Traders, especially small entrepreneurs from Old Dhaka—one of the country’s oldest and largest business hubs—have called for the introduction of a package VAT on essential commodities to help contain inflation.
They made this request during a view-exchange meeting with small and medium entrepreneurs in Old Dhaka, organised by the Dhaka Chamber of Commerce & Industry (DCCI) on February 8, 2025.
The businessmen highlighted a range of challenges, including severe traffic congestion, waterlogging, weak infrastructure, limited access to finance for SMEs, deteriorating law and order, rising dollar prices, delays in import/export procedures, high loan interest rates, and increasing VAT and tax rates, which they claim have made doing business more difficult.
Business leaders from various specialised associations of Old Dhaka, along with representatives from several other business organizations, attended the meeting.
Special guests at the event included Md. Jashim Uddin, Deputy Commissioner of Dhaka Metropolitan Police (Lalbag Division), Dr. Md. Selim Al Mamun, Director (Research) and Chief Economist at Bangladesh Bank, and Manash Kumar Barman, Additional Commissioner, Customs, Excise, and VAT Commissionerate (South Dhaka) from the National Board of Revenue (NBR).
In his welcome speech, DCCI President Taskeen Ahmed emphasised the need for a simplified tax and VAT system tailored to the size and nature of businesses.
He also called for the removal of complexities in import-export procedures and a realistic VAT rate.
He noted that despite Old Dhaka being one of the oldest business hubs in the country, entrepreneurs in the area have been grappling with escalating traffic congestion, infrastructure issues, and tax-related challenges. He urged for joint action from both the government and private sectors to address these problems and stressed the need for an improved law and order situation for a business-friendly environment.
Dr. Md. Selim Al Mamun, Chief Economist at Bangladesh Bank, informed the meeting that the local dollar rate had depreciated by 35% from 2022 to 2024, causing instability in currency management. However, he assured that the central bank is working to stabilize the exchange rate. He also noted an increase in imports by 3.5% and exports by 10.9% over the past six months, with remittances reaching USD 16 billion in the last seven months. Additionally, he shared that a task force had been formed to recover siphoned funds.
Manash Kumar Barman, Additional Commissioner at NBR, said the government had already initiated steps to automate the VAT system, including online VAT registration, to ease payment and reduce harassment.
He urged entrepreneurs to ensure that VAT payments are made only with receipts, and clarified that VAT for traders is calculated based on the value addition of the product, not the manufacturing price.
Md. Jashim Uddin, Deputy Commissioner of Police (Lalbagh Division), assured that traffic police would be deployed at eight key locations to ease congestion in Old Dhaka. He also encouraged businessmen to recruit volunteers and take the help of the police in transporting cash during Ramadan. He further shared plans to implement one-way traffic systems on certain roads and called for a collective approach to tackling juvenile gangs, known as “Kishore gangs,” which are often involved in crimes and are sometimes under the age of 18.
Matiur Rahman, former DCCI president, suggested reducing the LC margin regardless of bank-client relationships and opposed mid-year tariff rate changes through SROs.
Manwar Hossain, Chairman of Anwar Group of Industries, stressed the need to expand the tax net by lowering tax rates, while Alhaj Abdus Salam, former DCCI senior vice-president, pointed out that increasing tax and VAT rates amid rising traffic congestion was harming the sales and profitability of Old Dhaka traders.
During the open discussion, sectoral trade associations reiterated the call for a package VAT system on essential goods, simplification of the tax-VAT system, improved traffic management, enhanced law and order, and the reduction of VAT rates. Other key suggestions included the imposition of duties on imported product tariff values, reducing government expenditures, and streamlining port processes.
The event concluded with DCCI President Taskeen Ahmed presenting membership certificates to 33 newly enrolled members of the DCCI.
