DHAKA, June 03, 2025 (BSS) - The Metropolitan Chamber of Commerce and Industry (MCCI) today hoped that the proposed budget will play a significant role in providing financial stability and inclusive development.

The chamber expressed its willingness to work closely with the government to assist in budget implementation, particularly in ensuring transparency in tax administration, improving the business environment, and advancing economic reforms. 

MCCI mentioned that they will continue to provide its advice and support for the country's economic and social development.

In a press statement of its reaction on proposed national budget for the fiscal year 2025-26, MCCI congratulated Finance Adviser Dr Salehuddin Ahmed for presenting the 54th national budget of the country for the fiscal year 2025-2026. 

MCCI believed that preparing the budget was a bold undertaking for the Finance Adviser in the face of several challenges, including shrinking export markets due to rising inflation, sluggish investment trends, high bank lending rates, ongoing global conflicts, and the upcoming transition to developing country status in 2026.

The chamber observed that implementing the budget will be highly challenging. 

However, the chamber believed that effective budget implementation will require not just improved budget management but also significant reforms in tax policy, automation of the tax system, reduction of systemic revenue losses, and strengthening the capacity of the tax administration to provide proper services to the public. 

MCCI has consistently advocated for meaningful structural reforms in tax administration to enable efficient revenue collection, they mentioned. 

MCCI strongly urged a resolution to increase the tax burden on regular taxpayers by raising tax rates. Broadening the tax net is crucial to resolving this matter effectively.

MCCI stressed the need for a proper balance between these two options. Additionally, there should be a provision for restructuring the banking sector to ensure strategic financial management, they added.

The chamber also observed that expanding the tax net and increasing the tax-to-GDP ratio remain significant challenges for the government. 

"It is worth noting that for the projected GDP of Taka 6,244,578 crore in the fiscal year 2025-2026, the revenue collection target is only Taka 564,000 crore- equivalent to just 9% of GDP," they mentioned. 

MCCI believed that higher revenue collection heavily depends on the digitalization of the tax system, the simplification of tax procedures, and the implementation of people-friendly tax policies.

MCCI emphasized that the advance tax rate on the import of industrial raw materials should be reduced to zero.

MCCI appreciated the proposal to extend the VAT adjustment period from four (4) tax periods to six (6) tax periods through advance tax (AT) adjustment, tax deducted at source, invoices, or bills of entry.

MCCI believed that ensuring an adequate supply of e-invoicing systems and Electronic Fiscal Devices (EFDs) will speed up the overall VAT collection process. 

Considering the current reality, the chamber stressed the importance of expanding the VAT net by bringing all eligible businesses under its coverage.

The chamber also believed that effective automation, along with integration between the Integrated VAT Administration System (IVAS) and Application Programming Interfaces (APIs), will enhance the efficiency of the VAT system. 

This will help ensure increased VAT collection and bring more businesses under the VAT net, it added. 

Additionally, MCCI strongly recommended eliminating the input-output coefficient, easing restrictions on the input tax credit, and reducing exemptions from VAT at source. 

MCCI also believed that a cashless society (paperless transactions) and a cashless tax system will help eliminate harassment of taxpayers.

Budget implementation should be carried out through periodic monitoring and evaluation, the chamber observed.

Given the current global economic instability, the chamber mentioned that evaluation of budget implementation is essential. 

MCCI believed that an interim assessment every three (3) months is necessary.

"If required, the budget can be restructured and revised accordingly to address emerging issues affecting society and the economy," it added.