Budget must be backed by structural reforms to spur investment: Experts

Business leaders and economists have urged urgent structural reforms, better governance and a more investment-friendly environment, stressing that effective implementation of the proposed FY2026-27 budget is essential to restore investor confidence and create jobs.

The call came at a discussion titled "National Budget FY2026-27: Building Confidence & Competitiveness for Investment-Led Growth", organised by the American Chamber of Commerce in Bangladesh (AmCham) at Sheraton Dhaka today (15 June).

In his keynote address, M Masrur Reaz said Bangladesh should move away from blanket tax incentives and subsidies and adopt performance-based incentives linked to measurable outcomes.

He also suggested reallocating some residential gas supply to industry, speeding up the shift toward a cashless economy, and reforming tax administration to improve voluntary compliance.

"The fear of reopening old tax files discourages many willing taxpayers from becoming fully compliant," he said, suggesting that the government introduce a clear cut-off period to build confidence among businesses.

Speaking at the event, Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said the proposed budget includes several positive measures for vulnerable groups, such as the expansion of the Family Card programme and an increase in the tax-free income threshold.

She added that strong governance and proper targeting are essential for these initiatives to work effectively, and called for higher public investment in health and education, noting that out-of-pocket healthcare spending in Bangladesh remains among the highest in the region.

Pran-RFL Group Chairman and CEO Ahsan Khan Chowdhury said Bangladesh must become one of the easiest places to do business to compete with countries like Vietnam and Cambodia in attracting global manufacturing investment.

He also stressed the need for a more skilled workforce to boost productivity and overseas earnings. Naser Ezaz Bijoy highlighted fiscal discipline and stronger institutional capacity within the National Board of Revenue (NBR).

He said structural reforms should be started immediately to sustain long-term growth and improve Bangladesh's competitiveness.

The panel discussion also featured Syed Mohammad Kamal, president of AmCham Bangladesh, and was moderated by AmCham Vice-President Ala Uddin Ahmad.