FICCI warns on revenue collection goals

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has welcomed the proposed national budget for offering greater policy predictability and positive signals for investment, while raising concerns over the government’s ambitious revenue target.

The chamber said efforts to control inflation, attract foreign direct investment (FDI) and ensure fiscal stability are encouraging. However, it questioned the feasibility of the projected revenue growth amid a slowdown in economic growth.

“The projected 40 percent growth in revenue collection compared to actual collection appears highly ambitious, especially when the economy is growing at around 4 percent while the GDP growth target is 6.5 percent,” said FICCI President Rupali Haque Chowdhury at a post-budget briefing at FICCI’s office in Dhaka yesterday.

“This remains a concern for us,” she added.

FICCI highlighted competitiveness gaps with regional peers, including higher corporate tax rates and energy constraints, and urged improvements in ease of doing business and stronger infrastructure to attract and retain investment

She warned that when revenue targets are not met, governments often introduce supplementary duties and additional taxes, increasing the burden on compliant taxpayers while many potential taxpayers remain outside the tax net.

“We believe the revenue gap should be addressed by expanding the tax base and identifying new sources of revenue, rather than imposing additional taxes on compliant businesses,” she said.

Chowdhury also praised the government’s efforts to improve policy predictability, saying investors need a stable fiscal environment for long-term investment decisions.

“For years, businesses have sought consistency in fiscal policies. This budget signals that corporate and personal tax policies will remain stable in the coming years, which is a positive development,” she said.

However, she noted that Bangladesh still lags behind regional competitors in key areas. She pointed out that Vietnam’s corporate tax rate is about 20 percent, compared to 27.5 percent in Bangladesh, while several Indian states offer extensive investment incentives.

Chowdhury said Bangladesh must benchmark itself against competing investment destinations, as global investors have multiple options when choosing where to invest.

She added that while the country’s large and trainable workforce remains a major strength, challenges in energy supply, utility services and overall ease of doing business continue to affect competitiveness.

She noted that many industries have already invested but are unable to begin operations due to gas shortages, called for expanded LNG infrastructure, and improved energy supply.

She also questioned the rationale for utility surcharges in economic zones, arguing that production costs in special economic zones should be lower than outside them.

On foreign investment, Chowdhury welcomed the proposed 1.5 percent incentive for FDI, calling it a strong signal that Bangladesh is prioritising foreign investors.

“FDI brings technology transfer, creates employment, and supports the development of backward-linkage industries,” she said, citing China’s experience.

She also highlighted recent reforms in customs and tax administration, including the Authorised Economic Operator programme, online tax return filing and wider digitisation efforts, saying these could significantly improve investor confidence once fully implemented.

“The direction is positive,” Chowdhury said. “The real test will be whether existing investors expand their investments. That will be the strongest signal for new investors considering Bangladesh.”

At the event, FICCI tax consultant Snehasish Barua presented the chamber’s detailed observations. Vice-President Mohammad Iqbal Chowdhury, Director Habibur Rahman Bhuiyan and Executive Director TIM Nurul Kabir were also present at the press meet.