IBFB Flags Fiscal Flaws, Calls for Structural Reform in Proposed Budget
The International Business Forum of Bangladesh (IBFB) has expressed concern that the proposed national budget for the fiscal year 2025–26 discourages digital entrepreneurs and neglects the private sector, despite allocating funds for green technology, women entrepreneurs, and formalizing the e-commerce sector.
In its post-budget reaction, the organization called for structural reforms to provide strategic incentives and support to the private sector. It stated that “the proposed budget overlooks the private sector, with no effective incentives for small and medium enterprises (SMEs), exporters, or startups. There is also an absence of significant allocations for research, technical training, and digital transformation, while social protection efforts remain inadequate.”
The IBFB specifically criticized the increase in turnover tax from 0.6% to 1% and the hike in online platform tax from 5% to 15%, warning that such changes would deter budding entrepreneurs.
However, the organization appreciated certain aspects of the budget, including the BDT 1,000 crore fund designated for women entrepreneurs, which it said would promote women's economic inclusion. Other positive aspects noted by the IBFB include duty reductions on raw materials and pharmaceuticals, incentives for eco-friendly e-bikes, bringing e-commerce under taxation and regulation, and the BDT 5,040 crore allocation for public-private partnership (PPP) projects.
The IBFB presented several recommendations for the government to consider in the budget, urging the implementation of digital systems and fair tax policies to improve revenue collection. It also emphasized the need for easy access to loans and transparent, inclusive incentive packages to boost the private sector.
Highlighting the lack of structural reform, the IBFB said, “The proposed budget fails to outline reforms in tax administration, debt sustainability, or public expenditure management. There is also no guidance on addressing defaulted loans, interest rate concerns, or restoring discipline in the banking sector.”
Nevertheless, the organization praised certain provisions in the budget. “The government’s plan to increase the tax-free income threshold in FY 2026–27 offers relief for low-income groups,” said the IBFB. It also lauded the proposed BDT 525,000 tax-free income threshold for freedom fighters, calling it a “respectful move.”
