Raising tax rates on high-income earners could trigger an increase in capital flight and discourage compliant taxpayers, a leading business figure has warned during Bangladesh’s pre-budget consultations. the Metropolitan Chamber of Commerce and Industry (MCCI) has warned.
Kamran T Rahman, President of the Metropolitan Chamber of Commerce and Industry (MCCI), made the remarks on Saturday at a discussion organised by the National Board of Revenue (NBR) at its headquarters in Agargaon.
“Higher tax rates on top earners may encourage capital outflows, while honest taxpayers could feel discouraged,” MCCI President Kamran T Rahman said on Saturday at a discussion organised by the National Board of Revenue (NBR) at its headquarters in Agargaon.
He urged policymakers to prioritise widening the tax base instead of increasing rates.
He highlighted a major gap in compliance, noting that although Bangladesh has more than 10 million Taxpayer Identification Numbers (TINs), fewer than half of those holders submit tax returns. “Expanding the tax net would be far more effective than raising rates,” he added.
Business leaders at the meeting also called for reforms to corporate taxation. Hasan Mahmud, a director of MCCI, proposed a 2.5 percentage point reduction in corporate tax and argued for the removal of minimum tax requirements, saying they place an undue burden on businesses.
Women entrepreneurs seek incentives
Representatives of the Women Entrepreneurs Association of Bangladesh also presented a set of proposals aimed at boosting female-led businesses. The group’s president, Nasreen Fatema Awal, called for tax holidays of three to five years for women entrepreneurs and the introduction of specialised tax training programmes.
Responding to the proposals, NBR Chairman Md Abdur Rahman Khan said the authorities would consider the recommendations. He also suggested introducing a fixed value-added tax (VAT) rate for women entrepreneurs, which could simplify compliance by removing the need to file regular VAT returns.
The pre-budget discussions form part of the government’s annual consultation process with stakeholders ahead of the national budget, where business groups, industry representatives and civil society organisations present recommendations on tax policy and fiscal measures.