MCCI backs growth push, warns on revenue reality

The Metropolitan Chamber of Commerce and Industry (MCCI) has welcomed the government's record Tk9.38 lakh crore budget for FY2026-27, but cautioned that an ambitious revenue target, a weak investment climate and expanded tax authorities’ access to personal data could create fresh challenges for businesses and taxpayers.

In its reaction to the national budget unveiled on Thursday, the country’s leading business chamber described the Tk6.95 lakh crore revenue target as highly ambitious, noting that the National Board of Revenue (NBR) had collected only 65% of its revised target by April of the outgoing fiscal year.

“Without structural reforms, attempts to meet the revenue target may increase pressure and harassment on taxpayers,” MCCI said in a statement, warning that additional taxes could fuel inflation and raise the cost of essential goods.

The chamber also expressed concern over Bangladesh's declining investment rate, which fell to 27.93% of GDP in FY2025-26, the lowest level in a decade. Private investment stood at 21.53% of GDP, a trend MCCI said was undermining job creation and increasing poverty risks.

While welcoming the government's focus on economic recovery, employment generation and social protection, MCCI questioned whether implementation capacity would match the scale of the budget.

It noted that Annual Development Programme (ADP) implementation reached only 41.41% during the July-April period, while revenue collection remained significantly below target.

The chamber voiced particular concern over proposed data-sharing provisions between government agencies and tax authorities, warning that inadequate legal safeguards could expose citizens and businesses to privacy violations.

“Such connectivity could facilitate misuse of information, unauthorised surveillance and unethical data exploration,” MCCI said, calling for robust legal and technological protections before any large-scale information-sharing framework is introduced.

MCCI welcomed several tax reforms, including lower appeal deposits for tax disputes, relaxation of source-tax penalties and higher allowances for business expenses, describing them as steps towards a more business-friendly tax regime.

However, it criticised the absence of reforms to the minimum turnover tax, arguing that companies could still be required to pay taxes despite incurring losses, hurting cash flow and competitiveness.

The chamber also warned that reducing investment tax rebates and increasing the minimum tax rate for individuals could discourage savings and weaken tax compliance among middle-income earners.

MCCI praised initiatives aimed at improving the business climate, including the planned BanglaBiz one-stop digital platform, expansion of trade agreements and a Tk 60,000 crore stimulus package. It also welcomed increased spending on education and healthcare, expansion of social safety programmes and efforts to digitalise tax administration.