The Dhaka Chamber of Commerce & Industry (DCCI) has voiced significant concerns over proposed increases in industrial gas prices and Value Added Tax (VAT), warning that such moves could disrupt business operations, deter investment, and diminish Bangladesh’s export competitiveness.
DCCI highlighted in a statement that such measures would significantly increase production costs, thereby exerting inflationary pressure on both industries and consumers.
The chamber warned that these changes could deter local and foreign investment, jeopardise Bangladesh’s competitive standing in the global market, and hinder the establishment of new industries.
Petrobangla recently submitted a proposal to the Bangladesh Energy Regulatory Commission (BERC) seeking to more than double the per-unit price of gas for industrial and captive consumers, raising it from Tk30 and Tk31.50 to Tk75.72. This proposal aims to reduce the government’s subsidy burden on gas production costs.
Concurrently, the National Board of Revenue (NBR) has raised the income tax for manufacturers of motorcycles, refrigerators, air-conditioners, and compressors from 10% to 20%, reversing a previous commitment to maintain reduced rates until 2032.
“The proposal to increase gas prices without ensuring uninterrupted supply presents a formidable challenge for businesses,” the DCCI stated.
“The cost of doing business will skyrocket, impacting both domestic and export-oriented industries. This would not only reduce profitability but also erode Bangladesh’s competitiveness in international markets.”
In its statement, the DCCI also criticised the inconsistent policy environment. It argued that the abrupt withdrawal of promised tax incentives could tarnish Bangladesh’s reputation as an investment-friendly destination.
“Such a reversal sends a detrimental message to both local and foreign investors, undermining confidence and casting doubt on policy reliability,” the statement added.
A Call for Collaboration
The DCCI urged the government, BERC, and Petrobangla to reconsider the proposed gas price hike. It also called for a review of the VAT and tax rate increases, suggesting that these measures could exacerbate inflationary pressures and operational costs for businesses, particularly during a time of global economic uncertainty.
“To foster sustainable economic growth, it is imperative to maintain a stable, business-friendly environment,” the DCCI noted.
“This requires long-term policy commitments, tax benefits, and active collaboration between the government, private sector, and other stakeholders.”
Broader Implications
The proposed tax hike on manufacturing industries such as motorcycles, refrigerators, and air-conditioners comes at a time when businesses are already grappling with an unstable economic climate.
DCCI warned that these measures could dampen local industrial activity, reduce foreign investment, and ultimately curtail economic recovery.
With Bangladesh striving to recover amid global economic challenges, the DCCI reiterated the need for “cost-effective policies that ensure continuity and stability.”
It argued that policy reversals and steep cost increases could undermine the country’s efforts to attract investors and sustain economic momentum.
