Budget to simplify biz licences, approvals, tax services

The government is set to unveil a broad package of deregulation measures in the upcoming national budget aimed at reducing the cost of doing business by simplifying licensing procedures, modernising tax administration and accelerating approvals to stimulate investment and job creation.

According to finance ministry officials, the reforms will introduce a system under which businesses seeking new licences or expansion approvals will receive provisional permission within seven days of application submission.

If relevant authorities fail to issue final approval within the stipulated timeframe, the licence will be deemed to have been granted automatically, marking a major shift in regulatory practice.

The validity period of most business licences and permits is also expected to be extended to five years under the proposed changes in the fiscal 2026-27 budget, reducing the need for annual renewals.

Finance Minister Amir Khosru Mahmud Choudhury's budget speech will feature a dedicated chapter titled "Ease of Doing Business through Deregulation."

Officials said the measures are designed to reduce delays, eliminate duplication of documentation and streamline the overall approval process for both domestic and foreign investors.

The budget is expected to include a series of reforms to modernise tax administration, including full automation of the National Board of Revenue and its field offices.

Plans include the introduction of online corporate tax return filing, year-round submission facilities and incentives for early filing, while late filers may face higher tax rates.

Tax refunds will be credited directly to taxpayers' bank accounts, and broader automation is expected to reduce administrative delays and harassment in the tax system.

The reforms will also include the introduction of a mobile application to support electronic return filing and taxpayer services.

Move aligns with BNP's electoral manifesto

The deregulation initiative aligns with the ruling BNP administration's electoral manifesto commitments to lower transaction costs and attract foreign direct investment. To ensure accountability, the budget will announce the formation of a joint government-private sector task force tasked with monitoring regulatory reform.

Addressing a recent seminar organised by the Economic Reporters Forum, the finance minister sharply criticised bureaucratic bottlenecks, stating that public officials routinely create unnecessary hurdles for enterprises. 

He clarified that while companies must apply for all required permits, they will now do so through a single point of entry, with every state agency mandated to respond within a strict deadline. The upcoming budget will formalise these timelines while curbing the discretionary powers of National Board of Revenue officials, said Khosru.

The finance minister said, "If a business requires 15 to 20 permissions and licences, business owners will obtain all of them. However, they will apply through a single point, and all relevant authorities must issue every licence and permission within a stipulated timeframe."

The government will establish a "Digital Application Platform" to ensure that investors can apply for and receive all types of licences, certificates, approvals, and renewals online, eliminating the need for person-to-person contact. 

Furthermore, unnecessary steps in licensing will be scrapped to simplify the process, and the duplication of documentation will be eradicated.

The upcoming budget will announce the launch of "Banglabiz" to ensure an integrated One-Stop Service system, operationalising an automated investment approval system for investors.

The NBR will fully operationalise the National Single Window, through which tax residency certificates will be issued automatically. This will simplify the process of availing benefits under international trade and tax treaties.

Reducing harassment in tax payment

As part of deregulation efforts to curb the administrative harassment faced by businesses when paying taxes, the NBR is set to introduce online corporate tax return filing. Alongside this, the NBR will launch a mobile application to facilitate e-return submissions.

Businesses will have the opportunity to file their returns throughout the year – those who file early will be eligible for incentives. Conversely, those who delay their submissions will face additional tax liabilities.

The requirement for publicly listed banks, insurance, leasing, and finance companies to mandatorily distribute 30% of their post-tax profits, as well as the conditions regarding cash dividend payments, may be withdrawn. This will allow these institutions to retain profits to strengthen their capital base, expand operations, and ensure financial stability.

In the upcoming budget, the NBR may allow an initial capital allowance of up to four times the taxable business income during spot assessments. This is expected to incentivise investment and increase the formalisation of businesses.

To reduce prolonged delays in settling tax-related disputes, announcements may be made to streamline appeals, tribunals, the High Court, and Alternative Dispute Resolution (ADR) processes, ensuring they are resolved within specific timeframes. Furthermore, the scope of ADR will be expanded, allowing access without the prior filing of an appeal.

In the budget, an opportunity will be provided to submit late returns voluntarily after the tax year upon payment of a penalty of Tk5,000 or 10% of the tax payable. The NBR will replace the existing penalty mechanism for the non-deduction of withholding tax with a system requiring the payment of the withheld amount plus an additional 50%.

NBR officials said the government will allow the accrual-based deduction of interest expenses, alongside significant increases in the allowable limits for perquisites, entertainment expenses, free samples, and promotional expenditures.

Furthermore, the government will recognise the supply of goods to export-oriented industries through local L/Cs in foreign currency as deemed exports.

The NBR may integrate the ASYCUDA World system with the e-return platform in the budget. This will streamline data sharing between customs and tax administrations, helping to curb tax evasion.

Furthermore, the audit threshold for non-corporate taxpayers is likely to be raised from a turnover of Tk5 crore to Tk10 crore in the new fiscal year. This measure will ease the audit burden on small and medium enterprises (SMEs) and reduce their operational costs.

Welcoming the proposals, Azam J Chowdhury, chairman of East Coast Group and president of the Bangladesh Ocean Going Shipowners' Association, told TBS that online tax filing and fast-tracked judicial timelines will significantly unlock stalled state revenues and boost investor confidence. 

He added that automating tax refunds within strict timeframes would incentivise punctual tax payments, while integrating customs data with tax returns aligns the nation with international trade benchmarks, making the investment climate highly attractive to foreign entities.

Azam further said, "The integration of ASYCUDA with tax returns will bring us into parity with international standards, which foreign investors will find very encouraging. Additionally, the significant increase in allowable limits for perquisites and free samples is likely to boost exports."