The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has welcomed a range of reform-oriented measures proposed in the Finance Bill 2026 and the national budget for FY2026-27, describing them as positive steps toward improving Bangladesh’s investment climate.
However, the chamber has also raised concerns over several provisions that it believes could affect the country’s competitiveness in attracting foreign investment.
In a statement issued on Thursday, FICCI said the government’s strategic “3R” framework—Recovery, Restoration and Reconstruction—demonstrates a commitment to building an inclusive, non-discriminatory and investment-driven economy. The chamber characterized the Finance Bill as a progressive and business-friendly initiative aimed at enhancing transparency, predictability and digitalization across the tax, VAT and customs systems.
According to FICCI, the proposed reforms are expected to strengthen investor confidence, facilitate trade and investment, and support sustainable economic growth.
Among the most significant measures welcomed by the chamber is the proposal to treat tax deducted at source as advance tax rather than minimum tax.
FICCI noted that the move aligns with international practices and will help ease working capital pressures for businesses. The introduction of an automated and faceless tax refund system was also praised as a major step toward improving cash flow management and reducing administrative hurdles.
The chamber further welcomed the repeal of provisions that disallow legitimate business expenses due to non-deduction of tax at source, along with increased limits for perquisites and promotional expenses, recognition of interest expenses on an accrual basis, and reduced disputed tax requirements during the appeals process.
In the area of VAT administration, FICCI highlighted the transition from monthly to quarterly VAT return submissions as a significant reform that would reduce compliance burdens and lower administrative costs for businesses.
It also welcomed reductions in withholding tax rates on raw material imports, foreign loan interest and machinery rentals, saying the measures would help reduce production and financing costs.
Additionally, the launch of the “BanglaBiz” platform and the simplification of profit repatriation procedures were identified as important initiatives that could enhance Bangladesh’s attractiveness to foreign investors.
Despite these positive developments, FICCI expressed concerns about several aspects of the budget. While corporate tax rates remain unchanged, the chamber pointed out the absence of a long-term roadmap for corporate tax reduction, arguing that such a strategy is essential for maintaining competitiveness against regional investment destinations.
The chamber also cautioned against the immediate mandatory implementation of the eVAT system for large and multinational taxpayers, warning that insufficient transition time and limited field-level preparedness could create operational challenges.
FICCI further voiced concern over the proposed increase in the highest personal income tax rate to 35 percent, saying it could raise the cost of employing skilled foreign professionals. It also highlighted ambiguities regarding the deductibility of business expenses during periods of global inflation, which could increase compliance costs.
On the broader fiscal outlook, FICCI noted that the proposed budget of BDT 938,000 crore, equivalent to 13.7 percent of GDP, includes substantial allocations for education and healthcare. However, it described the government’s revenue collection target of BDT 6.95 lakh crore as highly ambitious under current economic conditions.
The chamber emphasized that the success of the Finance Bill and budget reforms will ultimately depend on effective implementation, policy certainty, institutional capacity and continued improvements in the ease of doing business.