FICCI criticizes budget’s tax structure over impact on investment and employment

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has raised concerns over the newly announced budget, warning that its tax framework may deter investment and hinder job creation.

FICCI pointed out that the budget lacks clear growth-oriented measures, which could discourage foreign investors. Rather than expanding the taxpayer base, the government has increased the tax burden on existing taxpayers—an approach that may negatively impact the employment market over time. The chamber described the tax structure as unsuitable for business, trade, and investment, especially in the current inflationary climate.

Under the revised tax slabs, individuals earning between BDT 70,000 and BDT 100,000 may face tax hikes of 50% to 60%. The minimum tax rate for companies has increased from 0.6% to 1%, and for individuals from 0.25% to 1%. Notably, companies with no taxable income will now be required to pay a 1% turnover tax, a move that could harm loss-making firms and place additional inflationary pressure on taxpayers. These measures are expected to indirectly reduce consumer spending and impact living standards.

FICCI President Javed Akhter expressed concern that the government’s objectives of boosting investment and the current tax structure seem contradictory. While welcoming the BIDA investment summit as a positive initiative, he noted that doing business in Bangladesh remains costly and unstable compared to other countries. “Frequent changes in trade policies create uncertainty and discourage investors,” he said.

Former FICCI President and Berger Paints Managing Director Rupali Chowdhury highlighted the ongoing lack of investor confidence, stating, “Foreign investors remain cautious, and local investors feel insecure. Political instability and uncertainty weigh heavily on the investment climate. Employment growth is stagnating, and rising loan interest rates have made borrowing increasingly difficult.” She called for greater policy stability, swift implementation of reforms, and full automation of customs procedures to facilitate smoother business operations.

Naser Ezaz Bijoy, former FICCI President and CEO of Standard Chartered Bank, criticized the uneven tax burden, saying, “Those who comply with tax obligations are shouldering the cost when others evade. Any budget shortfalls tend to fall on regular taxpayers, ultimately affecting consumers.”

FICCI also condemned the re-imposition of a 27% tax rate on listed companies where less than 10% of shares are held by general investors, labeling the move discriminatory.