The American Chamber of Commerce in Bangladesh (AmCham) has welcomed key reform signals in the proposed FY2025–26 budget but expressed concern over what it calls overly ambitious growth targets, insufficient investment incentives, and limited structural change at a time of economic uncertainty.

With the interim government projecting a 5.5% GDP growth and 6.5% inflation target for FY26, AmCham warned that such projections, though positive in tone, may not hold up under current macroeconomic pressure. “While strict policies have contained inflation, they are still eroding savings and investment,” the chamber said in a statement, adding that the new budget size—equivalent to 12.65% of GDP—reflects cautious fiscal positioning rather than bold stimulus.

One of the sharpest criticisms came over the government's continued reliance on indirect taxation and the reintroduction of advance tax at a higher 7.5% rate. AmCham cautioned that this “will be punishing for both businesses and consumers, especially when VAT evaders remain unaddressed.”

The chamber also rejected the controversial black money whitening proposal, saying it “undermines transparency and rewards corruption.” It emphasized the need for tighter fiscal discipline, pointing out that 57% of the budget is earmarked for salaries, subsidies, and debt servicing, with interest payments alone accounting for 22%.

On the reform front, AmCham praised the move to separate the National Board of Revenue (NBR) into two wings—policy and collection—but urged full automation of customs, simplification of HS codes, and the elimination of manual procedures. While the digitalization of trade licenses and tax platforms was welcomed, the chamber stressed that execution and follow-through would be critical.

Sectorally, AmCham raised concerns over the reduced allocation to primary and mass education by nearly Tk 5,000 crore, even as the health sector saw a modest increase. The lack of capital market development and the limited tax relief for corporates were also flagged as missed opportunities to drive private sector growth.

On future readiness, AmCham urged investments in port efficiency, climate resilience, and employment diversification. “Investing in this new Bangladesh is not optional—it’s imperative,” it said, underscoring that budget execution, not just allocation, will define success.