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DHAKA, Sep 2, 2025 (BSS) - Experts at a seminar today said that an increase in direct taxes instead of indirect taxes through expansion of the tax net, higher domestic consumption, a change in the industry's mindset towards tax compliance, and professional handling of tax matters are the keys to attracting foreign direct investment. 

They also said these will contribute to sustainable economic development and help increase revenue collection, while initiatives should also be taken to enhance transparency in the revenue collection and rationalize tax exemptions. 

The government has taken several encouraging steps, including the adoption of a contractionary monetary policy to curb inflation, alignment with international standards, reclassification of non-performing loans, and the formation of a task force for banking sector reforms. 

Experts forwarded these opinions at a seminar on macroeconomic outlook and impact of Finance Ordinance 2025, organized by MABS & J Partners yesterday at a city hotel.

Experts shared these views at a seminar on the macroeconomic outlook and the impact of the Finance Ordinance 2025, organized by MABS & J Partners, a CA firm in Bangladesh affiliated with Nexia, in the capital yesterday.

Kamran T. Rahman, President of the Metropolitan Chamber of Commerce and Industry (MCCI), attended the event as the chief guest. The keynote paper on macroeconomic aspects and the Finance Ordinance 2025 was presented by Md. Shahadat Hossain, Senior Partner of MABS & J Partners, said a press release today.

MCCI President Kamran T. Rahman said that the Finance Ordinance 2025 is an integral part of the national budget.

"It comes at a critical juncture for the Bangladesh economy. We are facing persistent inflationary pressures in the financial sector, sluggish private investment, and challenges related to the forthcoming graduation from LDC status. In such circumstances, the government has sought to strike a delicate balance between maintaining fiscal prudence and pursuing economic growth," he added.

Talking about the current economic scenario, the MCCI President suggested increasing the tax-to-GDP ratio by expanding the tax net. He also noted that inflation in non-food items, partly due to currency depreciation, has risen sharply by 25-40 percent in recent times, causing significant hardship for the people.

The seminar brought together professionals, renowned economists, distinguished business leaders, and policymakers on a single platform to share insights on fiscal policy framing and its impact on the country's economic outlook. 

Keynote presenter Md. Shahadat Hossain said that the country's foreign exchange reserves stand at $25.9 billion, while gross reserves exceed $30 billion as of mid-2025. These reserves reflect increases from strong remittance inflows and slower import growth.

However, in 2024, Bangladesh's net Foreign Direct Investment (FDI) plunged to a five-year low, raising concerns over investors' confidence amid economic headwinds and policy uncertainties. He added that private investment's share in GDP declined in FY 2024-25 to 22.48%, down from 23.96% in the previous year. This decline was mainly driven by falling business confidence due to the dollar crisis, high gas prices, and rising lending rates.

Describing the economic outlook, Shahadat said the banking sector is facing a severe crisis, driven by a record capital shortfall, a high level of non-performing loans (NPLs), weak governance, regulatory inefficiencies, a declining capital base, and a combined capital shortfall, especially in the top 20 banks.

The interim government has taken major initiatives to improve policy credibility, streamline customs and VAT, strengthen foreign exchange reserves, and provide investment incentives.

The keynote presenter also highlighted the potential benefits of key reforms and changes in the Income Tax Act, 2023 through the Finance Ordinance, 2025, noting their impact on taxpayers and the broader macroeconomy, including changes in tax-free income limits and tax slab rates for individuals.

He added that the tax-free income limit has been increased from Taka 3.50 lakh to Taka 3.75 lakh, and the minimum tax is now determined by taxpayer status rather than location.

The individual filing deadline may be extended by 90 days, while businesses will be given additional time to ensure accurate compliance.