The adoption of International Financial Reporting Standards (IFRS) for SMEs will strengthen access to finance and investment, boost global competitiveness, and reduce the risks of financial misreporting.
It will also provide a structured framework that enhances financial transparency.
SMEs are the lifeline of Bangladesh’s economy, contributing over 25% to the GDP.
The President of the Dhaka Chamber of Commerce & Industry (DCCI), Taskeen Ahmed, made these remarks during a focus group discussion on the “Implementation of IFRS for SMEs” held at DCCI on 22 March 2025.
He also stated that IFRS will significantly impact tax revenue collection by improving compliance, minimizing tax evasion, and bringing more businesses into the tax net.
He further mentioned that limited financial capacity, shortages of skilled manpower, and the compliance cost create barriers to adopting IFRS for SMEs. However, he emphasized the need for investment in training and regulatory alignment.
Dr. Mohammad Abu Yusuf, Chairman (Acting), Financial Reporting Council, said that IFRS is crucial for SMEs to comply with international standards. However, its implementation remains challenging for our SMEs due to a lack of knowledge, skilled workforce, simple procedures, and awareness.
He opined that there is no alternative to enhancing the capacity of SMEs to make them interested in implementing IFRS. SMEs need to focus more on IFRS implementation to improve tax compliance, access capital from the capital market, and sign international trade agreements.
Md. Amir Uddin, Executive Director, Bangladesh Bank, said that the implementation of IFRS should focus on improving the image of local SME entrepreneurs in the global arena. However, it is necessary to provide training to improve their skills. Entrepreneurs must be well aware of the benefits of implementing IFRS.
Nawshad Mustafa, Director, SME & Special Programmes Department of Bangladesh Bank, noted the lack of trained and skilled accounting professionals in the country, especially for SMEs. “To implement IFRS in a practical manner, an enabling environment is necessary,” he said. He added that IFRS is already implemented in 80 countries, and it is essential for Bangladesh to adopt it, but this should be done without affecting the business activities of the SME sector. He again stressed the need for a supportive environment for its implementation.
Mohammad Jahangir Hossain, General Manager, SME Foundation, said that the SME Foundation provided accounting software to a few SME entrepreneurs, but it was not widely adopted due to a lack of skills and interest.
He then proposed the development of sector-specific customized accounting software for the SME sector to make it easier. He emphasized the need for facilitation and training for further implementation of IFRS.
Sk. Md. Tarikul Islam, FCA Partner, Hoda Vasi Chowdhury & Co. Chartered Accountants, presented the keynote paper.
He said that capacity building, training for accountants and auditors, and initial transition costs are some of the challenges for implementing IFRS. Regulatory bodies, professional organizations, and financial institutions can play a vital role in facilitating a smooth transition, he added. He also highlighted the key benefits of IFRS for SMEs, such as simplified reporting, cost-effective compliance, enhanced credibility, and facilitating growth. However, he urged for easier access to finance, lower tax and VAT rates, reduced tax rates for green businesses, tax incentives for SME startups, and a simplified tax-paying process for the SME sector.
During the open discussion, DCCI Convener Lutful Hadee noted that there are about 2,200 chartered accountants in the country, of which about 600 are in practice. Additionally, about 40,000 part-qualified accounting professionals are in the market after completing various pertinent courses. However, the country still needs more trained accounting professionals to cope with the growing demand.
DCCI’s Joint Convenor, Md. Shafiqul Alam, called for uniformity in the definition of SME across the policies and regulations of various institutions.
DCCI’s Senior Vice President Razeev H. Chowdhury and Vice President Md. Salem Sulaiman were also present during the meeting.