Economists and business leaders have expressed concern that the government may resort to aggressive tax and customs collection measures to achieve its ambitious revenue target in the proposed national budget for the next fiscal year, warning that the budget lacks a clear roadmap for revenue mobilization.
The concerns were raised at a budget dialogue organized by the American Chamber of Commerce in Bangladesh (AmCham) on Monday at Hotel Sheraton in Banani. The event was chaired by the chamber’s newly elected president, Syed Mohammad Kamal, and attended by business leaders, economists and AmCham members.
Presenting the keynote paper, M Masrur Reaz, chairman of Policy Exchange Bangladesh, said the proposed revenue target of more than Tk 6 trillion was unrealistic and could prompt authorities to adopt excessive measures to meet collection goals.”The revenue target is highly ambitious. Attempts to achieve it may lead to aggressive tax and duty collection practices,” he said.
Masrur Reaz also highlighted concerns over government spending, noting that 41 percent of the proposed budget would be consumed by salaries, pensions, subsidies and interest payments. He further observed that a significant portion of development spending had been kept as block allocations, which often lack transparency in utilization.
Financing Remains a Major Challenge: During the panel discussion, Fahmida Khatun, executive director of the Centre for Policy Dialogue, said the size of the proposed budget reflected the new government’s commitment to fulfilling its promises to citizens.She described the budget as expansionary in nature but warned that financing such a large expenditure plan would be a major challenge.”The new government has made many commitments to the people. Therefore, this is an expansionary budget. However, securing the required financing remains a significant challenge,” she said.
Business Environment Needs Further Improvement: Another panelist, Ahsan Khan Chowdhury, chairman of PRAN-RFL Group, said the business community had expected stronger measures to improve the ease of doing business. “More attention is needed to develop a skilled workforce. Agricultural allocations have not increased substantially. However, the current government has listened to our concerns more than any previous administration,” he remarked.
Banking Sector Weakness Raises Concerns: Former chief executive officer of Standard Chartered Bangladesh, Naser Ezaz Bijoy, said the budget framework did not clearly explain how the revenue target would be achieved.He also warned about the fragile state of the banking sector, noting that many banks remain weak and are facing liquidity shortages.
“A large segment of the banking industry is under stress. If government borrowing from banks increases, private-sector access to credit could be squeezed further,” he said.The panel discussion was moderated by AmCham Vice-President and chief executive officer of MetLife Bangladesh, Ala Uddin Ahmed.
Eight AmCham Proposals Accepted: In his closing remarks, Reza Ur Rahman Mahmud, treasurer of AmCham and managing director of Philip Morris International Bangladesh, said the government had accepted eight of the chamber’s 18 recommendations in the proposed budget.
The discussion reflected growing concerns among economists and business leaders over revenue mobilization, fiscal sustainability and private-sector financing, as Bangladesh prepares to implement an ambitious budget amid ongoing economic and banking-sector challenges.
