FICCI fears extra tax burden on individuals and businesses

The Foreign Investors' Chamber of Commerce and Industry (FICCI) has expressed its mixed reactions on the proposed national budget for fiscal year (FY) 2025-26.

It hailed the government for its intentions towards reforms and fiscal consolidation in the proposed budget that was presented by the Finance Adviser Dr. Salehuddin Ahmed on Monday.

At the same time, the chamber expressed its concerns over the implementation of several tax measures, which, according to it, could create burden disproportionately on individuals and businesses.

FICCI President Zaved Akhtar made the observations at a post-budget press briefing held at its office in city.

The FICCI mentioned that the revised tax slabs could increase tax burden by 50-60 per cent on salaried individuals having monthly incomes between Tk 70,000 and Tk 100,000 and 20-30 per cent for incomes between Tk 120,000 and Tk 175,000.

It, however, said rise in minimum tax-from 0.6 per cent to 1.0 per cent for companies and from 0.25 per cent to 1.0 per cent for individuals-would be a threat to SMEs and loss-making firms, as well as to inflation-hit citizens.

"Companies incurring losses will still be liable to pay 1.0 per cent turnover tax, which may strain struggling enterprises," FICCI warned.

Expressing its criticism over the imposition of a 27.5 per cent corporate tax on listed companies with less than 10 per cent public shareholding and the withdrawal of reduced tax rates for cashless companies, it termed such steps 'counterproductive' to capital market development.

The sharp hike in the VAT (value added tax) on online sales from 5.0 per cent to 15 per cent would hamper the digital commerce sector, while an increase in customs duty on beverage concentrates from 10 per cent to 15 per cent might lead to higher consumer prices, FICCI pointed out.

Nevertheless, the Chamber appreciated the government's push for modernization of tax administration, including automation and rollout of the National Single Window.

It also supported separation of tax policy from the revenue collection wing.

With 88 per cent of revenue projected to be generated from the National Board of Revenue, the FICCI stressed the importance on realistic, inclusive, stable tax policy reforms to encourage compliance and investment. The FICCI, however, appreciated the government setting the country's economic growth targets of the country's gross domestic product (GDP) at 6.5 per cent and a lower rate of inflation at 8 per cent for the next fiscal.

Former FICCI Presidents Rupali Haque Chowdhury and Naser Ezaz Bijoy also shared their observations on the Finance Ordinance 2025.

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