Direct tax expansion, compliance seen as keys to luring FDI

Expanding the direct tax base, boosting domestic consumption and ensuring tax compliance in a professional manner are crucial to attracting foreign direct investment (FDI) and strengthening revenue collection, business leaders said.

They spoke at a seminar on the macroeconomic outlook and the impact of the Finance Ordinance 2025, organised by MABS & J Partners at a hotel in Dhaka on Monday, according to a press release.

Speakers stressed greater transparency in revenue collection and rationalising tax exemptions.

They welcomed steps such as the contractionary monetary policy to tame inflation, new rules on non-performing loans, moves to align with international standards and the formation of a task force for banking sector reforms.

The event brought together economists, business leaders, professionals and policymakers to share views on fiscal policy and its impact on the economy.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry (MCCI), termed the Finance Ordinance 2025 an integral part of the national budget, saying it comes at a critical juncture for Bangladesh's economy.

"We are facing persistent inflationary pressure, sluggish private investment and the challenge of LDC graduation. In this context, the government has tried to strike a balance between fiscal prudence and economic growth," he said.

Md Shahadat Hossain, senior partner at MABS & J Partners, an affiliated CA firm of Nexia in Bangladesh, presented the keynote paper.

He noted that foreign exchange reserves stood at $25.9 billion, with gross reserves projected to exceed $30 billion by mid-2025, supported by strong remittance inflows and slower import growth.