Bangladesh's leading business chamber has welcomed the government's proposed FY2026-27 budget as broadly supportive of investment and private-sector growth, while cautioning that its success will depend on whether ambitious revenue targets and reform commitments can be effectively implemented.

Dhaka Chamber of Commerce & Industry (DCCI) President Taskeen Ahmed said on Thursday that the Tk 9.38 trillion budget contains several measures aimed at improving the business climate, encouraging investment and supporting industrial expansion.

Speaking at a briefing on the chamber's initial reaction to the budget, Ahmed described the spending plan as "business and investment friendly" but warned that implementation would be the ultimate test.

The budget targets a 30.34% increase in revenue collection, a goal DCCI said would be difficult to achieve under current economic conditions. The chamber also expressed concern over the government's continued reliance on borrowing to finance a projected deficit of nearly Tk 2.5 trillion, arguing that excessive bank borrowing could hamper the recovery of the financial sector and constrain private-sector access to credit.

DCCI welcomed several tax reforms, including treating withholding tax as advance tax, reducing withholding tax on industrial raw materials to 4%, maintaining VAT rates while expanding the tax base, and introducing quarterly online VAT return submissions.

The chamber also praised tax incentives for healthcare, renewable energy and electric vehicle industries, as well as the government's decision to announce a five-year tax framework aimed at providing greater policy predictability for investors.

However, business leaders voiced disappointment that the tax-free income threshold remained unchanged despite persistent inflation and urged the government to raise the exemption limit to Tk 500,000.

The chamber strongly endorsed measures targeting small and medium-sized enterprises, including a Tk 5,000 crore allocation under Bangladesh Bank's stimulus programme for CMSMEs, turnover tax exemptions for smaller businesses and the introduction of digital microloans.

DCCI also highlighted reforms aimed at improving Bangladesh's investment climate, including plans for free trade zones, faster investor visas and work permits, lower taxes on foreign loan interest payments and the expansion of single-window services.

While praising incentives for electric vehicles and clean energy investments, the chamber cautioned that the budget does not adequately address Bangladesh's long-term energy challenges. It called for a transparent and predictable energy pricing framework, arguing that temporary subsidies alone would not be sufficient to attract sustained investment in the sector.

Ahmed said the budget contains several promising initiatives, but stressed that effective implementation—not policy announcements—would ultimately determine whether the government's economic objectives are achieved.

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