for more supportive measures to enhance the business environment and encourage investment.
