FBCCI flags revenue target, implementation as key challenges in FY27 budget

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) today (13 June) welcomed the proposed national budget for fiscal year 2026-27, describing it as pragmatic and implementable, while flagging revenue mobilisation and efficient execution as the two most critical challenges ahead.

In a written reaction to the Tk9,38,000 crore budget, the country's largest ever and 18.7% higher than the outgoing fiscal year, the apex trade body extended its congratulations to the prime minister and finance minister, noting that the budget gives priority to economic stability, investment, employment, production and social justice.

"The size of the budget is large, but implementation is not impossible; what is needed is foresight, efficiency and transparency," said FBCCI in a statement today.

FBCCI expressed optimism over the government's adoption of the "3R" framework: Recovery and Stabilisation, Restoration and Reconstruction, as the guiding economic strategy, saying it would help restore macroeconomic stability, boost investment and foster inclusive and sustainable growth.

The body also supported GDP growth and inflation targets set at 6.5% and 7.5%, respectively, expressing hope that disciplined fiscal management would help ordinary citizens regain purchasing power.

FBCCI acknowledged that the total revenue target of Tk6,95,000 crore, equivalent to 10.2% of GDP, with the National Board of Revenue (NBR) assigned Tk6,04,000 crore, represents a formidable challenge given current domestic and global economic conditions.

The federation urged structural reforms at the NBR and a revenue management system conducive to growth, trade and investment to meet the target.

On the budget deficit of Tk2,43,000 crore, 3.6% of GDP, FBCCI cautioned the government to exercise restraint in borrowing from the banking sector, as it crowds out private sector credit and adversely affects investment and employment.

It recommended greater reliance on concessional external financing at reasonable interest rates.

The total interest payment burden, Tk1,05,000 crore in domestic interest and Tk22,500 crore in foreign debt servicing, was described as a significant fiscal pressure.

In a wide-ranging set of recommendations, FBCCI called on the government to focus on:

• Activation of investment-friendly economic zones
• Export diversification and new market exploration
• Human resource development in IT and electronics
• Reduction of administrative red tape and cost of doing business
• Strengthening of the capital market and expansion of the bond market
• Improved accountability in ADP implementation
• Interest rate reduction and banking sector reform alongside curbing defaulted loan
• Uninterrupted power and energy supply
• Logistics and supply chain efficiency
• Development of legal frameworks for free trade zones
• Transforming the potential of the Blue Economy into reality

Additionally, FBCCI welcomed several budget provisions it said reflected its own prior proposals, including: mandatory online VAT return filing, quarterly VAT submission, online income tax return and refund systems, online single-window services, and an expanded plug-and-play industrial facility.

The body also praised the raising of the tax-free income ceiling from Tk3,50,000 to Tk3,75,000 with provisions for gradual future increases, though it urged the government to maintain the 5% tax slab and reduce the top tax rate from 35% to 25%.

Welcoming the five-year lock-in on corporate tax rates, FBCCI also sought a 2.5% reduction for listed companies to enhance competitiveness, and proposed lowering the minimum turnover tax on sales from 1% to 0.5% given the current slowdown.

Among specific measures appreciated, FBCCI highlighted:

The reduction of advance income tax on industrial raw material imports from 5% to 4%; reduction of source taxes on basic agricultural commodities including rice, wheat, potato, onion, garlic, ginger, salt, sugar and edible oil to 0.5%; complete withdrawal of the 5% regulatory duty on import of dates and all cooking spices; and reduced withholding tax on foreign loan interest for industrial investment from 20% to 10%.

The federation also welcomed the full import duty waiver, along with VAT and supplementary duty on laptops, desktop computers, servers, printers and monitors, calling it a major push for IT sector development.

On social protection, FBCCI commended free train travel for senior citizens above 65 years of age, a 25% metro rail discount, and expansion in the number and coverage of social safety net beneficiaries.

FBCCI welcomed the government's Tk60,000 crore "Stimulus Package 2026" for easing credit flow to the private sector, along with a Tk2,000 crore allocation for SME development through IDCOL, BIFFL and the SME Foundation.

An additional Tk500 crore allocation for women and youth entrepreneurship was termed a positive step.

Tax and VAT exemptions for startup companies -- including zero turnover tax and full VAT exemption on local purchases and premises rental for startups were also praised.

The trade federation also welcomes the initiative to settle cases related to interest under the 1991 Act and up to 30 June 2022, with a maximum interest rate of 48% within the next six months.

The proposed 20% renewable energy target by 2030 and zero-import-duty on solar energy equipment until 2035 received FBCCI's support as part of a push for a sustainable energy framework.

On the gold and jewellery sector, FBCCI praised the reduction of source tax on gold imports from 5% to 0.5% under the new bonded warehouse regulations, and supported the proposed replacement of 5% VAT on jewellery services with a fixed charge of Tk2,500 per unit.

FBCCI said it is currently reviewing the Finance Bill and related income tax, VAT and customs notifications in consultation with its member organisations, and will submit a comprehensive set of post-budget recommendations to the government after the review is complete.