DCCI seeks Tk 500,000 tax-free income threshold in FY27 budget

The Dhaka Chamber of Commerce and Industry (DCCI) has proposed raising the tax-free income threshold to Tk 500,000 and lowering the maximum tax rate to 25 per cent in the upcoming FY2026-27 budget.

DCCI said nearly 80 per cent of the country’s economy remains in the informal sector. With a large number of people outside the tax net, the government loses substantial revenue each year. It noted that automating and simplifying the tax system could help identify potential taxpayers and broaden the tax base.

The observations came at a pre-budget discussion organised by DCCI at hotel InterContinental in the capital on Monday.

Industries and Commerce Minister Khandaker Abdul Muktadir attended the event as the chief guest. Special guests included Monzur Hossain, member of the General Economics Division (GED) of the Planning Commission, and Mahbubur Rahman, president of the International Chamber of Commerce Bangladesh. The session was moderated by DCCI President Taskeen Ahmed.

Speaking at the event, Taskeen Ahmed said global economic uncertainty has deepened amid ongoing geopolitical tensions, particularly in the Middle East. Rising fuel prices, pressure on foreign exchange reserves, higher import costs, and disruptions in global supply chains are posing significant challenges for import-dependent economies like Bangladesh. These pressures are already reflected in production costs, transport expenses, and overall inflation.

In this context, he stressed the need for a timely, effective, and pragmatic budget.

He expressed hope that the upcoming budget would prioritise people’s purchasing power, cost of living, and overall economic stability alongside business interests.

He added that the next fiscal year’s budget should focus on boosting sustainable private sector investment, creating productive employment, and strengthening the private sector’s capacity to withstand global shocks.

DCCI placed 23 proposals for FY2026-27. Key recommendations include raising the tax-free income threshold to Tk 500,000 and reducing the maximum tax rate to 25 per cent. It also proposed aligning the tax rate for non-listed companies with that of listed firms at 25 per cent.

To reform the import and VAT system, DCCI suggested gradually phasing out advance tax for manufacturers and reducing it for commercial importers. It also recommended launching a mobile app alongside the existing online platform to modernise VAT collection, scrapping the advance VAT system, and applying VAT only on the final value.

Additionally, to improve businesses’ financial liquidity, the chamber proposed simplifying the VAT refund process through a “single-step” refund system.

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