FICCI Urges Bangladesh to Raise Tax-to-GDP Ratio to 22%

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The Foreign Investors’ Chamber of Commerce and Industry (FICCI) emphasized the necessity for Bangladesh to elevate its tax GDP ratio to 22 percent to realize the goals outlined in Vision 2041. This proposal was articulated during a pre-budget meeting convened by the National Board of Revenue (NBR).

At the session held at the NBR office in Agargaon, FICCI President Zaved Akhtar spearheaded the delegation, which included Board of Director Mohammad Iqbal Chowdhury, Executive Director T.I.M. Nurul Kabir, and other committee members. The meeting was presided over by NBR Chairman Abu Hena Md. Rahmatul Muneem saw active participation from various stakeholders.

During the consultation, FICCI Tax Consultant Snehasish Barua elucidated the chamber’s budget recommendations for the fiscal year 2024-25. President Zaved Akhtar underscored FICCI’s pivotal role as the representative body of approximately 210 foreign companies operating in Bangladesh, contributing over 30 percent of the government’s total revenue.

Akhtar emphasized that achieving the ambitious targets outlined in Vision 2041 hinges upon elevating Bangladesh’s Tax GDP Ratio from the current 8.74 percent to 22 percent, necessitating robust collaboration from the private sector. FICCI expressed its eagerness to collaborate and contribute to the nation’s progress and welfare.

The chamber identified the imperative for a comprehensive and Integrated Digital Architecture to facilitate efficient tracking of economic transactions and enhance tax collection. FICCI commended certain digitalization initiatives by the revenue board but advocated for further simplification of taxation systems and the elimination of manual processes to enhance compliance and reporting, consequently augmenting revenue.

To expand the tax net, FICCI proposed immediate integration with various government agencies, including City Corporations and Land Registration, to bring more taxpayers into the system. Additionally, FICCI shared its recent research report titled “Catalyzing Greater FDI for Vision 2041: Priorities for Building a Conducive Tax System in Bangladesh” with NBR, outlining recommendations such as collaboration for the development of an integrated system for internal revenue mobilization and optimizing effective tax rates to attract greater Foreign Direct Investment (FDI). The report also advocates for simplifying taxation, ensuring faster resolution of import and export issues, and unifying VAT rates to incentivize value addition.