The Bangladesh Chamber of Industries (BCI) has called for urgent reforms to enhance industrial competitiveness in the rapidly evolving global market, saying they would subsequently ensure sustainable growth.

The reforms were sought through proposals for the national budget for the fiscal year 2025-26, submitted to the National Board of Revenue (NBR) by BCI President Anwar-ul Alam Chowdhury Parvez yesterday.

The proposals highlighted the challenges of Bangladesh's upcoming graduation from a least developed country to a developing one, along with ongoing issues such as rising energy costs, inflation, and slow infrastructure development.

While the graduation will usher in significant economic progress, it also means the country will lose vital trade privileges, particularly the benefits of the Generalised System of Preferences for exports, said Parvez.

The BCI urged the NBR to address these challenges by implementing policies that would support industries during this transition, ensuring they remain competitive in global markets despite losing preferential access.

The ongoing energy crisis, inflation, and slow progress of the Annual Development Programme (ADP) have been negatively affecting industries of all sizes, particularly small and medium enterprises (SMEs), which are facing significant financial pressure, said Parvez.

The BCI proposed several reforms aimed at reducing operational costs and improving the tax system to provide relief for businesses struggling with these challenges.

The government must adopt a tax framework that is not only revenue-centric but also conducive to industrial growth, said Parvez.

The BCI called for the simplification of the tax system to expand the income tax and VAT net, with the goal of increasing tax compliance across all sectors.

It proposed making tax registration mandatory for both government and private sector organisations to ensure that transactions are properly tracked and reported.

To further reduce costs for businesses, the BCI suggested that government fees related to land acquisition, licensing, and port services be aligned with administrative cost models rather than arbitrary fees.

This would bring Bangladesh's tax practices in line with World Trade Organization (WTO) guidelines, it said.

The BCI also advocated for reforms in customs and tax laws, aiming to streamline processes at the production, import, and export stages and improve the overall efficiency of the tax system.

The BCI recommended implementing a zero VAT rate on energy supplies for industrial and export sectors to help reduce production costs.

Additionally, it proposed tax relief for SMEs, particularly in rural areas, and suggested the introduction of bonded warehouses and distribution systems to help these businesses compete in the e-commerce market.

The BCI also called for special incentives for women entrepreneurs in the rural sector.

"We are optimistic that the NBR will pay heed to our proposals, which are designed to safeguard the interests of our industries and ensure continued progress," said Parvez.