MCCI Proposes Major Tax and Customs Reforms for FY 2026-27 Budget

The Metropolitan Chamber of Commerce and Industry (MCCI) has proposed major reforms to Bangladesh’s tax and customs system ahead of the national budget for FY2026–27. It called for a modern, transparent, and business-friendly tax structure to support private sector growth.

The proposals were presented at a seminar held at a hotel in Dhaka on Sunday (April 19), jointly organized by MCCI and the Economic Reporters Forum (ERF). The session focused on “National Budget 2026–2027: Priorities and Perspectives of the Private Sector.” Former ICAB president Md. Shahadat Hossain and ERF President Daulat Akhter Mala were present.

Speakers said Bangladesh’s tax-to-GDP ratio, currently around 6.5% to 7.3%, remains too low for sustainable development. They stressed the need to rebuild trust in the tax system.

MCCI said investment will not improve without transparency and accountability in tax administration. It proposed setting deadlines for opening tax files, stopping estimated tax assessments, and introducing digital systems for tax hearings.

VAT and Customs Reforms

The organization recommended raising the VAT registration threshold for small and medium enterprises (SMEs). It also suggested simplifying customs refunds through online banking and harmonising customs procedures for industrial equipment.

Capital Market and Investment

MCCI proposed tax exemptions for zero-coupon bonds and treasury bonds, along with aligning income tax rules with International Financial Reporting Standards (IFRS) to encourage long-term investment.

Tax Structure Concerns

The chamber noted that about 66% of revenue comes from indirect taxes, which increases pressure on low-income groups. It urged a shift toward a more balanced system by expanding direct taxation.

Business Facilitation Measures

Key proposals include introducing a risk-based audit system, reducing business harassment, lowering High Court tax case prepayments from 25% to 10%, rationalising TDS rates, and fixing TDS on export earnings at 0.50%.

Speakers said these reforms would improve revenue collection and create a more predictable and competitive environment for both local and foreign investors.