Japan chamber calls for reducing corporate tax to 20pc

The Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) has proposed reducing the corporate tax rate for the private sector from the existing 25 per cent to 20 per cent in a bid to enhance Bangladesh’s competitiveness in attracting both domestic and foreign investment.

The chamber also recommended lowering the standard Value Added Tax (VAT) rate from 15 per cent to 7.5 per cent and introducing a unified VAT structure to simplify the country’s overall VAT system.

The proposals were placed at a pre-budget press conference on the national budget for the 2026–27 fiscal year held at Ascott The Residence in the Baridhara Diplomatic Zone of the capital.

During the event, JBCCI stressed the importance of investment, competitiveness, fiscal modernisation and sustainable economic growth.

The chamber focused on improving Bangladesh’s investment climate, strengthening industrial competitiveness, increasing revenue collection through economic expansion and formalisation, and supporting sustainable long-term growth.

Speaking at the press conference, JBCCI leaders said Bangladesh is currently passing through a critical economic transition amid global economic uncertainty, inflationary pressure, rising financing costs and preparations for post-LDC graduation.

In this context, the chamber said the upcoming national budget should prioritise growth, investment and fiscal modernisation rather than focusing solely on revenue collection.

The chamber observed that many countries are adopting lower corporate tax regimes to attract Foreign Direct Investment (FDI), while Bangladesh’s comparatively high corporate tax burden is discouraging industrial expansion and capital inflow.

JBCCI also proposed rationalising the Tax Deducted at Source (TDS) and withholding tax structure.

Read More

Japan PM says oil crisis has 'enormous impact' in Asia-Pacific

The chamber recommended significant reductions in TDS rates applicable to suppliers, subcontractors, service providers, rental payments and non-resident service providers.

According to JBCCI, excessive withholding taxes are putting pressure on business cash flow, creating working capital constraints and increasing the overall cost of doing business.

It also recommended that taxation should primarily be based on net profit rather than excessive advance or minimum tax mechanisms.

Among others present at the event were JBCCI President Tareq Rafi Bhuiyan, Secretary General Maria Howlader and former president Matiur Rahman.