The provision allowing undisclosed income to be legalised through national budgets is not a demand from the business community but rather the result of political and bureaucratic pressures, former Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman said on Thursday.
“A businessman who does not want to pay taxes will not pay taxes whether a black money whitening facility exists or not,” Rahman said at a dialogue titled “Tax Equity in the National Budget: Observations on the FY2026-27 Revenue Proposals,”organised by the Centre for Policy Dialogue (CPD) at BRAC Centre Inn in the capital.
Calling for closer cooperation between the National Board of Revenue (NBR) and the private sector, Rahman said a disconnect remains between tax authorities and businesses.
“The NBR’s policy wing consults stakeholders and formulates policies, but the administrative side repeatedly fails in implementation,” he said.
Referring to recurring provisions for legalising undisclosed wealth, he argued that such measures are not driven by business demands.
“Past experience shows these decisions emerge from political and bureaucratic considerations, not from the business community,” he said.
Concerns over housing taxes
Rahman also criticised new taxes imposed on the real estate sector, warning that they could further increase housing costs in Bangladesh.
He said property prices had already become unaffordable for many buyers and that additional tax burdens could encourage affluent Bangladeshis to invest in overseas real estate instead of the domestic market.
The former DCCI chief stressed the need to strengthen the health and education sectors, arguing that improvements in public services were essential to reducing the outflow of citizens seeking medical treatment and education abroad.
“No amount of social protection can substitute for quality healthcare and education,” he said.
He questioned whether higher budget allocations alone would improve outcomes in these sectors, emphasising the need for better utilisation of public funds and stronger oversight mechanisms to curb corruption.
Rahman proposed the creation of a “National Accountability Commission” to hold public officials responsible for implementation failures and improve governance across state institutions.
He also called for the full automation of the NBR, saying modernisation of tax administration could significantly boost revenue collection.
Industry groups raise tax concerns
Speaking at the event, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem said some longstanding demands of businesses had been reflected in the budget, but several new tax measures had created concerns for the industrial sector.
He criticised provisions imposing taxes and interest on financial transactions between companies within the same business group.
“When one company faces financial difficulties, another company often provides support. Repeated taxation of such transactions will discourage industrial growth,” Hatem said.
He urged authorities to review how the provisions were introduced and whether they could adversely affect the country’s manufacturing sector.
Need for continuous dialogue
Former NBR Chairman Abdul Mazid said tax fairness should not be discussed only during the budget season.
“There should be a continuous process of consultation before and after the budget, involving businesses, taxpayers, researchers and policymakers,” he said.
NBR Member (Tax Policy) Barrister Mutasim Billah Faruqi said a fair tax system was essential for sustainable revenue mobilisation and social justice.
“Without adequate revenue collection, the state cannot ensure quality public services or promote equitable development,” he said, adding that transparency, accountability and public trust were crucial for improving tax compliance.
Tax gap remains a major challenge
Presenting the keynote paper, CPD Senior Research Associate Tamim Ahmed said Bangladesh’s tax-to-GDP ratio had fallen to the lowest level in South Asia.
He estimated that the government lost around Tk 226,000 crore in revenue during FY2022-23 due to tax evasion and tax avoidance. At the same time, the NBR was collecting only 28-29 percent of potential VAT revenues.
CPD Research Director Khandaker Golam Moazzem, who chaired the discussion, said tax justice was closely linked to the broader issues of revenue mobilisation and wealth distribution.
“The benefits of economic growth should reach all sections of society. However, budget measures often benefit one group while creating disparities for another,” he said.
He stressed that tax equity should be viewed not only through the lens of taxation but also in terms of how public resources are distributed across the economy.