Graduation from LDC is a matter of headache for us: Finance secretary

Finance Division Secretary Khairuzzaman Mozumder has expressed concerns regarding Bangladesh's graduation from the list of the least-developed countries (LDC).

"Bangladesh's graduation from LDC is a matter of headache for us," Khairuzzaman said during his speech at the National Board of Revenue (NBR) event honouring 141 nationwide top taxpayers at the Bangabandhu International Conference Center yesterday.

Khairuzzaman emphasised that after graduating from LDC status in 2026, Bangladesh would no longer benefit from duty-free exports under preferential tariffs.

He mentioned ongoing efforts to extend this period but acknowledged the impending loss of competitiveness, leading to a reduction in exports. The finance secretary also feared the necessity to cut import tariffs, potentially hampering import tax revenue.

The scheduled graduation from LDC status in 2026 poses a significant challenge for Bangladesh, particularly in losing duty-free export benefits to major destinations, including the European Union.

Although efforts are underway to maintain these benefits through bilateral and multilateral free trade agreements (FTAs), high import tariffs in Bangladesh present a major obstacle to successful negotiations.

Economists have stressed the importance of reducing tariffs in advance to prepare for the potential sudden drop in tariffs due to FTAs. However, little progress has been observed in this regard, posing a risk to the revenue sector.

Khairuzzaman highlighted the need for revenue sector reforms to counter these challenges. He proposed that with necessary reforms, 10 million direct taxpayers could be achieved by 2026. The NBR's medium-term reform strategy is expected to be finalised by June of this year.

During the event, NBR Chairman Abu Hena Md Rahmatul Muneem urged taxpayers to communicate with tax office officers for issue resolution, emphasising the availability of public hearings in every tax commissionerate every week.

The event recognised and honoured 141 top and long-time taxpayers, including Kaus Mia, a tobacco businessman paying taxes since 1956. Despite health issues, Mia attended the event and expressed hope for continued recognition in the coming years. Plans were mentioned to take him abroad for medical treatment.

Tax cardholders, including the honoured individuals, will receive various government benefits and privileges, such as access to the CIP lounge at airports, residential hotel bookings, priority in obtaining government vehicle tickets, and invitations to various state events.

In total, 525 individual and corporate taxpayers were honoured and given tax cards across the country this year.