The Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday expressed concern that the large bank borrowing targeted to meet the budget deficit for FY2026-27 could limit loan availability for the private sector and hinder private investment.
"The deficit financing has been set at Tk 2.43 lakh crore, out of which Tk 1.12 lakh crore will be sourced from the banking system. This may restrict the availability of credit for the private sector and obstruct private investment," said the ICAB President NKA Min FCA.
ICAB welcomes FY27 budget as business-friendly, flags crowding-out risk
The premier accounting body shared its formal reflections on the proposed national budget during a press conference held at the Council Hall of ICAB Bhaban in the capital on Saturday.
Welcoming the proposed Tk 9.38 lakh crore national budget placed by Finance Minister Amir Khosru Mahmud Chowdhury under the leadership of Prime Minister Taeque Rahman, ICAB noted that the budget reflects the government’s commitment to economic stability, revenue growth, job creation, and private sector development.
ICAB praised the government's decision to undertake the challenge of implementing a Tk 3.16 lakh crore Annual Development Programme (ADP) despite global economic uncertainties, geopolitical tensions, and inflationary pressures.
The institute highly appreciated the reflection of several ICAB recommendations in the proposed Finance Bill, noting that these changes will enhance business ease and improve the investment climate.
Key positive direct and indirect tax measures highlighted by ICAB include:
Abolition of Minimum Tax: The removal of the "minimum tax" provision to lower the effective tax rate for entities and the introduction of new provisions for advance income tax adjustment.
Five-Year Tax Certainty: Setting the tax rates for the next five years, which will facilitate long-term investment planning.
Startup Incentives: Exempting registered startups from the purviews of Sections 55 and 56 during their growth years alongside a 0% turnover tax.
Content Creators Exempted: Inclusion of content creators and freelancers in the VAT exemption list to boost the digital economy.
Reduced Appeal Deposits: The reduction of financial deposit requirements before filing appeals in Tribunals and High Courts across Income Tax, VAT, and Customs laws.
Despite the positive steps, ICAB urged the government to review certain provisions that could trigger inflation or create practical hurdles for small businesses.
The accounting body warned that the mandatory collection of 0.2% advance tax from retailers by manufacturers, importers, and suppliers could drive up inflation. It also pointed out that making the Business Identification Number (BIN) mandatory for trade license renewal and opening MFS merchant accounts might create operational difficulties for emerging micro-enterprises.
Furthermore, ICAB termed the requirement of depositing 2% of duty, tax, and penalty for filing an appeal before the High Court Division as "not business-friendly" and urged a revision.
Emphasizing transparency, ICAB stressed the need for a fully integrated digital tax system to minimize direct human interaction, thereby reducing harassment.
The institute also called for strict monitoring and auditing of public expenditures, including the ADP and revenue spending, to maintain financial discipline and ensure public accountability.
The press conference was moderated by MBM Lutful Hadi FCA, ICAB Council Member and Chairman of the Taxation and Corporate Laws Committee, while ICAB Vice President Md. Moniruzzaman FCA delivered the closing remarks.
Earlier, Mostafa Kamal FCA, Acting Chief Executive Officer of ICAB, extended the welcome address, and Sarkar Nahidul Islam FCA, Director of Rahman Rahman Haq Chartered Accountants, presented the key highlights of the proposed national budget.
The briefing was also attended by ICAB Vice President Md. Johurul Islam FCA, Council Members Mohammad Mahbubur Rahman FCA, Mohammed Redwanur Rahman FCA, Md. Yasin Miah FCA, Ziaur Rahman Zia FCA, Muhammad Emran Hossain FCA, and Mohammad Moin Uddin Riad FCA. Former ICAB President Md. Shahadat Hossain FCA and ICAB Fellow Member Snehasish Barua FCA, among others, were also present.