Amid the global geo-political turmoil and the current challenges of the international and local economies, increasing VAT on more than a hundred products, tax on some industries and the initiative to hike gas price are catastrophic decisions for businesses, investment as well as for the overall economy, Dhaka Chamber of Commerce & Industry (DCCI) President Taskeen Ahmed has said.

At a press conference on Saturday, he highlighted different issues of the contemporary economic situation of the country along with the priority of the chamber for the year 2025.

Taskeen noted that the country's private sector is already facing many challenges due to global geopolitical instability, its impact on the international and local economy, foreign exchange reserves, rising import cost, high energy cost, high inflation, high interest rates, high tariff rate, increasing VAT rates and above all, deteriorating law and order situation.

He said this year the Dhaka Chamber will focus more on reducing interest rates, controlling inflation and keeping the foreign exchange rate stable.

The flow of low-cost finance to the cottage, micro, small, and medium enterprises (CMSME) sector needs to be expedited more. The CMSME sector is solely the largest sector in Bangladesh that creates the most employment opportunities, he said.

About the reform initiatives taken by the interim government, he expressed his expectation that the government will complete the reform activities related to the private sector as per their set target soon.

He later said that completing hundred economic zones by the year 2030 with all facilities is not an easy task. Rather, if the government is able to ensure all required infrastructure and other facilities in the five economic zones, then domestic and foreign investors will be more optimistic and there will be a possibility of expanding investment activities.

Regarding the continuation of the policy, he said entrepreneurs are encouraged to invest subject to obtaining a long-term supportive tax structure, in which case the sudden decision to increase tax or duties in the mid-way will have a negative impact on the entrepreneurs, which is not desirable at all. As a result of this, local investment as well as foreign investment may be hindered, which may not bring any good for the economy.

For preparation of LDC graduation, Bangladesh was actually moving on the right direction, but due to the COVID-19 pandemic, the Russia-Ukraine war, unrest in the Middle Eastern region, aftermath of local political unrest coupled with geo-political situation, instability in the financial market, low forex reserve, the LDC preparedness has unexpectedly faced a setback.

He said, “How prepared we are in the current situation will need to be determined on the basis of detailed discussions among the public, private and other stakeholders. If there is a need to defer the matter, the government may take some more time to be graduated considering the overall economy of the country based on a collective national decision.

“However, it should be remembered that if we graduate in 2026, the government will have to ensure comprehensive cooperation with the private sector to overcome its challenges.”

The DCCI president said the tax-GDP ratio in Bangladesh is very low. Moreover, the number of taxpayers in the country is also not up to the expected level. To meet up the budget deficit and lessen the pressure on the economy, he suggested the government take austerity measures in government expenditures.

At the same time, he also urged the government not to take unnecessary projects and enhance strong monitoring on implementation of ADP so that the projects end on time.

DCCI Senior Vice President Razeev H Chowdhury and Vice President Md Salem Sulaiman and members of the board of directors were also present on the occasion.