No adverse steps for businesses in upcoming budget

The government will not introduce any adverse measures for businesses in the upcoming national budget for the fiscal year 2026-27, Commerce and Industries Minister Khandakar Abdul Muktadir said yesterday.

He said Bangladesh needs to expand its tax net to ensure fiscal discipline, but stressed that the aim is not to increase the tax burden on individuals. Instead, the focus will be on widening the tax base.

The minister made the remarks at a pre-budget discussion in Dhaka, organised by the Dhaka Chamber of Commerce and Industry (DCCI) in association with Channel 24 and the daily Samakal.

He expressed hope that the upcoming budget and related measures would deliver positive results and voiced confidence in the finance minister and the National Board of Revenue (NBR).

“I have full confidence in the finance minister, who is business-friendly and understands economic management. I urge the private sector to trust us as we work together to move the country forward,” he said.

He also pointed to global conflicts, especially in the Middle East, as a reason for rising international commodity prices, saying the situation has reduced fiscal space.

The minister said the government is now buying liquefied natural gas (LNG) from the spot market at $20 per unit, compared to $10 earlier. Crude oil prices have risen from $50-60 to $116, while fertiliser prices have increased from $456 to over $800.

“These price increases have reduced the government’s fiscal space and policy flexibility,” he said.

He added that if Bangladesh had adequate LNG reserves, it would not need to rely on expensive spot-market purchases.

Planning Commission member Monzur Hossain said the economy is currently weak and slowing down, adding that the government’s goal in the upcoming budget is to restore stable growth.

He said achieving the 6 percent growth target next fiscal year will not be possible without stronger industrial growth.

ECONOMY UNDER PRESSURE AS CREDIT TIGHTENS

At the event, International Chamber of Commerce (ICC) Bangladesh President Mahbubur Rahman said Bangladesh has long discussed improving its tax-to-GDP ratio but has not yet found effective solutions.

He said the tax system remains unfair, as compliant taxpayers carry a heavier burden while many non-payers remain outside the tax net.

He also raised concerns over declining credit flow to the private sector.

“High interest rates, liquidity shortages and tight lending policies are discouraging new investment, slowing industrial expansion and job creation,” he said.

The DCCI said heavy government borrowing from the banking system is tightening liquidity, making it harder and more expensive for businesses, especially small and medium enterprises, to access loans.

The chamber urged the government to reduce reliance on bank borrowing, warning that it could crowd out private sector credit.

It added that between July last year and April 1, the interim government and the BNP-led government together borrowed at least Tk 1.03 lakh crore, which is 99.54 percent of the target for the current fiscal year 2025-26.

The DCCI said reducing pressure on the banking system is essential to support private sector-led growth.

Professor Akhand Mohammad Akhtar Hossain, chief economist of Bangladesh Bank, said government borrowing must be reduced and bank borrowing should be controlled to ease pressure on private sector credit.

He also warned that rising external borrowing could increase risk and weaken investor confidence.

Referring to weak growth of around 3 percent, he said job creation remains insufficient, and neither fiscal nor monetary stimulus alone can solve the problem without long-term growth momentum.

He cautioned against expansionary policies, saying a “populist budget is not advisable”. Instead, he called for conservative fiscal measures and tight monetary policy, even if they limit short-term demand.

Former DCCI president Rizwan Rahman said businesses are facing serious difficulties due to bureaucratic hurdles and what he described as an aggressive approach by the NBR.

He said the failure to expand the tax net is increasing pressure on existing taxpayers as a short-term measure.

He called for grassroots investment incentives, warned against printing money to control inflation, and urged higher allocations for health and education.

Another former DCCI president, Hossain Khaled, called for full automation of the tax system, including banking transactions. He said most economic activity still takes place outside formal channels, limiting revenue collection.