The Metropolitan Chamber of Commerce and Industry (MCCI) has called on the government to reduce the turnover tax on gross receipts from 1 per cent to 0.3 per cent, arguing that the current structure places an undue financial and administrative burden on businesses and disrupts the coherence of the overall tax framework.
In its proposals presented at a pre-budget consultation seminar for the fiscal year 2026–27 in Dhaka, jointly organised by MCCI and the Economic Reporters Forum, the chamber highlighted persistent inconsistencies between tax deducted at source (TDS), taxes levied on gross receipts, and final corporate tax liabilities. According to MCCI, these mismatches increase compliance costs, create cash flow pressures, and in some cases result in the risk of double taxation.
The chamber emphasised that rationalising tax rates across different stages of commercial activity is essential to align fiscal policy with prevailing business conditions and to improve overall tax efficiency.
Key Tax Reform Proposals
MCCI proposed a series of adjustments across different segments of taxation aimed at easing pressure on businesses, particularly exporters, importers, and domestic suppliers.
It recommended reducing TDS on export proceeds from the existing level to 0.50 per cent, citing the need to strengthen export competitiveness in an increasingly uncertain global trade environment. The chamber noted that advance tax deductions reduce liquidity and restrict exporters’ working capital, thereby affecting operational flexibility.
At the import stage, MCCI suggested lowering tax collection at source (TCS) from 5 per cent to 3 per cent, particularly on raw materials and capital machinery, to reduce production costs and encourage industrial investment.
For domestic transactions, it proposed a flexible TDS structure within a 1–3 per cent range depending on the nature and risk profile of the transaction. It also recommended fixing TDS on packing materials at 3 per cent to provide greater clarity and consistency in application.
In addition, MCCI stressed the need to address long-standing refund complications by issuing “No TDS” certificates until refundable amounts are fully adjusted, thereby improving liquidity management and reducing procedural delays.
Summary of Proposed Changes
| Tax Component |
Current Rate |
Proposed Rate |
MCCI Rationale |
| Turnover tax on gross receipts |
1% |
0.3% |
Reduce tax burden and distortion |
| Export TDS |
Higher prevailing rate |
0.50% |
Improve competitiveness and liquidity |
| Import TCS |
5% |
3% |
Lower cost of raw materials and machinery |
| Domestic TDS (supply) |
Fixed rates |
1–3% (flexible) |
Reflect transaction type and risk |
| Packing materials TDS |
Variable |
3% fixed |
Ensure clarity and consistency |
| Refund mechanism |
Delayed adjustment |
“No TDS” certificate |
Improve cash flow |
MCCI President Kamran T Rahman noted that businesses are currently operating under significant pressure due to high inflation, elevated interest rates, and foreign exchange constraints. He observed that small and medium enterprises have been particularly affected by these conditions.
He further urged the government to adopt a more supportive fiscal framework that reduces the cost of doing business, stimulates investment, and restores confidence in the private sector. According to him, coordinated policy measures are essential to stabilise the economy and sustain long-term growth momentum.
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