FICCI Urges Tax Reforms to Boost Foreign Investment

In the first seven months of FY 2024–25, Bangladesh’s budget deficit surged by 73.04% compared to the same period last year, reaching Tk 384.93 billion. Revenue collection stagnated, with tax revenue at just over 40% of the annual target, primarily from indirect taxes. Total expenditure stood at Tk 2.746 trillion against Tk 2.362 trillion in revenue.

In a major reform move, the Bangladesh government has officially dissolved the National Board of Revenue (NBR) through an ordinance, replacing it with two new divisions—Revenue Policy and Revenue Administration—under the Ministry of Finance. This restructuring, enacted late Monday night with presidential approval

In a bid to boost revenue and reduce tax exemptions, the National Board of Revenue (NBR) is planning to impose a 2% Advance Income Tax (AIT) on around 200 previously duty-free imported items. This move is expected to generate an additional Tk2,000 crore but has drawn sharp criticism from businesses and consumer rights groups.

Starting fiscal year 2025–26, Bangladesh’s parliament will have exclusive authority over tax exemptions, ending the finance ministry and NBR’s discretionary powers. The new "Tax Exemption Policy and Management Framework" mandates that all exemptions—including income tax, VAT, and duty—require parliamentary approval, with temporary measures needing cabinet endorsement and a one-year limit. A five-year cap will apply to all first-time exemptions, countering indefinite waivers. The policy, aligned w

At a Chattogram meeting, local business leaders and politicians urged the government to prioritize domestic investment support alongside its foreign direct investment (FDI) push. The Bangladesh Investment Development Authority (Bida) Chairman announced a $3 billion FDI target for three port projects, including Laldia Container Terminal and two Bay Terminal expansions, with agreements expected by September.

In 2024, net foreign direct investment (FDI) in Bangladesh fell to a five-year low at $1.27 billion, extending a downward trend that began after the 2021 post-pandemic surge. The drop—a 13.25% decrease from 2023—was highlighted by declining equity inflows and a sharp fall in reinvested earnings.