DCCI calls budget positive, investment-friendly

DCCI calls budget positive, investment-friendly

The Dhaka Chamber of Commerce and Industry (DCCI) has termed the proposed national budget for the 2026-27 fiscal year as business and investment-friendly overall. However, the chamber noted that the budget's real success will depend on achieving high revenue targets and ensuring effective implementation of announced reforms.

DCCI President Taskeen Ahmed made the comments during an immediate reaction event on the proposed budget at the DCCI auditorium in Motijheel on Thursday, June 11.

He said the Tk 9.38 lakh crore budget for 2026-27 is 19.4 per cent higher than the previous year's budget. However, the revenue growth target of 30.34 per cent is challenging given the current economic reality. Reliance on borrowing to meet the budget deficit could negatively affect banking sector recovery and private sector credit flow, he added.

The DCCI president noted that the initiative to reduce non-development expenditure is positive. However, the Annual Development Programme (ADP) implementation rate of only 36.19 per cent in the current fiscal year indicates weak implementation capacity despite a nearly 30 per cent increase in the ADP size. He stressed the need for successful implementation alongside a larger budget and ADP.

On tax management, Taskeen Ahmed said the decision to treat source tax as advance tax reflects a long-standing demand of businesses. Reducing source tax on industrial raw materials to 4 per cent, setting source tax at 0.5 per cent on 60 essential items, announcing tax structures for five years in advance, and tax exemptions in healthcare, renewable energy and electric vehicles are commendable initiatives.

DCCI welcomed the expansion of the tax net rather than increasing VAT rates, and the provision for quarterly online VAT returns. However, keeping the tax-free income limit unchanged amid inflation and setting the maximum income tax rate at 35 per cent is disappointing. DCCI demanded that the tax-free income limit be raised to Tk 5 lakh.

On the CMSME sector, he said the Tk 5,000 crore allocation under the central bank's Tk 60,000 crore incentive package is commendable. Tax benefits for small and medium entrepreneurs, increased tax-free turnover limits for women and disabled entrepreneurs, and the initiative to introduce e-loans will support entrepreneur development.

Regarding industry and investment, the DCCI president said tax reductions on electric vehicles, mobile phones, refrigerators, air conditioners and tech products will help increase investment in domestic industry. He expressed hope that the initiative to establish free trade zones will play a positive role in expanding trade and investment.

On the energy sector, Taskeen Ahmed described the decisions to exempt VAT on electric vehicles until 2030, reduce advance income tax on registration, and impose zero duty on charging infrastructure imports as groundbreaking. However, the initiative to drill new wells for gas exploration is limited compared to demand. He called for formulating a long-term energy price framework based on stakeholder opinions.

Positive steps mentioned for improving the investment climate include making the single window system mandatory, issuing work permits within seven days, reducing source tax on foreign loan interest from 20 to 10 per cent, and repealing the provision that disallowed expenses due to source tax deduction.

DCCI Senior Vice President Rajib H Chowdhury, Vice President Md Salim Solaiman, and board members were present at the event.