EuroCham warns of 'unfair playing field' in Bangladesh trade
NBR signals end to reduced tax rates for RMG exporters
European businesses in Bangladesh have expressed concern over the trade preferences granted to certain trading partners, saying these create an unfair playing field for them.
The issue was raised yesterday at a pre-budget discussion held in Dhaka's Agargaon by the European Union Chamber of Commerce in Bangladesh (EuroCham).
"We are looking with concern at how Bangladesh is providing trade preferences to other partners that will create an unfair playing field for European businesses," Nuria Lopez, chairperson of EuroCham, said in her written speech, during a meeting with the National Board of Revenue at its headquarters.
However, she did not specify which countries or what types of trade preferences were involved.
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After the United States imposed reciprocal tariffs last year, Bangladesh extended certain preferences to increase imports from the US to reduce the trade gap.
In response to a call to allow women entrepreneurs to avail themselves of similar corporate tax opportunity at reduced rates of 10 to 12% enjoyed by ready-made garment exporters, the chairman of the National Board of Revenue, Abdur Rahman Khan, said, "That rate may not continue."
At present, RMG exporters in Bangladesh pay corporate tax on total income at 10% for green factories and 12% for other units. In contrast, the standard corporate tax rate for the sector ranges between 25% and 27%.
For years, entrepreneurs in the garment sector have benefited from these concessional rates. However, in the previous national budget, the NBR moved to align the reduced tax rate for the textile sector with the standard rate.
During the pre-budget meeting, foreign investors urged Bangladesh to ensure predictable tax policies and improve the overall investment climate to attract and retain both local and foreign investment.
Nuria Lopez also emphasised accountability, stating, "We are calling for a mandatory timeframe for NBR responses. Whether for a licence or a request for approval, NBR must have a fixed, mandatory deadline to provide an answer. Businesses can't operate effectively under uncertainty; predictability is essential."
"Our message is clear: tax policy must support investment, not discourage it. The increasing tax burden on multinational companies is a concern," she added.
Nuria also stressed the need for an FTA with the European Union to boost trade with the bloc.
She further stressed the need to simplify VAT and customs procedures and remove procedural bottlenecks that act as trade barriers.
At the same meeting, the American Chamber of Commerce in Bangladesh (AmCham) also highlighted the importance of long-term tax certainty for investors.
The chamber called for a gradual reduction in corporate tax rates and the introduction of structured tax stability frameworks for large-scale investments, stating that consistent policies are key to boosting investor confidence and enabling long-term planning.
It also recommended simplifying tax structures, reducing overlapping tax burdens, rationalising minimum tax rates, and addressing double taxation issues to ensure fair tax treatment across sectors.
"These recommendations aim to create a more balanced, transparent and competitive tax system while supporting sustainable revenue generation," said AmCham President Syed Ershad Ahmed.
To improve the investment climate, AmCham suggested aligning domestic regulations with international agreements. It also called for clearer guidelines on tax holidays, including their benefits, eligibility criteria, and scope, to reduce ambiguity for investors.
The chamber further emphasised modernising tax administration and strengthening institutional governance, including simplifying compliance procedures, improving VAT refund mechanisms, and advancing reforms such as the planned separation of the NBR.
Khorshed Alam, president of the Bangladesh-China Chamber of Commerce and Industry, called for lower tax rates for foreign nationals investing in property in Bangladesh.
He noted that many Chinese nationals working in Bangladesh are reluctant to invest locally, preferring countries like Singapore and Malaysia due to lower tax rates.
"I asked them why they are not willing to invest in property here. They said that in Singapore the tax rate is around 7%, whereas in Bangladesh it exceeds 35%, making it less viable for investment," he added.
