The proposed national budget for the fiscal year 2025–26 has been announced at a time when the global economy remains volatile and the domestic economy is grappling with multidimensional challenges, including inflation, dwindling foreign exchange reserves, stagnation in global trade, and declining domestic investment.
Against this backdrop, the government has prioritized inflation control, food security, social safety, and increased revenue collection in the budget announcement. The Dhaka Chamber of Commerce & Industry (DCCI) welcomes these priorities.
However, to build a sustainable, inclusive, and production-oriented economy, a more explicit commitment toward the private sector and local industries was needed—something that is not adequately reflected in the current budget.
We note that the government has set a revenue target of Tk 5.64 trillion, with most of it expected to be collected through tax revenues. While expanding the tax net and mandating online tax returns are positive steps toward a business-friendly economy, these measures must be realistic and taxpayer-friendly.
Additionally, we urge reconsideration of the proposal to increase the turnover tax rate from 0.6% to 1%, as it will burden small and medium businesses and disadvantage entrepreneurs with limited capital.
Regarding local industry and production, we observe proposed increases in VAT on electronics, mobile phones, and processed food items. Moreover, the specific tax on cotton yarn and man-made fibers produced by domestic textile mills has been raised from Tk 3 to Tk 5. Such increases will make competition harder for local producers and, in the long run, increase import dependency—contradicting the goals of a “Made in Bangladesh”-centered industrial policy.
To enhance the capacity of domestic industries, production costs must be reduced through incentives, market entry must be made easier, and research and innovation should be encouraged.
It is deeply disappointing that the budget speech did not include a clear structural framework or incentive package for the CMSME sector, which accounts for around 87% of national employment. The withdrawal of certain tax exemptions under IMF directives will disproportionately affect this sector first. CMSME entrepreneurs need access to low-interest loans, tax relief, and training-based development programs to improve productivity, achieve digital capabilities, and ease financing—necessitating special budgetary allocation.
The Annual Development Programme (ADP) implementation rate has hit a post-COVID low of 41.31%. We have observed a tendency to reduce ADP expenditures in times of revenue shortfall, which has long-term negative effects on the economy. We urge reallocation by reducing operational expenses and strengthening both ADP allocation and implementation. Similarly, the allocation for the education sector has been cut to Tk 28,557 crore, just 1.75% of GDP. Increased investment in research and technical education is vital to develop a skilled and productive workforce.
In the energy sector, while tax reductions on gas sources and VAT exemptions for LNG imports help reduce costs, these are not long-term solutions. Investment must be increased in domestic energy exploration and production to ensure a stable gas supply for industries. To build long-term productive capacity, integrated and sustainable infrastructure in gas, electricity, and logistics is essential.
This budget rightly emphasizes some key proposals such as mandatory online tax returns, expansion of allowable deductions, tax exemption on LNG imports, and rationalization of import duties. We appreciate these initiatives and hope for their effective implementation. However, in the implementation phase, we also expect the inclusion of investment-friendly policies, a separate support package for CMSMEs, and administrative reforms to improve the Doing Business index.
The private sector is the engine of national growth, and the government is the policy architect. Sustainable development is impossible without effective cooperation between these two. Therefore, transparency, partnership, and business-friendly policymaking must be maintained throughout the budget implementation process. Only then can this budget initiate positive change.
The writer is the President of the Dhaka Chamber of Commerce and Industry (DCCI)
