Non-performing loans (NPLs) at Islami Bank Bangladesh crossed Tk 1,00,000 crore by September after years of loan scams and lending irregularities tied to S Alam Group left the once very profitable commercial lender under severe strain.

At the end of September, total loans disbursed by the bank stood at Tk 1,81,860 crore. Of this, Tk 1,06,000 crore had turned bad, according to Bangladesh Bank (BB).

BB data show that more than half of the bank's portfolio had slipped into non-performing loans.

Bad loans rose by Tk 88,248 crore in just a year. At the end of September last year, the bank's defaults stood at Tk 17,752 crore, which accounted for 11 percent of its loans.

The commercial lender also faces a provision shortfall of Tk 85,886 crore. Banks set aside provisions as a buffer against losses, and such a large shortfall points to the scale of the damage.

Islami Bank officials said S Alam Group took out loans under both official titles and proxy names during the previous regime, when the conglomerate used to dominate the board. Many of these loans later fell into default.

They said misdeeds by one business group have pushed the bank to its current state.

After the fall of the Awami League government in a mass uprising in August last year, the bank was freed from the control of the S Alam Group. The central bank dissolved the bank board dominated by individuals linked to Chattogram-based S Alam Group.

The political changeover also exposed long-buried toxic assets that had piled up over the years. Since then, the shariah-based bank's balance sheet has been deteriorating.

Until June 2024, bad loans at the bank were only Tk 7,724 crore, or 4.42 percent of its loans. But within a month of the government's fall, defaults jumped to Tk 17,752 crore, or 11 percent.

NPLs at the bank rose to Tk 32,817 crore, or 21 percent, by the end of last year and reached Tk 47,618 crore, or 27.38 percent, by the end of March this year.

S ALAM ALONE TOOK OUT TK 70,000CR

S Alam Group maintained its hold over Islami Bank for around seven years. The bank's financial performance had weakened soon after the group began influencing decisions following an ownership takeover in 2017.

Between 2017 and August 2024, the group alone took out around Tk 70,000 crore through its own businesses and a series of shadow firms.

Loans were taken in the names of Mohammed Saiful Alam, chairman of S Alam Group, his family members, and several associates, according to central bank officials.

About Tk 66,507 crore of this amount had defaulted by the end of the September quarter.

Saiful Alam and several senior officials of the group are now on the run. The Daily Star could not reach them for comment.

Nabil Group, a close ally of S Alam Group, borrowed about Tk 13,000 crore under its own name and through anonymous entities. A portion of that amount has been rescheduled recently under a special policy, according to Islami Bank officials.

Contacted, Md Aminul Islam, managing director of Nabil Group, said, "The loans taken in the name of Nabil Group are regular, but I know nothing about the loans that were taken anonymously. I have never defaulted on any loan."

Other large borrowers of Islami Bank include Nassa Group, Noman Group, Deshbandhu Group, Jamuna Tyre, GMS Group, Murad Enterprise, AJ Trade International, Delta Group, Bashundhara Multifood Group and Mahmud Denims Ltd.

FUNDS STUCK ACROSS TROUBLED LENDERS

Islami Bank lent about Tk 10,000 crore to five banks that are now being merged. The lender has yet to recover the money.

A senior Islami Bank official said the central bank assured them that they would receive shares in the new merged bank instead of cash repayment.

Janata Bank also owes Tk 1,000 crore and has missed repayment, the official added.

Before the political changeover, Islami Bank had faced a severe liquidity crisis and even ran a deficit in its settlement account with the central bank.

Officials said the cash position has since stabilised and depositors are now

Source: Annual report

able to withdraw funds without difficulty, although the mountain of bad loans remains a cause for concern.

Contacted, Omar Faruk Khan, managing director and CEO of Islami Bank Bangladesh, said the bank's liquidity is now "very strong". He said the bank is stepping up loan recovery efforts through legal action and other means.

The lender has filed 488 cases against defaulters. These include 34 cases at the Artha Rin Adalat involving Tk 66,507 crore, 377 criminal cases, 1,881 involving Tk 19,996 crore, and 10 related to stock disposal worth Tk 28,064 crore.

Khan said they are prioritising cash recovery while allowing genuine businesses to reschedule their loans. "Our target is to bring down non-performing loans from 50 percent to 35 percent," he said.

He added that recovery has slowed as business activity remains sluggish ahead of national elections due next February.

"Besides, we are signing agreements with international legal firms to recover foreign assets. Our main target now is recovery," he told The Daily Star.

In 2023, Islami Bank recorded a net profit of Tk 635 crore, the highest in four years. Next year, net profit fell sharply to Tk 109 crore. During the January-September period this year, profit of the bank stood at Tk 99 crore, down from Tk 267 crore in the same period last year.

STAFF HIRED BY S ALAM REMOVED

Islami Bank has dismissed 4,685 employees who were allegedly recruited by S Alam Group without proper procedures. It has since hired 2,571 new staff.

An internal audit found that more than 10,000 of the bank's 21,000 employees had been appointed after the 2017 takeover.

Bank documents show that 7,224 people from Chattogram were hired between 2017 and 2024, with more than 4,500 from Patiya upazila alone -- the hometown of Saiful Alam.

M Kamal Uddin Jasim, additional managing director of the bank, said most of the 11,000 appointments made during the period were not transparent, with no official circulars issued.

He said those whose recruitment raised the most serious concerns had been dismissed.

The bank has recruited 1,400 trainee assistant officers (cash), 806 messengers cum guards and 365 security guards as part of its restructuring, he added.

Central Pharmaceuticals Limited could face regulatory sanctions, including penalties, the suspension of trading privileges, or even delisting from the stock exchange, as flagged by the company's external auditor, Ashraf Uddin and Co, in the FY25 audit report.

The auditor highlighted that the drug maker has failed to pay key statutory and regulatory charges, including the Dhaka Stock Exchange (DSE) listing fees and Central Depository Bangladesh Limited (CDBL) fees.

The audit report paints a grim picture of the company's financial health, flagging a "material uncertainty" regarding its ability to continue as a going concern.

The auditor observed that Central Pharma suffers from negative retained earnings that are almost equal to its paid-up capital.

Management has failed to secure fresh funds to generate sufficient operating cash flows to meet current obligations. Compounding these operational struggles, the company has not renewed its drug license, faces substantial tax demands from the National Board of Revenue (NBR), and is operating with a cost of goods sold that exceeds its turnover due to high fixed costs and limited production capacity, said the auditor.

Significant opacity surrounds the company's financial statements. The auditor noted that out of the reported assets, they could not verify an Advance Income Tax balance of Tk28.66 crore because the management could not provide any supporting evidence.

Furthermore, the status of three loans taken from Janata Bank remains unverified. The reported loan balances have been carried forward unchanged since June 2022. The management has neither repaid any instalments nor booked provisions for interest, and the bank did not respond to the auditor's request for balance confirmation as of November 2025.

Transparency regarding revenue was also called into question. While management provided monthly VAT returns, they failed to produce authentic sales invoices to substantiate the transactions, according to the audit note.

The auditor reported that all sales were conducted in cash without product-wise reconciliation, making it impossible to verify the accuracy and completeness of the company's revenue in accordance with International Financial Reporting Standards.

In addition to financial irregularities, the company is in violation of securities laws regarding shareholding. The sponsors and directors currently hold only 7.67% of the paid-up capital, falling far short of the mandatory 30% requirement.

Central Pharma, which was listed on the capital market in 2013, has not declared any dividends since the 2019 fiscal year. On Thursday, the company's shares closed at Tk9.50 on the Dhaka bourse.

The Dhaka Stock Exchange (DSE) witnessed a return to green territory last week, driven by investor optimism over potential political stability as the schedule for the general election was announced.

However, the recovery was characterised by a distinct anomaly: the gainers' chart was overwhelmingly dominated by fundamentally weak and Z-category companies rather than performing blue-chip stocks.

While the benchmark index rose, speculative investment behaviour pushed struggling firms with a history of losses and halted operations to the top of the price appreciation list.

Zeal Bangla Sugar Mills, a Z-category state-run firm, emerged as the week's top performer. Despite having no price-to-earnings (P/E) ratio available due to consistent losses, its stock price surged by 29.90% to close at Tk171.60. It was closely followed by Regent Textile, another Z-category stock, which rallied 29.17% to close at Tk3.10.

The trend of "junk stocks" outperforming the market was evident throughout the top ten list. Northern Jute, HR Textile, First Finance, and Usmania Glass — all belonging to the Z category — posted significant gains ranging from 19% to 24%.

Even among the better-performing categories, signs of overvaluation were present. For instance, Sonargaon Textile, a B-category company, secured the third spot with a 25.78% gain, trading at an alarming P/E ratio of 1,610.

Despite this speculative frenzy in low-cap and weak stocks, the broader market indices managed to snap a losing streak. The benchmark DSEX index rose by 77 points, or 1.58%, to settle at 4,963. The blue-chip index DS30, which comprises the best-performing companies, also gained 11 points to close at 1,903.

Market participation saw a marginal improvement, with the daily average turnover increasing by 1.49% to stand at Tk417 crore. The overall market capitalisation rose by Tk1,600 crore, reaching Tk6.86 lakh crore.

EBL Securities, in its weekly market review, noted that the capital bourse reverted to its recovery momentum following the previous week's pullback. The brokerage house explained that investors' optimism regarding evolving political developments offered some relief to the broadly subdued market sentiment. Although the week began on a weak footing, carrying over downbeat pressure, the market found a cushion as anticipation regarding the tentative declaration of the national election schedule encouraged opportunistic investors to accumulate shares.

In terms of sector-wise participation, investors were most active in the pharmaceuticals sector, which accounted for 15% of total turnover, followed by the textile and engineering sectors.

Most sectors posted positive returns, with the life insurance sector registering the highest gain of 7.4%. Conversely, the telecommunication sector was the sole loser, declining by 2.6%.

On the turnover board, Orion Infusion, Simtex Industries, and Dominage Steel were among the most traded stocks.

However, not all companies shared in the week's good fortunes. Meghna Petroleum led the losers' chart, shedding 10.28%, followed by non-bank financial institutions like FAS Finance and Prime Finance, which also faced significant selling pressure.

The Bangladesh Securities and Exchange Commission (BSEC) will create a pool of independent directors to help companies select those best suited to their business, BSEC Commissioner Farzana Lalarukh said yesterday.

She made the announcement at an event on independent directors, jointly organised by the Institute of Chartered Accountants of Bangladesh (ICAB) and the International Finance Corporation (IFC) at ICAB's Dhaka office.

"Independent directors should have expertise in industries related to the company," Lalarukh said, highlighting that some firms appoint directors with no relevant experience.

She cited examples such as a textile company hiring a female director who teaches Bangla literature and a doctor appointed to a business unrelated to her field.

"To meet the corporate code's requirement for a female director, such appointments are not justified," she added. "If necessary, a company can request an exemption, but independent directors must have expertise in the company's business."

Under the corporate governance code, every listed company must have at least one female independent director.

Although the deadline for appointing women directors has been extended to December 31, 2025, only 138 out of 360 listed companies have complied so far.

To make appointments easier, the BSEC plans to compile a pool of both male and female independent directors based on expertise. "We are already working on it with IFC," Lalarukh told the Daily Star.

Representatives from ICAB said that 21 female chartered accountants currently serve on boards, while 134 more are fully board-ready. ICAB plans to start structured training for independent directors in collaboration with IFC in 2026.

Lalarukh also stressed the importance of corporate culture, saying, "If we don't fix the internal setup and enforce good governance, independent directors will not be able to improve the situation."

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry; Syed Nasim Manzur, managing director of Apex Footwear; and Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, also spoke at the event.

Over 62% of listed companies have failed to appoint at least one woman independent director to their boards, despite the extended deadline of December 2025 set by the Bangladesh Securities and Exchange Commission (BSEC). The commission has warned that regulatory action will be taken against non-compliant firms.

Speaking at a roundtable held at the Institute of Chartered Accountants of Bangladesh (ICAB) in the capital today (11 December), BSEC Commissioner Farzana Lalarukh said that only 138 out of 360 listed companies have appointed women independent directors. Even though the deadline was extended to 31 December, most companies have yet to meet the mandatory requirement.

According to a gazette notification issued on 29 April 2024, every listed company was required to appoint at least one woman independent director by 29 April 2025. Many companies failed to meet this target, prompting the extension of the deadline to 31 December 2025.

Lalarukh highlighted several long-standing weaknesses in corporate governance, saying that many companies still do not have a properly appointed company secretary, while some even attempted to designate their CFOs for this role – an unacceptable and non-compliant practice.

"Many non-compliant companies behave like 'backbenchers.' BSEC has become a babysitter; we want to act as a true regulator," she added.

The roundtable titled "Advancing Inclusive Governance – Independent Directorship" was jointly organised by the ICAB and the International Finance Corporation (IFC).

ICAB President NKA Mobin, FCA, presided over the programme, while Jerin Mahmud Hossain, FCA, chairman of ICAB's Gender Inclusion and Leadership Committee (GILC), moderated it.

Commissioner Lalarukh emphasised that family values and social norms significantly influence women's leadership, which affects board-level representation. In many family-owned companies, independent directors have limited scope to act effectively due to weak compliance, inadequate training, and low governance standards. However, companies with stronger governance frameworks allow independent directors to perform their duties properly.

She also noted that BSEC is working to create a strong pool of women independent directors and may consider some flexibility in appointment criteria if enough qualified candidates are available. She stressed the importance of enhanced training, especially for directors of family-run listed companies who often face weak compliance frameworks.

Syed Mahbubur Rahman, MD & CEO of Mutual Trust Bank, highlighted delays in BSEC approvals for independent director appointments and called for greater transparency and regulatory flexibility.

Syed Nasim Manzur, managing director of Apex Footwear, said, "Independent directors play a crucial role in protecting minority shareholders. The presence of women enhances board diversity and effectiveness. Boards must be truly diversified and empowered to ensure compliance and drive profitability."

ICAB President NKA Mobin said, "The rule preventing independent directors from chairing audit committees after three consecutive terms should be reviewed. At least one finance or Chartered Accountant–qualified independent director should be present on each board. Mandatory director training is also essential, as many directors still lack clarity on ESG reporting and their fundamental roles as independent directors."

Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) President Kamran T Rahman emphasised the need for training, saying, "Women independent directors strengthen gender balance and diversity on boards. BSEC's required documentation is often excessive and should be simplified. Training for all directors is crucial, as many still lack a clear understanding of their responsibilities."

Institute of Chartered Secretaries of Bangladesh (ICSB) President Hossain Sadat said, "Director appointments must be based on professional competence, free from political or family influence. Independent directors should have opportunities to provide feedback and speak at AGMs to enhance transparency and accountability."

Economic Reporters Forum (ERF) President Doulot Akter Mala added, "Current eligibility criteria for independent directors are too strict and should be more flexible. Boards should also move toward a 50:50 gender ratio to ensure inclusivity."

Farzana Chowdhury, MD & CEO of Green Delta Insurance, noted that individuals involved in family businesses often have strong leadership abilities. While their formal education may be limited, their experience is significant. Therefore, special provisions should be made to allow them to serve as independent directors.

When asked why companies struggle to appoint a woman independent director, Riad Mahmud, newly elected chairman of Bangladesh Association of Publicly Listed Companies (BAPLC) and MD of National Polymer, said that companies are genuinely trying to comply with BSEC rules, but implementation is challenging.

He explained, "Even if a qualified candidate is available, many hesitate to take on the role. For those interested, meeting all requirements is often difficult. If the rules are slightly relaxed, many companies would comply more easily."

IFC ESG Officer Lopa Rahman highlighted that gender-diverse boards are directly linked to strong governance and improved financial performance. Global evidence shows that companies with women in leadership generally perform better in financial metrics and governance standards.

Sanzida Kasem, FCA, managing partner of A Kasem & Co and a member of ICAB's GILC, presented the latest ICAB survey results. She noted that currently, 21 women chartered accountants serve on boards across nine sectors, and 134 additional women FCAs are fully prepared for independent director roles. Moreover, 75% of ICAB's women members hold postgraduate degrees, reflecting strong educational and professional depth. ICAB has also built a robust pipeline of future women leaders ready to contribute effectively at the board level.

Both ICAB and IFC emphasised that increasing women's participation as independent directors is not just a compliance requirement but a strategic opportunity to improve governance, strengthen board oversight, and enhance long-term corporate performance.

The organisations also reaffirmed their commitment to continue collaboration with regulators, professional bodies, corporate leaders, and development partners. Their focus includes: Expanding board appointment opportunities for qualified women. Supporting structured governance and leadership training programs.

Establishing a transparent, merit-based national pipeline of independent directors, open to both men and women, to promote inclusive and effective corporate governance across Bangladesh.

Square Pharmaceuticals has achieved a significant overseas milestone as its Kenya-based subsidiary reported an operating profit for the first time, less than two years after starting commercial production.

The turnaround at Square Pharmaceuticals Kenya EPZ Limited underscores the Bangladeshi drug maker's growing manufacturing and market footprint in East Africa, a region seen as one of the fastest-expanding pharmaceutical markets on the continent.

According to the audited financial statements for the year ended 30 June 2025, the Kenya unit posted an operating profit of Tk10.20 crore and a net profit of Tk10.21 crore.

This marked the first instance of sustained profitability driven by core operations, rather than foreign exchange gains. In FY23, the subsidiary's marginal profit was largely attributable to exchange-rate movements, while its operating performance remained deeply negative.

Revenue growth played a central role in the turnaround. Sales surged to Tk74.47 crore in FY25 from Tk27.38 crore a year earlier, reflecting a 172% year-on-year increase in local currency terms as the company gained traction in the Kenyan market.

Improved market penetration, higher capacity utilisation and tighter cost controls helped turn the gross margin positive, enabling the plant to cross the operational breakeven point, said the company in the annual report.

In its audit report, Square Pharmaceuticals said the board was "pleased to report" that the Kenya factory had achieved net profit after tax for the first time, describing the achievement as a "validation of the company's execution strategy".

The management noted that reaching profitability within just one and a half years of operation highlights the efficiency of the manufacturing setup and the strength of demand for its products in the region.

FY25 also marked another milestone for the subsidiary as it recorded its first export shipment from the Kenyan plant. Although the initial export value was modest at around Tk0.55 crore, the company said it signals the beginning of a broader regional export drive and positions the unit to benefit from cross-border trade within the East African Community.

Despite the return to profitability, the directors did not recommend any dividend for the year, opting instead to focus on recovering accumulated losses and preserving capital for future expansion.

Square Pharmaceuticals Kenya EPZ Limited was incorporated in June 2017 and operates a state-of-the-art manufacturing facility at Athi River EPZ in Machakos County.

The plant began commercial operations in January 2023, with products reaching the market from March that year. Square Pharmaceuticals PLC holds 100% ownership of the subsidiary.

Kenya's pharmaceutical market was valued at nearly $1 billion in 2024 and is projected to grow to $1.6 billion by 2031, driven by rising healthcare demand and policy support for local manufacturing.

Overdue agricultural credit of scheduled banks rose 88 percent year-on-year to Tk 22,120 crore at the end of September 2025, according to a Bangladesh Bank (BB) report.

The central bank attributed the sharp rise mainly to state‑owned specialised banks, private commercial banks, and state‑owned commercial banks, as highlighted in its monthly report on agriculture and rural finance.

The revised loan classification criteria, effective from April 2025, also contributed to the significant increase in overdue loans.

BB said the surge signals growing concerns over credit recovery and the need for stronger oversight and risk management in the sector.

At the end of September, the outstanding balance of agricultural credit, including interest, stood at Tk 59,500 crore, reflecting an 8 percent increase from Tk 54,928 crore a year earlier.

Grameen Bank and 10 large NGOs collectively disbursed Tk 18,464 crore in microcredit in September this year, a 21 percent rise from the same month of the previous year. Recovery amounted to Tk 16,968 crore, up 16 percent year‑on‑year.

Their outstanding microcredit balance stood at Tk 123,006 crore, with overdue loans of Tk 8,383 crore, representing nearly 7 percent of the total.

The overdue amount for microfinance institutions (MFIs) reached Tk 8,383 crore at the end of September 2025, a 20 percent increase from Tk 6,997 crore in September 2024.

Bangladesh Bank said the rise was driven by erratic borrower behaviour and repayment difficulties caused by crop losses from floods and rising living costs.

PKSF's loan programme had an outstanding balance of Tk 13,692 crore at the end of September, with overdue loans of Tk 108 crore.

Bangladesh Bank said that although MFIs experienced higher overdue balances due to borrowers' hardships associated with floods and rising living costs, PKSF and major microfinance institutions demonstrated strong recovery growth and expanding outreach.

Despite a challenging macroeconomic environment marked by political instability, economic slowdown, and persistent inflationary pressure, the Small and Medium Enterprises (SME) platform of the country's stock exchanges demonstrated mixed but resilient performances at the end of the 2024-25 fiscal year.

According to data from the Dhaka Stock Exchange (DSE), out of the 20 companies listed on the SME platform, 15 have so far published their annual financial statements for FY25. Of these, six companies reported higher profits compared to the previous year, eight saw a decline in profits, and one company incurred a loss.

Fourteen SME-listed companies declared dividends for FY25. In contrast, many companies listed on the main board failed to declare any dividends due to financial stress. As a result, the SME platform has maintained a comparatively stronger position in terms of dividend payouts.

Market insiders say that although SME companies operate on a smaller scale, their efficient business structures and cost management have helped them remain resilient during difficult times. Consequently, the SME platform has offered investors a degree of stability despite broader market pressures.

Nialco Alloys, the first company listed on the Chittagong Stock Exchange's SME platform, posted a net profit of Tk6.90 crore in FY25, up from Tk5.01 crore in the previous fiscal year. The company's earnings per share (EPS) rose to Tk2.42 from Tk1.76 year-on-year. Reflecting this growth, Nialco Alloys declared a 10% cash dividend for its shareholders, compared to 6% in the previous year.

A manufacturer of copper alloy products, Nialco Alloys exports 100% of its output to Europe, Africa, and Asia. Japan remains one of its key markets, accounting for 56% of total exports in the last fiscal year. On Thursday, the company's share price on the DSE rose by 5.94% to Tk21.10.

Another SME-listed company, Himadri Limited, recorded an 11.40% increase in EPS in FY25. Its EPS stood at Tk3.81, up from Tk3.42 in the previous year. While the company announced a 5% cash dividend along with a proposed 100% stock dividend, the Bangladesh Securities and Exchange Commission (BSEC) rejected the stock dividend plan. The regulator raised concerns over intangible assets, tax liabilities, and capital reserves highlighted in the company's latest audited financial statements.

Incorporated in 1974, Himadri Limited is a subsidiary of the Ejab Group and primarily provides cold storage services for agro-based products, particularly potatoes, in northern Bangladesh. The company currently operates six potato cold storage facilities in Rangpur, Bogura, Joypurhat, Thakurgaon, Gaibandha, and Dinajpur.

Several other SME-listed companies, including MK Footwear, Mamun Agro, Master Feed, and Krishibid Seed, also achieved positive growth in FY25. Among them, MK Footwear posted the strongest performance, with EPS surging by 115% to Tk1.83 from Tk0.85 a year earlier. On Thursday, the company's share price stood at Tk55 on the DSE.

Meanwhile, Star Adhesives declared a higher dividend despite a decline in profits. For FY25, the company announced a total dividend of 62.5%, comprising 12.5% cash and 50% bonus shares. On Thursday, its share price climbed 9.33% to Tk106.60 on the DSE.

However, not all companies delivered strong results. Mostafa Metal Industries saw its profit plunge by 62.5% in FY25, with EPS dropping to Tk0.45 from Tk1.20 in the previous year. Similarly, Oriza Agro reported a 31.43% decline in EPS, while Web Coats posted a 29% drop in earnings.

No new companies have been listed on the SME platform since the July 2024 movement, resulting in prolonged stagnation. In addition, the absence of margin loan facilities has discouraged many investors from participating in SME shares. Market participants also point out that dividend payment practices of several SME companies are not sufficiently market-friendly, further dampening investor interest.

Without margin trading support, a large segment of investors remains inactive in the SME market, creating liquidity constraints and limiting market depth as well as the overall investment appeal of the platform.

Despite these challenges, investors remain hopeful that promising SME companies will raise funds from the capital market in the coming fiscal year, helping to revive momentum and restore confidence in the SME platform.

Bangladesh's healthcare market is projected to reach $23 billion by 2033, driven by rising demand for quality care and the increasing prevalence of non-communicable diseases such as diabetes and cancer, a top official of United Hospital Ltd said yesterday.

The current market size, including hospitals, diagnostics, devices, and pharmaceuticals, is around $14 billion, said Malik Talha Ismail Bari, managing director and CEO of the leading hospital.

He shared the information citing studies at a seminar on Bangladesh's healthcare system, organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in Dhaka.

"Private hospitals, clinics, and specialised care providers now serve a large portion of demand, significantly increasing the private sector's share," he said.

He added that the annual outflow of money for healthcare amounts to about $5 billion, mainly due to a deficit of trust and doubts over diagnostic accuracy.

"Patients often travel abroad not because treatment is unavailable at home, but due to a lack of confidence in diagnostic accuracy, bill shocks, hidden charges, and concerns over counterfeit drugs and low-quality surgical materials," he said while delivering the keynote address.

India remains the top destination for Bangladeshi patients, followed by Thailand, Singapore, and Malaysia.

Patients feel that Kolkata offers better value through cleaner facilities, clearer billing, and more attentive medical and nursing care than comparable private hospitals in Dhaka, he said.

He also noted that out-of-pocket healthcare expenditure in Bangladesh stands at 74 percent, which is higher than in neighbouring India, Sri Lanka, and Nepal.

At the event, National Prof AK Azad Khan, president of the Diabetic Association of Bangladesh, said that although Bangladesh has made notable progress in the healthcare sector, the desired quality standards have yet to be achieved.

He said healthcare quality in Bangladesh lags behind that of developed countries and even some neighbouring nations.

He stressed the importance of implementing primary healthcare and added that, along with overall management development, decentralisation is crucial for improving the health sector.

DCCI President Taskeen Ahmed said there are disparities in service quality between public and private hospitals.

Shortages of skilled manpower, the rise of unauthorised clinics and pharmacies, weak regulatory oversight, and limited use of modern technologies continue to erode public health security and trust, he said.

Due to the absence of an effective health insurance mechanism, individuals have to bear nearly 74 percent of total healthcare expenditure themselves, posing serious financial risks for low- and middle-income groups.

To ensure a sustainable healthcare system, he stressed the need for foreign investment, public-private partnerships, modern medical technologies, and skilled professionals.

European firms are accelerating efforts to diversify away from Chinese supply chains as Beijing's self-reliance drive and export controls deepen global trade uncertainty, the European Union Chamber of Commerce in China said on Wednesday.

China's trade surplus topped $1 trillion for the first time in November, as exports to Europe, Australia and Southeast Asia surged in the wake of US tariffs, fuelling diplomatic tensions over unsustainable trade imbalances.

Chinese shipments to the United States dropped 29% year-on-year in November, while exports to the EU grew an annual 14.8%.

The EU's trade imbalance with China widened to 1:4 in container terms, compared with 1:2.7 in 2019, the lobby group said in a report. Persistent deflation and the ongoing depreciation of the yuan against the euro have exacerbated European firms' trade woes.

"Probably the biggest problem we've seen in the Chinese economy is that there have been 37 consecutive months of factory gate deflation," Jens Eskelund, the chamber's president, told reporters at a briefing.

"When we have this gap between deflation in China and inflation in Europe, that adds to the imbalance in currency."

Beijing's expansive export controls on rare earths and critical materials have "sent European businesses into crisis mode," with some firms reporting production stoppages and millions of euros in losses, the report said.

As a result, more than 70% of European firms in China have reviewed their supply chain strategies over the past two years, the report said. Of these, over a quarter are onshoring further into China, while 10% are building alternative supply chains outside the country.

Sectoral disparities are stark: 80% of pharmaceutical firms and 46% of machinery makers are increasing localisation, while 33% of IT and telecom firms and 25% of retailers are diversifying away from China, according to the report.

However, 22% of European firms still import critical components from China with no viable alternatives, the report said, highlighting persistent supply chain vulnerabilities.

"When we look at the rare earth magnets in terms of dependencies, it's barely the tip of the tip of the iceberg," said Eskelund.

The group said last week that one in three member companies was looking to shift sourcing away from China due to Beijing's export control regime.

French President Emmanuel Macron called China's ballooning trade deficit with Europe "a matter of life or death for European industry" in an interview last week, saying he had threatened Beijing with tariffs.

The report said China's willingness to use its supply chain dominance to exert pressure on trade partners is being met with increasing pushback from affected countries, such as a more "offensive" China policy from the EU.

The European Commission will make proposals next month to bolster EU industry, with requirements to prioritise locally manufactured goods that would reduce its reliance on imports from China.

Bangladesh Bank has eased procedures, allowing industrial importers to bring in capital goods on a usance term of up to three years without requiring prior approval from the Bangladesh Investment Development Authority (Bida).

The central bank issued a circular today referencing the decision of the 186th meeting of the Scrutiny Committee on Foreign Loan/Supplier's Credit of Bida, chaired by the Bangladesh Bank governor.

The new instruction aims to simplify access to import finance for industries against the import of capital goods for a tenor of three years.

Presently, a three-year tenor is allowed only for the import of capital machinery.

Industry insiders noted that the latest decision removes procedural hurdles, enabling businesses to import capital goods—such as ships and equipment—on up to three-year usance terms.

This, they said, will significantly improve investment planning and support capacity expansion in key productive sectors.

Bangladesh's economic growth may decelerate to 4.7 per cent in the current fiscal year but inflation gets bridled with tighter monetary-policy actions, shows a mixed picture portrayed by the Asian Development Bank.

The development financier, however, paints a better scenario of South Asia in its December version of Asian Development Outlook (ADO) on the back of advances of several economies, including India's.

In the September 2025 ADO, the Manila-based financier had forecast Bangladesh's gross domestic product (GDP) growth a bit higher at 5.0 per cent for the fiscal year 2025-26.

The latest growth outlook is also much lower than its April 2025 ADO, wherein the ADB had projected a 5.1-percent GDP growth, 0.40-percentage-point higher than the latest-projected 4.7 per cent.

Bangladesh's prospective economic growth is slashed for the FY2026 amid weak exports and upcoming election uncertainty, the Asian Bank says in its December 2025 outlook unveiled Wednesday from its headquarters.

Meanwhile, the development financier has projected 6.0-percent economic growth for South Asia as Indian and other economies would perform better than Bangladesh's.

The regional growth forecast in the September 2025 ADO was at the same rate of 6.0 per cent.

Despite a gloomy economic outlook, Bangladesh's inflationary pressure in the current FY will be the same at 8.0 per cent, according to the ADB assessment.

Such weak GDP-growth projection is attributed to several significant headwinds, including weaker-than-expected export performance and heightened uncertainty regarding investment, which stems from the anticipated effects of policy related to the upcoming national elections scheduled for February.

The reduced forecast also reflects "weaknesses in the financial sector", says the ADB.

It notes that exports, a key component of the economy, have faced considerable pressure.

"They have been weighed down both by subdued global demand and by internal supply disruptions. A major factor was a strike in October at Chittagong Port, which severely hampered trade flows, as this facility handles more than 90 per cent of Bangladesh's imports and exports."

Despite the downgrade in the FY2026 growth projection, the ADB forecasts that Bangladesh's inflation will be remain unchanged at 8.0 per cent.

This stability is predicated on the assumption that the government will maintain tighter monetary and fiscal policies.

Furthermore, continuous efforts to mitigate exchange-rate volatility and the beneficial impact of declining global commodity prices are expected to keep the inflation outlook steady.

It is notes that while the forecast for FY2026 has been lowered, the country's growth outlook for this fiscal year remains unchanged from previous projections of 4.0 per cent.

Meanwhile, the economic outlook for South Asia has improved for 2025, largely driven by stronger-than-anticipated growth in India, although the regional forecast is tempered by a downward revision for Bangladesh.

Growth in South Asia is expected to remain robust, with the FY2025 forecast revised upward to 6.5 per cent from 5.9 per cent, and the FY2026 forecast maintained at 6.0 per cent, the ADB states in the report.

This is driven by upgrades to India's outlook based on robust growth in domestic consumption.

Sri Lanka's forecast is revised upward for FY2025 and FY2026 due to robust credit expansion, buoyant consumption, and improved investor confidence following rating upgrades.

In contrast, Bangladesh's FY2026 projection is lowered due to weaker exports amid subdued global demand and supply disruptions, while the forecast for FY2025 remained unchanged.

Pakistan's FY2025 growth outlook is upgraded following a stronger than-expected Q4 growth. Forecasts for the remaining South Asian economies are retained, although Nepal faces lingering uncertainty in the aftermath of civil unrest in September and the ongoing political transition.

The strong upward trend in remittance continues as Bangladesh received more than US$1.16 billion in the first nine days of December, according to the latest data from Bangladesh Bank.

The amount marks a 22.6 percent rise from the same period last year when expatriates sent around $945 million.

Officials attribute the growth to incentives for sending money through formal channels, stronger encouragement for using the banking system, and the active role of authorised exchange houses.

Between July 1 and December 9, total receipts reached $14.2 billion, up by $2.12 billion from $12.08 billion in the corresponding period of FY 2024-25. This reflects a year-on-year growth rate of 16.5 percent.

Launched in 2018 with big expectations but years of red ink, the country's first satellite, Bangladesh Satellite-1, posted its maiden profit in FY2024–25, and it did so by using only half of its capacity.

State-owned Bangladesh Satellite Company Limited (BSCL), which operates the satellite, reported a net profit of Tk38.35 crore for the just-ended fiscal year, reversing losses in every previous year. The board approved the audited accounts on 1 December.

The numbers show a company that is slowly finding its market. Revenue rose 9.24% year-on-year to Tk187.07 crore, driven mostly by bandwidth sales to television channels, radio stations, DTH operators, the armed forces, and both public and private agencies. Of the satellite's 40 transponders, 26 are now commercially active.

"We have taken several initiatives to sell the unused capacity at home and abroad," BSCL Managing Director and CEO Imadur Rahman told TBS.

Dedicated commercial teams have been formed, and investments made to improve service quality, he said, adding that cost management, skills upgrading and tighter operational discipline have also helped steady the company.
'Bangabandhu Satellite-1' renamed 'Bangladesh Satellite-1'

Even so, BSCL is utilising only 50% of its satellite capacity. "A satellite is considered successful when 80% of its capacity is used globally. Our target now is to raise utilisation to that level," Rahman said.

One potential boost is the company's new role as an authorised reseller of Starlink. If managed well, Rahman believes the partnership could strengthen BSCL's overall business.

The turnaround this year has come from multiple fronts. BSCL posted an operating profit of Tk2.61 crore for the first time, while income from FDRs and bank deposits pushed non-operating profit up 58% to Tk58.06 crore — a major driver of the bottom line. The company charges monthly fees for transponder and bandwidth usage, with prices varying by band and service type.

Beyond broadcasting, BSCL has been expanding into satellite-based data connectivity, maritime and aviation services, emergency communication, and customised solutions for government and private clients. Officials say this diversification is key to building a sustainable revenue base.

To strengthen long-term capacity, BSCL has stepped up collaboration with universities, research bodies and technology companies to develop skilled satellite engineers and space technologists.

Formed in 2017 under the Ministry of Posts and Telecommunications, BSCL began full-scale commercial operations after the launch of the satellite in 2018.

Its next ambition is already on the horizon: the government is assessing the feasibility of Bangladesh Satellite-2, which could support advanced applications in weather forecasting, agriculture, disaster management, remote sensing and national security.

The government has borrowed a total of Tk10,000 crore outside the scheduled October-December 2025 treasury bill and bond calendar, according to Bangladesh Bank officials.

Today (10 December), the government raised Tk5,000 crore through a 91-day treasury bill auction conducted outside the calendar. In addition, at the end of November, another Tk5,000 crore was raised through a five-year treasury bond auction with an interest rate of 10.55%.

"This brings the total off-calendar borrowing for the October-December quarter to Tk10,000 crore," a senior Bangladesh Bank official told The Business Standard, confirming the development.

A senior Bangladesh Bank official said the government has borrowed off-calendar, likely due to the Tk20,000 crore capital injection into Sammilito Islami Bank, creating a short-term liquidity need. "Treasury bills and bonds are being used to manage these funds," he added.

Supporting this view, a treasury head at a private bank noted that with most government projects currently on hold, the move was primarily a fund-management measure. Another central bank official added that Bangladesh Bank is closely monitoring the situation to ensure it does not trigger inflation.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said it is normal for the government to supply funds in one area while borrowing in another.

"However, the scale of borrowing from the banking sector should not create distortions that could disadvantage private borrowers. As demand for private-sector loans rises, care must be taken to ensure fair access," he noted.

Although South Asia’s economic growth projection has been upgraded, the Asian Development Bank (ADB) has revised down Bangladesh’s growth outlook to 4.7 per cent for the current fiscal year (FY) 2025-26.

In its previous Asian Development Outlook (ADO), the ADB had forecast Bangladesh’s growth at 5.0 per cent, which has now been revised down in its updated version released on Wednesday.

Bangladesh’s economic growth outlook for FY2026 has been cut to 4.7 per cent from 5.0 per cent in the September ADO, the ADB said in its ADO December 2025, unveiled on Wednesday from its headquarters.

The lowered forecast is attributed to several significant headwinds, including weaker-than-expected export performance and heightened investment uncertainty stemming from anticipated policy effects related to the upcoming national elections scheduled for February.

The reduced projection also reflects continued weaknesses in the financial sector.

Exports, a key component of the economy, have faced considerable pressure due to subdued global demand and internal supply disruptions. A major factor was a strike in October at Chittagong Port, which severely hampered trade flows, as the facility handles more than 90 per cent of Bangladesh’s imports and exports, the ADB said.

Despite the downgrade in the FY2026 growth projection, the inflation forecast for Bangladesh remains unchanged at 8.0 per cent.

This stability is based on the assumption that the government will maintain tighter monetary and fiscal policies. Additionally, ongoing efforts to reduce exchange rate volatility and the beneficial impact of declining global commodity prices are expected to keep the inflation outlook steady, it said.

It is noted that while the forecast for FY2026 has been lowered, the country’s growth outlook for the current fiscal year, FY2025, remains unchanged from previous projections of 4.0 per cent.

The Bangladesh Securities and Exchange Commission (BSEC) has expressed concerns over the audited financial statements of 31 listed banks and non-bank financial institutions (NBFIs) for the fiscal year ending 31 December 2024, citing issues raised by the auditors.

Auditors have flagged the banks' and NBFIs' financial health and governance, citing adverse or qualified opinions, emphasis of matter, going concern risks, and other material uncertainties.

The BSEC sent a letter to the Bangladesh Bank on 4 December to take necessary regulatory action against the 19 banks and 12 NBFIs.

The commission said auditors' observations could undermine investor confidence, reduce market transparency, and affect overall trust in the capital market.

BSEC Director and spokesperson, Md Abul Kalam, said TBS, "Problems in financial statements affect not just individual institutions but the entire market. We have informed Bangladesh Bank to take the necessary measures to protect investors."

Identified Banks: AB Bank, Al-Arafah Islami Bank, Dhaka Bank, Eastern Bank, First Security Islami Bank, ICB Islamic Bank, IFIC Bank, Mercantile Bank, National Bank, NRB Bank, NRBC Bank, One Bank, Prime Bank, Pubali Bank, Rupali Bank, SBAC Bank, Social Islami Bank, Standard Bank, and United Commercial Bank PLC.

Identified NBFIs: Bangladesh Finance, Bangladesh Industrial Finance Company, Bay Leasing and Investment, Fareast Finance and Investment, FAS Finance and Investment, First Finance, International Leasing and Financial Services, Islamic Finance and Investment, Midas Financing, Peoples Leasing and Financial Services, Phoenix Finance and Investments, and Union Capital Limited.

BSEC said that ensuring the credibility of financial statements is critical for market stability. Companies with going concern risks require special attention. Prompt action by the Bangladesh Bank would help strengthen financial governance and restore investor confidence.

Chinese firms are expanding in Vietnam, leading investment inflows and sending record shipments to Hanoi in defiance of US calls for decoupling, as the Communist neighbours beef up ties.

Recent steps that Hanoi had long resisted on security grounds include sensitive tech contracts for Chinese telecoms firms Huawei and ZTE; approval of Chinese loans for high-speed rail links; and Chinese-made COMAC planes cleared by regulators for a leading airline.

Hanoi's overtures to Beijing may reflect its long-standing policy of balancing foreign ties after pledges made to Washington in trade talks, said Alexander Vuving of the Asia Pacific Center for Security Studies.

But if the trend continues, Vietnam "may become a 'torn country' rather than a 'swing state'," he added, citing risks to Western relations.

While the Southeast Asian nation opened its economy to US multinationals and technology after Washington lifted its embargo in the 1990s, it stayed cautious over China, after their 1979 war and disputes over South China Sea boundaries.

Now Beijing's influence is rising and US ties are strained by tariffs.

Chinese firms make pledges to transfer technology, rare until now, and increasingly view Vietnam as a consumer market rather than just an assembly base, a Reuters review of data and industry interviews showed.

The shift has been turbocharged by tariffs of 20% imposed by Washington, said Phan Xuan Dung, a researcher at the ISEAS-Yusof Ishak Institute in Singapore.

"Vietnamese officials were displeased by what they saw as punitive US measures, and this pushed them to hedge by leaning economically further into China," he added.

Vietnam's foreign ministry and the White House did not respond to requests for comment.

China's foreign ministry said economic cooperation benefits both countries.

Record imports from China

Despite US pressure to curb reliance on Chinese technology and components, imports from China stood at about $168 billion through 30 November, up nearly 30% on the year and already well above all of 2024, itself a record year, Vietnamese data shows.

Nearly one-third are electronic parts, often re-exported in goods bound for the United States. Consumer imports, including vegetables and cars, are also climbing.

Fading anti-China sentiment among younger Vietnamese is helping drive the surge, dovetailing with Beijing's push to find new markets amid US tariffs, and emboldening Chinese companies to take on domestic champions.

E-scooter maker Yadea sold more than 36,000 units in Vietnam in the year's first 10 months, ranking fourth nationwide, according to non-public registration data obtained by Reuters.

Though far behind domestic EV leader VinFast, Yadea is its main rival in the fast-growing electric market, while internal combustion engine leaders Honda and Yamaha lose ground as Vietnam phases out petrol vehicles.

EV giant BYD, which is expanding dealerships and charging stations nationwide, also keeps sales figures confidential.

Yadea and BYD did not respond to requests for comment.

Chinese retailers and tech giants are also advancing.

"One notable highlight of the HCMC retail market since late 2024 has been the entry and expansion of Chinese brands," real estate agency CBRE said in August, citing the spread of chains such as KKV in Ho Chi Minh City, with a similar trend in Hanoi.

TikTok, owned by ByteDance, is Vietnam's top social platform for shopping, an October survey by market research firm Q&Me showed.

Lazada, part of Alibaba, ranks among leading e-commerce sites, while Tencent is an indirect investor in Shopee and Tiki, Vietnam's other two top online retailers.

A new breed of investors

Chinese investment in Vietnam has been growing for years, as suppliers relocated to avoid US tariffs.

Now joint ventures with Vietnamese partners are becoming more common, at times involving transfers of technology, said Steve Bui, chairman of the Vietnam China Business Council.

Apart from confidential deals, 12 Chinese members of the council have transferred, or plan to transfer, technology to Vietnamese partners this year, versus none in 2024, he said, in a sign of long-term commitments.

Among them is CNTE, backed by battery maker CATL, which produces battery energy storage systems (BESS).

CNTE has partnered with Delta E&C, a firm headed by Bui, to build a factory in northern Vietnam aiming to export 250 containers a year from 1 October 2026, Bui said.

CNTE said it was providing "technical support".

From January through 30 November, Chinese and Hong Kong firms pledged more than $6.7 billion, making them Vietnam's largest investors, official data shows.

At the DEEP C industrial park, one of northern Vietnam's largest clusters, Chinese manufacturers make up a quarter of tenants, up from 10% in 2019, said sales director Koen Soenens.

What began as tariff hedging is now "as much about insurance as growth," said Dan Martin of consultancy Dezan Shira.

The scale and diversity of Chinese projects "is reshaping Vietnam's industrial landscape", he added.

The Bangladesh Securities and Exchange Commission (BSEC) has rejected Himadri Limited's plan to issue a 100% stock dividend, citing qualified opinions in the company's latest audited financial statements.

According to the firm's filing with the Dhaka Stock Exchange (DSE), the commission said it was "not in a position to accord consent" to increasing the paid-up capital via the proposed bonus-share issuance.

The BSEC flagged concerns over intangible assets, tax liabilities, and capital reserves in Himadri's FY2024-25 audited accounts, raising doubts about the company's readiness for such a large bonus.

Following the announcement, Himadri's share price remained unchanged at Tk688.90 during the day's trading. The board had earlier recommended a 5% cash dividend alongside the 100% stock dividend for FY25.

For FY25, the company reported earnings per share (EPS) of Tk3.81, up from Tk3.42 in the previous year. Its net asset value (NAV) per share stood at Tk522.87, slightly higher than Tk522.19 a year earlier, while net operating cash flow per share (NOCFPS) dropped to Tk1.70 negative.

The rejection comes amid regulatory scrutiny of Himadri's aggressive share-capital expansion.

In FY23, the company issued a massive 250% stock dividend, which significantly inflated its number of shares. Before that stock dividend was declared, Himadri's share price soared above Tk7,000 each. After the record date and subsequent price adjustment, the stock plunged to around Tk2,168, raising concerns among investors about speculative trading and unrealistic price movements.

Over the past two decades, Bangladesh's tax structure has shifted sharply, with value-added tax (VAT) emerging as the largest source of government revenue. The change has increased the burden on consumers, as VAT is an indirect tax that applies equally to everyone, regardless of income.

VAT is charged at every stage of production and sale, and consumers always bear the final cost. Families end up paying more for everyday items such as edible oil, biscuits, soap, detergents, medicines, LP gas, and clothes.

Data from the National Board of Revenue (NBR) shows that in FY01, VAT accounted for 27.11 percent of total tax receipts, income tax for 19.44 percent, and import tariffs for 53.45 percent. By FY25, VAT had risen to 38.15 percent, income tax to 34.8 percent, while import tariffs had fallen to 27.05 percent.

VAT became dominant in FY11, surpassing import tariffs for the first time, as customs revenue declined under trade liberalisation.

Introduced in 1991, VAT has increasingly shifted the tax burden onto consumers, made government revenue more sensitive to inflation, and added compliance pressures for small and medium businesses.

Economists say that as import duties have declined, the government has relied more heavily on VAT, placing extra strain on households already facing high living costs.

"VAT is inherently regressive; everyone pays the same rate regardless of income," said Prof Abu Eusuf, executive director of Research and Policy Integration for Development.

"The growing dependence on indirect taxes, without a similar rise in direct taxes, is putting an unfair burden on low- and middle-income people. While advanced economies rely mainly on direct taxes, Bangladesh's pattern is reversed," he added.

Prof Eusuf also said that the government favours VAT because it is easier to administer. "Efforts to identify potential taxpayers or integrate databases have not yet produced visible results," he added.

As Bangladesh approaches LDC graduation in November 2026, declining tariff revenues are expected to push the government to rely even more on VAT.

NBR Chairman Abdur Rahman acknowledged this reliance. "No advanced economy depends heavily on trade-based taxes, and Bangladesh must gradually shift toward domestic revenue sources," he said yesterday while observing VAT Day at the NBR headquarters in Dhaka's Agargaon.

"Despite the potential of income tax, there are significant leakages. In the long run, most revenue should come from income tax, followed by VAT, while customs duties should play only a minimal role. With LDC graduation, this shift will become unavoidable," he added.

CALLS FOR A MORE BALANCED TAX SYSTEM

A new OHCHR study suggests that a more balanced tax system could reduce poverty and improve fairness. If direct taxes were increased and reliance on VAT reduced, the national poverty rate could drop from 18.7 percent to 17.7 percent, with the poorest households seeing poverty fall from 37.2 percent to 33.2 percent. The study also finds that this shift would slightly reduce income inequality.

Towfiqul Islam Khan, additional research director of the Centre for Policy Dialogue (CPD), said, "From the perspective of welfare and economic justice, those with greater ability should pay more. So, direct taxes should take priority. If VAT's share remains high, it simply means we're not collecting income or property taxes properly."

He added, "Tax evasion happens in both direct and indirect taxes. Even within indirect taxes, a major problem is that consumers pay, but the money does not reach the exchequer. Our direct tax collection is not working properly. Eliminating tax evasion should be the number one priority."

Finance Adviser Salehuddin Ahmed also raised concerns over VAT evasion, saying the tax often does not reach the government even though consumers pay it. "It is an unfortunate and persistent weakness in the VAT system," he said at a seminar marking VAT Day.

He stressed that the VAT system must be simple and free from manipulation. "If you or I pay VAT, it must reach the government exchequer," Ahmed said.

Highlighting consumer behaviour, he added, "If a business says it will not charge VAT, people accept it. This mentality must change. Taxpayers should be assured that they will receive services in return for what they pay."

He also pointed to examples abroad, saying, "In some countries, the tax-to-GDP ratio is 26 percent. Why do people pay? Because they are convinced the money will not be siphoned abroad and will be used properly. From the government's side, we must guarantee service delivery."

Towfiqul Islam Khan of CPD said an important question is whether the taxes collected actually reach people through public services. "If people receive public services, then the burden of taxes does not feel so heavy. If I received services, it would feel lighter," he said.

He cited Scandinavian countries, where both the tax-to-GDP ratio and tax rates are very high. "But because their social protection and public services are strong, the state plays a big role and provides quality services," he added.