Dhaka Chamber of Commerce and Industry (DCCI) President Taskin Ahmed has termed the decision to hike VAT and gas price on industries as suicidal.
He said it will have negative impact on trade and investment and on the overall business activities as local and foreign investment may face backlash.
He made the comments at a meeting with the media on the country's contemporary economic situation and outlining the DCCI's year-long work plan for 2025 organized at its Motijheel office on Saturday.
The DCCI President said the proposal to increase per unit gas price for industries and captives users by more than double together VAT on about 43 products will create huge negative impact.
The NBR proposal to increase income tax on motorcycles industries, refrigerators, air-conditioning (AC) and compressors from 10 percent to 20 percent will be quite damaging.
It will increase production costs to increase products prices. Inflation will thus increase and employment will shrink. The government should instead provide long-term tax benefits to trade, investment to expand business, he said.
Taskeen Ahmed said the country's private sector is already facing multiple challenges due to geopolitical instability, and its impact on local economy will be many folds.
Dwindling foreign exchange reserves, rising import cost, high energy cost, high inflation, high interest rates, high tariff rate, increasing VAT rates and above all, deteriorating law and order situation will decelerate growth, he said.
The DCCI on the other hand is focusing more on reducing bank interest rates, controlling inflation and keeping the foreign exchange rate stable.
Replying a question, he laid emphasis on accelerating low cost financing to the CMSME sector. He said the CMSME sector is the largest sector in Bangladesh economy which creates most employment than any other sector.
On a question, he said he expected that the interim government will complete private sector reforms and the economy as per its targets.
He further said completing hundred economic zones by 2030 with all facilities is not an easy task and rather believes the government should focuses on completing five economic zones at first will all facilities.
He said entrepreneurs should be encouraged to invest in economic zones obtaining a long-term tax support facilities. He pointed out that the sudden decision to increase tax or duties in mid-way will have a negative impact on investors.
On graduation from LDC, he said Bangladesh was moving on the right direction, However Covid pandemic, Russia-Ukraine war, unrest in the Middle East and aftermath of local political unrest coupled with instability in the financial market are causing unexpected setback.
DCCI Senior Vice President Razeev H Chowdhury, Vice President Md. Salem Sulaiman and members of the board of directors were also present on the occasion.
