FICCI flags issues in finance ordinance
The Foreign Investors' Chamber of Commerce and Industry (FICCI) has raised significant concerns over several provisions in the proposed Finance Ordinance 2025, warning that certain measures may hinder business growth and unfairly burden compliant taxpayers.
In a press release, the FICCI criticised a proposed 7.5 percent additional corporate tax on publicly listed companies with less than 10 percent of their shares floated through an initial public offering (IPO), calling the move "discriminatory".
For all latest news, follow The Daily Star's Google News channel. The chamber also expressed dismay at the withdrawal of a tax reduction for companies conducting transactions via formal banking channels.
"This decision undermines efforts to promote a cashless economy and weakens Bangladesh's competitiveness against countries such as Vietnam and Indonesia," it said.
On personal taxation, the FICCI welcomed the rise in the tax-exempt income threshold but noted that middle-income earners may face increased pressure under the revised tax structure.
Addressing trade-related taxation, the chamber observed that the 7.5 percent advance tax on commercial imports—when local value addition is below 50 percent—might reduce refund claims but could escalate costs in sectors with low value addition.
Despite these criticisms, the FICCI acknowledged several positive elements in the ordinance.
These include extending the VAT rebate period from four months to six months and allowing digital recordkeeping through enterprise resource planning (ERP) systems without the need for hard copies.
The chamber also praised reductions in source tax for construction and essential goods, exemption of dividends from joint ventures from double taxation, and the prioritisation of double taxation avoidance agreements over domestic law—moves aligned with international best practices.
However, it warned that raising value added tax (VAT) on online sales from 5 percent to 15 percent may jeopardise the digital business sector's viability and growth potential.
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