FICCI Urges Tax Reforms to Boost Foreign Investment

The National Board of Revenue (NBR) reduced the value-added tax (VAT) on soybean oil imports from 10% to 5% effective until December 15, as stated in a circular on November 20. This measure aims to stabilize edible oil prices in the local market. Previously, on October 17, the NBR had granted a 15% tax exemption on local production and a 5% exemption on the supply of refined and unrefined soybean and palm oil.

Bangladesh is losing $355 million in tax annually due to corporate profit shifting and tax abuses by wealthy individuals, according to the State of Tax Justice 2024 report published on November 19. Of the total, $335.9 million is lost through profit shifting by multinational corporations, which moved $1.3 billion out of the country—equivalent to 0.1% of Bangladesh's $460 billion economy.

The equity market in Bangladesh has seen a surge in foreign investment since the political transition in August 2024. Foreign portfolio transactions on the Dhaka Stock Exchange rose to Tk 13.91 billion in July-September 2024, doubling the figure from the same period last year. Net portfolio investment by foreign investors also soared to $49 million in July-August FY25, compared to $3 million in the previous year.

Austrian companies are showing interest in investing in Bangladesh as part of efforts to enhance bilateral economic ties, according to Austria's non-resident ambassador, who visited Dhaka on November 18, 2024. During a meeting with the Chief Adviser, the envoy highlighted Austria's willingness to support Bangladesh's interim government in implementing sweeping reforms.

The Large Taxpayers Unit (LTU) recorded a 12.14% rise in revenue collection during July-September of FY2024-25 compared to the same period in FY24, reaching Tk 63.01 billion. This growth contrasts with a 6.07% decline in overall tax collection by the National Board of Revenue (NBR). Strong monitoring and proactive measures by the LTU, such as one-on-one meetings with 100 corporate taxpayers, ensured compliance.