European firms flag concern, seek predictable tax regime

European businesses operating in Bangladesh have voiced concern over trade preferences extended to certain partner countries, saying such measures risk creating an uneven playing field.

The issue was raised at a pre-budget discussion held on Sunday at Agargaon in the capital.

The event was organised by the European Union Chamber of Commerce in Bangladesh (EuroCham).

In a written statement presented at a meeting with the National Board of Revenue (NBR), EuroCham Chairperson Nuria Lopez said, "We are looking with concern at how Bangladesh is providing trade preferences to other partners that will create an unfair playing field for European businesses."

She, however, did not specify the countries or the nature of such preferences.

Officials noted that Bangladesh had extended certain trade facilities to the United States following the imposition of reciprocal tariffs last year, aiming to boost imports and narrow the trade gap.

Foreign investors at the meeting urged the government to ensure policy predictability and improve the overall investment climate to attract and retain both domestic and foreign investments.

Highlighting the need for administrative accountability, Lopez called for a mandatory timeframe for NBR responses.

"Whether for a licence or approval request, the NBR must have a fixed deadline. Businesses cannot operate effectively under uncertainty," she said, stressing the importance of predictability.

She also expressed concern over the rising tax burden on multinational companies, noting that the tax policy should support, rather than discourage, investment.

EuroCham further underscored the importance of pursuing a free trade agreement (FTA) with the European Union to enhance bilateral trade.

It called for the simplification of VAT and customs procedures and the removal of procedural bottlenecks that act as barriers to trade.

At the same event, the American Chamber of Commerce in Bangladesh (AmCham) emphasised the need for long-term tax certainty to boost investor confidence.

It recommended a gradual reduction in corporate tax rates and the introduction of structured tax stability frameworks for large-scale investments, saying consistent policies are essential for long-term planning.

Besides, it suggested simplifying tax structures, reducing overlapping tax burdens, rationalising minimum tax rates, and addressing double taxation issues to ensure equitable tax treatment across sectors.

"These recommendations aim to create a more balanced, transparent and competitive tax system while supporting sustainable revenue generation," said AmCham President Syed Ershad Ahmed.

To further improve the investment climate, AmCham called for the alignment of domestic regulations with international agreements and clearer guidelines on tax holidays, including benefits, eligibility criteria, and scope. The chamber also stressed the need for modernising tax administration, streamlining compliance procedures, improving VAT refund mechanisms, and advancing institutional reforms, including the planned separation of the NBR.

Meanwhile, the president of the Bangladesh China Chamber of Commerce and Industry, Khorshed Alam, called for lower tax rates for foreign nationals investing in property in Bangladesh.

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