The Foreign Investors' Chamber of Commerce & Industry (FICCI) has voiced serious concerns over the government’s recent increase in value-added tax (VAT) and supplementary duty (SD) without prior consultation with key stakeholders. The chamber warned that the changes could have detrimental effects on business sustainability, consumer costs, and overall economic stability.
In a press release, FICCI, which represents 90% of Bangladesh’s total foreign direct investment (FDI) across crucial sectors such as tobacco, telecom, energy, and finance, highlighted the potential risks posed by the revised tax measures.
The VAT increase to 15% on services such as procurement, maintenance, transport, and restaurants, coupled with restrictions on input VAT recovery, is expected to place an additional burden on businesses, the chamber said. Furthermore, the 2.5% hike in retail VAT could lead to higher consumer prices, dampen demand, and ultimately reduce government revenue, FICCI warned.
The chamber also expressed concerns that policies implemented without adequate engagement with stakeholders could undermine investor confidence, potentially deterring future FDI and harming Bangladesh's business sector.
FICCI called on the government to engage in dialogue with the business community and proposed reforms to simplify the VAT system, promote digitisation, and enhance sales-driven tax strategies.
Reaffirming its commitment to a sustainable economy, FICCI emphasised the importance of collaborative policymaking to maintain fiscal responsibility while ensuring Bangladesh remains an attractive destination for investment.
