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, aiming to improve 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, along with introducing a unified VAT structure to simplify the country’s overall taxation system.
The proposals were presented 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 Dhaka.
During the event, JBCCI emphasised the importance of investment, competitiveness, fiscal modernisation, and sustainable economic growth. The chamber highlighted the need to improve Bangladesh’s investment climate, strengthen industrial competitiveness, increase revenue through economic expansion and formalisation, and support long-term sustainable growth.
Speaking at the press conference, JBCCI leaders said Bangladesh is currently undergoing a critical economic transition amid global uncertainty, inflationary pressure, rising financing costs, and preparations for post-LDC graduation.
In this context, they stated that the upcoming national budget should prioritise growth, investment, and fiscal modernisation rather than focusing only on revenue collection.
The chamber also observed that several countries are adopting lower corporate tax regimes to attract Foreign Direct Investment (FDI), while Bangladesh’s relatively high corporate tax burden is discouraging industrial expansion and capital inflow.
JBCCI further proposed rationalising the Tax Deducted at Source (TDS) and withholding tax structure.
It 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 straining business cash flow, creating working capital pressures, and increasing the overall cost of doing business.
The chamber also suggested 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.
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