Separating tax policy from administration and establishing a credible macro-fiscal framework are "mission-critical" reforms for Bangladesh, according to development partners and economists speaking at a high-level policy dialogue in Dhaka yesterday (26 April).

Jean Pesme, division director of the World Bank for Bangladesh and Bhutan, said strengthening the tax system requires urgent institutional clarity and consistent implementation.

"Let me begin by echoing two key points that have already been raised. First, the separation between tax policy and tax administration is absolutely mission-critical. While there may have been reasons for not advancing this reform earlier, it is something that now needs to happen. This separation is essential for improving governance within the tax system, as well as for advancing digitalisation," he said.

He stressed that Bangladesh must move forward with a clear tax reform roadmap and avoid policy reversals.

"The second major challenge is to establish a clear tax reform plan and begin implementation without policy reversals. What matters most at this stage is that the overall direction is crystal clear, and that implementation supports this direction to demonstrate credibility," he added.

Pesme also warned that investors judge policies based on execution rather than announcements. "From an investor's perspective, the key question is whether policy announcements will actually be implemented. It may be more effective to start with less ambitious reforms, but ensure they are properly executed."

He further said Bangladesh's investment climate requires stronger foundations, noting that revenue mobilisation, financial sector stability, and business environment reforms must move together. "Countries that attract investment do so not just through incentives, but through macroeconomic stability, strong institutions, rule of law and efficient administration," he added.

He also highlighted concerns over low tax-to-GDP ratio, high tax expenditures, and over-reliance on exemptions, stressing the need to broaden the tax base and improve transparency.

Echoing similar concerns, Chandan Sapkota, country economist at the Bangladesh Resident Mission of the Asian Development Bank, said revenue reform and macro-fiscal discipline are central to improving economic stability.

"I think the point on revenue is very important, particularly the institutional reforms around how the National Board of Revenue is structured," he said.

He noted that weak fiscal discipline creates mid-year policy adjustments and discretionary space within tax administration.

"Bangladesh is the only country in South Asia without a clear fiscal anchor. As a result, there is no strong discipline on the expenditure side, and when that discipline is missing, it also affects revenue discipline," he said.

He added that improving the macro-fiscal framework is urgent in the context of rising debt pressures and long-term fiscal sustainability.

The remarks came at a high-level luncheon organised by the Foreign Investors' Chamber of Commerce and Industry (FICCI) at a hotel in Dhaka today, focusing on "Conducive Fiscal Policy for a Better Investment Climate".

The event brought together policymakers, economists, development partners, business leaders, and members of the diplomatic community to discuss Bangladesh's fiscal outlook. The session featured M Masrur Reaz, chairman of Policy Exchange Bangladesh, as the keynote speaker. He noted that tax policy and administration remain key concerns for investors, citing high corporate tax rates, complex compliance processes, fragmented administration, and policy unpredictability as major challenges.

The panel discussion was moderated by Shams Zaman, board member of FICCI and country managing partner at PwC. Panelists included Jean Pesme of the World Bank, Chandan Sapkota of the Asian Development Bank, Fahmida Khatun, executive director of Centre for Policy Dialogue, and Abul Kasem Khan, chairperson of Business Initiative Leading Development (BUILD).

Panelists broadly agreed that ensuring policy stability, simplifying the tax system, strengthening institutions, and improving coordination among regulatory bodies will be critical to attracting and sustaining foreign investment in the coming years.

Fahmida Khatun called for tariff rationalisation to be the most urgent reform priority this year, stressing that Bangladesh must prepare for a post-LDC graduation reality by strengthening domestic revenue mobilisation without over-reliance on import duties.

Rupali Haque Chowdhury, FICCI president and managing director of Berger Paints Bangladesh, said that to improve the business environment, attract investment, and increase the tax-to-GDP ratio, it is essential to ensure transparency, digitalisation, and policy continuity.

Abul Kasem Khan said, "M Masrur Reaz showed a corporate tax rate of around 27.5%, but in reality we are paying close to 40%. One of my companies is even paying about 45% because of the Advance Income Tax. So, this requires a radical reform.

"I would suggest doing away with AIT if possible. I understand it is a difficult policy choice, but if additional taxes are collected on income or profits, that amount should either be refunded or adjusted against next year's liabilities."

He added, "If such a reform is introduced and linked with employment generation, it could create a strong incentive structure. Companies that generate more employment could receive refunds, encouraging them to reinvest profits into capital machinery, expansion, or new business ventures instead of distributing everything as dividends. This kind of reform would help promote reinvestment, productivity, and job creation."

Tax deduction at source (TDS) has long served as an efficient mechanism for revenue collection within Bangladesh’s income tax framework. However, its growing overlap with the turnover-based minimum tax, and the treatment of tax deducted at source as minimum tax in many cases under the Income Tax Act 2023, is creating unintended structural distortions in the business environment. While these measures may ensure a predictable revenue stream for the government, their combined effect is becoming increasingly burdensome for businesses, particularly in terms of cash flow, tax equity, and overall economic efficiency.

The main objective of the minimum tax is to ensure that no taxpayer is left out of the tax net. That is, even if a person or organization shows a loss or very little profit, they must pay a minimum tax on a certain basis. It is a way to prevent tax evasion and protect revenue. In Bangladesh, this minimum tax is mainly implemented in two ways.

First, the turnover-based minimum tax imposes a levy on gross receipts, irrespective of profitability. Currently, companies and institutions exceeding Tk 50 lakh in turnover and individuals exceeding Tk 4 crore are subject to this tax, with rates ranging from 0.1% to as high as 3% depending on the sector. For instance, tobacco and soft drink manufacturers face a 3% rate, mobile operators 1.5%, and most other sectors around 1%.

Second, Tax Deducted at Source (TDS), although legally designed as an advance tax, often functions in practice as a de facto minimum or even final tax. In theory, TDS should be adjustable against final tax liabilities. However, in reality, such adjustments are frequently limited or unavailable, particularly for businesses operating at a loss or with slim profit margins. As a result, taxes deducted at source effectively become non-refundable, locking in a tax burden regardless of actual income.

In many cases, TDS effectively serves as a minimum tax, ensuring that the government secures a certain level of revenue even when the taxpayer’s financial condition is unfavorable. A significant portion of taxes deducted or collected at source under various provisions, spanning Sections 88 to 139 of the Income Tax Act 2023, functions in this way.

Even if the final tax calculation suggests a lower liability, the amount already deducted or collected often remains unchanged, creating a structural mismatch and undermining fairness in the tax system.

This dual application creates a significant imbalance. A substantial portion of tax collected under multiple provisions of the Income Tax Act now carries the characteristics of minimum taxation. Consequently, businesses often face effective tax rates far exceeding statutory rates, sometimes by five to ten times. This is particularly damaging for credit-dependent enterprises, which may struggle to maintain liquidity, meet loan obligations, and sustain operations. The implications extend beyond individual firms, posing risks to the broader financial system, including banking sector stability.

Fundamentally, this structure deviates from the core principle of income taxation—that tax should be levied on net income, not gross receipts. By ignoring costs, losses, and the taxpayer’s ability to pay, the current system imposes what can only be described as economically punitive measures.

Moreover, the absence of a mechanism to carry forward excess minimum tax paid during loss-making periods further compounds the problem, effectively leading to elements of double taxation.

In contrast, most developed tax systems treat TDS strictly as an advance payment, fully adjustable against final liabilities. Even in neighboring economies like India, such adjustments are standard practice. Bangladesh’s partial and inconsistent integration of these systems has resulted in unnecessary complexity and diminished business confidence.

As the government prepares the national budget for 2026–27, there is a timely opportunity to recalibrate the tax framework. Several policy measures merit serious consideration:

Repealing the provision of minimum tax under Section 163, which conflicts with fundamental income tax principles and imposes disproportionate burdens.
Clearly redefining TDS as an adjustable advance tax, ensuring full reconciliation at the time of final assessment.
Rationalizing TDS rates, setting them at 2% for industrial and trading sectors, and 1% for service, advertising, and media sectors.
Reducing the turnover-based minimum tax rate to a uniform 0.5% to ease pressure on businesses.
Introducing a carry-forward mechanism to allow adjustment of minimum tax paid during loss-making periods against future profits.
Simplifying the overall tax structure to eliminate instances of multiple taxation on the same income stream.
Providing targeted relief or conditional exemptions for small and medium enterprises (SMEs), which are particularly vulnerable to cash flow constraints.
Revenue mobilization is undeniably critical for national development. However, it must not come at the expense of economic vitality. A tax system that is perceived as punitive or inequitable risks discouraging investment, stifling industrial growth, and undermining long-term competitiveness.

A balanced, transparent, and business-friendly tax regime is not merely desirable—it is essential. The upcoming budget presents a crucial opportunity to address systemic issues and lay the foundation for a more sustainable, growth-oriented fiscal framework. While ensuring revenue generation remains important, it is equally critical to foster a competitive and sustainable business environment.

The current structure of minimum tax and tax at source, combining features of advance, minimum, and partial final taxes, can act as a deterrent to investment, industrialization, and long-term economic growth. Therefore, the need of the hour is to revisit these mechanisms in the next budget and introduce a more balanced, fair, and investment-friendly tax system.

Bangladesh will not be able to realise its ambition of becoming a trillion-dollar economy by 2034 unless it revives investment, foreign investors and development partners said yesterday.

Without a turnaround in the investment climate, the country also risks falling short on other goals, such as sustained economic growth and job creation, said Jean Pesme, division director of the World Bank for Bangladesh and Bhutan.

At a meeting of the Foreign Investors’ Chamber of Commerce and Industry (FICCI) in Dhaka, he said attracting investment requires coordinated reforms in revenue policy, the financial sector and the wider business environment.

He said implementing only one reform in isolation would deliver limited results.

Foreign direct investment stood at just $1.6 billion in the fiscal year 2024-25, or around 0.33 percent of GDP, well below regional peers. Private investment was projected at 22 percent of GDP in FY25, the lowest level in 11 years, according to official data.

Pesme said global experience shows that tax incentives alone cannot offset a weak investment climate.

“Even where governments reduce the marginal effective tax rate and see an increase in foreign direct investment (FDI), the inflow is eight times higher when strong institutions, macroeconomic stability and rule of law are already in place,” he added.

He commented that Bangladesh’s revenue challenge lies less in tax rates and more in weak administration, governance shortcomings and extensive tax expenditures, which are almost as large as total collections.

According to the World Bank’s regional division director, the country depends heavily on tax holidays and sector-specific exemptions, especially for the ready-made garment sector. This creates distortions, opens the door to rent-seeking and increases resistance to reform, as changes inevitably produce winners and losers.

He highlighted the need to work on the investment climate and fiscal reform simultaneously so that they combine and reinforce each other.

“And when you look at the experience globally, the countries that really try to attract FDI through incentives are the ones that already have strong macro stability, rule of law, efficient administration and strong infrastructure.”

He also emphasised broadening the tax base and introducing greater uniformity by eliminating rent-seeking behaviour, reducing distortions, improving compliance and limiting incentives to game the system.

Predictability and credibility, he said, are essential.

“Improving tax administration can really bring results. We think revenue collection, as well as managing tax expenditure and services, is very important as it is about the quality of public spending.”

The results are not coming immediately, but the earlier you start, signal where you want to go, and then implement, in a systematic way, the better, he added.

Chandan Sapkota, country economist at the Asian Development Bank (ADB) resident mission in Bangladesh, said investors consistently raise concerns about taxes, especially the role of the National Board of Revenue (NBR).

“When we meet investors, everybody talks about taxes because their investment decisions are being impacted by NBR,” said Sapkota.

He said NBR often overrides investment promotion agencies. For instance, they introduce an investment facilitation programme, but in the middle of the year, NBR can issue a regulation that effectively nullifies it.

“Basically, there is no predictability of what is going to happen. So, I can see a reason why everybody says NBR,” said Sapkota.

Drawing on his experience in five countries, he said, “I think no other country has this kind of system, where you have agency that supersedes pretty much everything.”

To raise tax collection, he emphasised digitisation and stronger compliance.

The ADB economist said, “Even if you increase taxes, if the compliance regime is not tackled, your tax will not actually increase that much, but then people who are already paying taxes will be burdened more.”

He said the tax administration system must make it very difficult to avoid paying taxes. For example, it’s impossible to evade taxes in India, because everybody has a Aadhaar Card without which none can do anything.

In Bangladesh, he said, the national ID card should be linked with TIN and bank accounts to close that loop. He also suggested reducing multiple VAT rates to two or three to reduce leakages.

“The incentive mechanism, when they rationalise the taxes, should be designed in such a way that this is growth enhancing, productivity enhancing, rather than helping some sort of zombie firms to sustain operation for the sake of employment,” said Sapkota.

Fahmida Khatun, executive director of local think tank Centre for Policy Dialogue (CPD), said tax exemptions in Bangladesh continue indefinitely despite limited fiscal space. “If you really want to incentivize, there should be a sunset clause. But, once an exemption is in place, that goes forever,” she said.

AK Khan, chairperson of Business Initiative Leading Development (BUILD), said local investors face similar frustrations.

As a local investor, we also feel that there are a lot of constraints when we do or think of investments, which shows a huge gap between policy and practice, said Khan.

He pointed to weak coordination among ministries. NBR, the commerce ministry and other ministries often adopt separate policies on the same subject, leading to conflict and uncertainty.

And there is a serious conflict in policies that frustrate investors. He suggested running institutional reform, institutional coordination, and policy consistent and predictable.

M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh, presented a paper at the event. He said higher corporate taxes raise the effective cost of investment and cited the Organisation for Economic Co-operation and Development (OECD) data showing that FDI falls 3.7 percent for every 1 percent rise in the tax rate.

Bangladesh ranks 105th out of 141 countries in the Global Competitiveness Index due to weak business dynamism, poor product market conditions, low skills performance and infrastructure deficits, he said.

To build an investment-enabling fiscal framework, Reaz called for tax reform, greater efficiency in the annual development programme, institutional reform, improved budget credibility and fiscal consolidation.

Rupali Huque Chowdhury, president of FICCI, and Shams Zaman, a FICCI director, also spoke at the event.

Garment exporters yesterday urged the government to cut the source tax from 1 percent to between 0.5 and 0.65 percent, citing ongoing difficulties caused by domestic challenges and external pressures.

They also proposed keeping the reduced rate in place for the next five years.

In addition, they called for exemption from the 10 percent income tax on export incentive receipts, saying that export incentives have already been reduced as part of preparations for Bangladesh’s graduation from the least developed countries (LDC) group.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made these proposals in their budget recommendations for fiscal year 2026-27 (FY27), which were submitted to the National Board of Revenue (NBR) yesterday.

Both associations proposed setting the corporate tax rate for subcontracting factories at 12 percent instead of the current 25 to 30 percent, arguing that it should be aligned with existing policies where green factories pay 10 percent and non-green factories pay 12 percent.

They also said subcontracting factories, which place work orders with other factories, currently pay a 5 percent source tax on contract payments and demanded that it be reduced to 1 percent in the upcoming budget.

In addition, they proposed fixing the bond licence fee at Tk10,000 for three years, along with relaxed rules for sub-contracting and bond licence locking.

They also recommended exempting VAT and import duties on the import of man-made fibre and non-cotton yarn, saying this is necessary to expand production using man-made fibres and increase global market share.

Globally, around 75 percent of garments are made from man-made fibres, while in Bangladesh, over 70 percent of exports are cotton-based and only around 30 percent come from man-made fibres, meaning the country is missing significant opportunities.

They added that while cotton imports are already duty-free, similar tariff-free access should be extended to man-made fibre and yarn to stay competitive.

RMG UNDER PRESSURE AS EXPORTS FALL, COSTS RISE

The BGMEA, in its proposal, said the garment sector is facing an unprecedented set of challenges both at home and abroad, including global recession, geopolitical instability and tariff wars that have slowed export growth.

Internal issues such as rising costs of doing business, weak ease of doing business, and structural weaknesses are also affecting competitiveness.

Recent export data shows garment exports fell by 3.73 percent in July-February of FY26 compared to the same period of the previous fiscal year, with earnings continuously declining since August 2025.

As a result, factories are operating below full capacity, increasing fixed costs and overall production expenses.

New work orders have also slowed, with Bangladesh Bank data showing that back-to-back letters of credit (LC) openings for raw material imports fell by 6.79 percent in dollar terms during July-January of FY26.

Lower export orders, combined with reciprocal US tariffs and higher Chinese exports to Europe at competitive prices, have reduced export prices, with the average unit price of garments falling by 1.76 percent in July-February of FY26.

In the first seven months of FY26, imports of capital machinery dropped by 37.87 percent in the textile sector and 12.44 percent in the garment sector, continuing a negative trend from the previous fiscal year.

This reflects declining capacity and a weak investment climate, raising concerns about the sector’s future.

The data shows that the country’s main export-earning sector, the RMG industry, is going through a critical period, with around 400 garment factories closing over the past three years while many others remain financially weak.

At present, lending interest rates have risen to 12 to 15 percent, while energy costs have increased sharply amid ongoing shortages. Gas prices rose by 286 percent between 2017 and 2023, and electricity tariffs increased by 33 percent over the past five years.

Like most finance professionals, I have always taken a keen interest in the stock market since we have a fair understanding of how capital markets function and the intrinsic value of shares.

I have been a retail investor in Bangladesh's stock market for almost four decades and have witnessed both the rise and fall of the market over the years. I was also an active investor during the painful debacles of 1996 and 2010, two defining episodes when excessive speculation was followed by steep corrections that wiped out the savings of many ordinary investors. Having observed those cycles closely, I was fortunate to act prudently and exit at the proper time on both occasions.

My understanding of the capital market also comes from professional experience. I handled the largest initial public offering of Lafarge Surma Cement in 2003, when Bangladesh's capital market was still at an early stage of development. During my tenure there, I worked closely with many market intermediaries including merchant banks, investment banks, mutual funds and stockbrokers' associations. These experiences gave me insight into the workings of the market and the challenges faced by retail investors, institutional investors and listed companies, as well as firms planning to go public.

The stock market can play a vital role in Bangladesh's economic development by mobilising savings, financing productive enterprises, and creating long-term wealth for citizens. Yet for many ordinary investors, the experience has too often been marked by disappointment, volatility and loss.

Bangladesh has witnessed painful market episodes in 1996 and again in 2010, when excessive speculation drove prices far beyond fundamentals before sharp corrections erased the savings of countless retail investors. These events were not merely market cycles. They exposed structural weaknesses that still deserve serious attention.

A retail-dominated market

Bangladesh's capital market remains heavily driven by retail participation. Individual investors are an important part of any healthy market, but when a market lacks sufficient participation from pension funds, insurance companies, mutual funds and other long-term institutions, prices can become more vulnerable to rumours, manipulation and short-term trading behaviour.

In many cases, retail investors enter after prices have already risen sharply, driven by fear of missing out. More informed participants often exit during these rallies and re-enter during downturns when valuations become attractive. This mismatch repeatedly transfers wealth from less-informed participants to better-prepared ones.

Why retail investors often lose money

A recurring feature of the market is herding behaviour. Buying because others are buying and selling because others are selling. Instead of analysing company earnings, cash flows, governance standards or industry prospects, many investors rely on informal tips, social circles or online speculation.

This is understandable. Fundamental analysis requires time, knowledge and discipline. Most people have professions and responsibilities outside finance. Expecting every small investor to become a securities analyst is unrealistic.

That is why well-functioning markets around the world rely on professional intermediaries such as mutual funds, pension managers, research firms and licensed advisers. These institutions help channel household savings into diversified and professionally managed investments.

The problem of low-quality listings

Another longstanding concern is the presence of weak or inactive listed companies. Firms that remain on the exchange despite poor disclosures, irregular annual general meetings, prolonged dividend suspension, weak operations or little commercial activity.

When such companies remain listed for years, they can become fertile ground for speculative trading, especially low-capitalisation shares with limited free float. These stocks are easier to corner, easier to move sharply and easier to use in pump-and-dump schemes that trap unsuspecting investors.

A stock exchange should reward productive enterprise, not preserve shells that no longer serve investors or the economy.

Rebuilding confidence in collective investment

Bangladesh's mutual fund sector has had a mixed history. Past governance failures damaged public trust. However, newer and better-managed asset managers have begun to demonstrate stronger professionalism, improved compliance and better disclosure standards.

This is encouraging. A vibrant mutual fund industry can reduce reckless direct speculation by giving ordinary savers access to diversified portfolios managed by professionals. In neighbouring India, systematic investment plans and mutual funds have helped broaden disciplined retail participation over time.

Bangladesh can move in a similar direction but only if transparency and governance are non-negotiable.

What should be done

1. Clean up the listed universe

There should be a comprehensive review of companies that remain listed despite prolonged non-compliance, weak operations, poor disclosures, failure to hold annual general meetings or repeated inability to provide reasonable returns to shareholders. Firms that no longer meet the spirit of public listing should be required to restructure, merge, move to a separate category or eventually exit the market after a fair transition period. A credible stock exchange must reflect productive enterprises and investor confidence, not inactive or persistently weak entities. There is an urgent need to address this issue if confidence in the market is to be restored.

2. Strengthen surveillance, enforcement and brokerage transparency

Unusual trading activity in illiquid low-fundamental stocks should be detected quickly using modern surveillance systems. Manipulation must lead to visible penalties, disgorgement, trading bans and prosecution where appropriate. Enforcement must be swift enough to deter repeat offenders.

At the same time, brokerage houses must maintain far higher standards of transparency and client protection. There have been recurring complaints of unauthorised trades, margin accounts opened or activated without clear consent, and inadequate disclosure of risks and charges. In some cases, clients are also given informal recommendations on which shares to buy without adequate research, professional competence or proper suitability assessment.

Such practices can severely harm retail investors and further weaken trust in the market. Stronger oversight, mandatory digital confirmations, clearer documentation, professional standards for advisory services and swift action against violations are urgently needed.

3. Make mutual funds fully transparent

Every mutual fund should publish standardised monthly performance data, portfolio allocations, fees, historical returns, benchmark comparisons and net asset value (NAV) on fund websites and a central exchange portal. Investors should be able to compare products easily before investing.

4. Expand institutional participation

Policies that encourage pension funds, insurance companies and long-term domestic institutions to participate responsibly can help stabilise markets and improve price discovery.

5. Invest in investor education

Retail investors need simple practical education: diversification, valuation basics, risk management, avoiding leverage, recognising manipulation and distinguishing investing from speculation. They also need constant reminders through public awareness campaigns, brokerage communications and market institutions to be cautious about investing without adequate knowledge or relying solely on rumours and tips. A more informed investor base is essential for a healthier and more stable market.

6. Develop a reliable stock analysis platform

A central digital platform should be developed to provide investors with easy access to company fundamentals, financial ratios, dividend history, earnings trends, governance disclosures and comparative sector data. Such a platform could also include independent research tools and model-based recommendations such as buy, hold or sell, based on transparent methodologies and regular updates. This would help retail investors make more informed decisions, reduce dependence on rumours and tips, and promote a more research-driven investment culture in the market.

Investing is not gambling

Markets involve risk, but risk is not the same as gambling. Investing means allocating capital based on analysis, discipline and long-term expectations. Speculation based purely on hearsay, rumours or blind momentum is closer to chance than informed decision-making.

For many families, market losses are not numbers on a screen. They are years of hard-earned savings. Bangladesh owes these citizens a market built on fairness, transparency and trust.

The country does not need another speculative boom. It needs a credible capital market where sound companies raise funds, disciplined investors earn reasonable returns and confidence is built through rules that are enforced consistently.

That transformation is still possible but only if reform is pursued with urgency.

The Barapukuria coal mine yard in Dinajpur is now storing more than twice its designed capacity, with stocks continuing to rise and raising concerns over fire hazards, possible heap collapse and declining coal quality.

The situation has developed as the nearby Barapukuria Thermal Power Plant, operated by the Bangladesh Power Development Board (PDB) and the mine’s only coal buyer, has reduced consumption after two of its three units were shut down due to technical faults.

The yard, which has a storage capacity of 2.2 lakh tonnes, was holding about 5.7 lakh tonnes as of Tuesday. An additional 1 lakh tonnes is stored in the PDB’s own yard, which has a capacity of 60,000 tonnes.

The surplus is increasing daily, as the mine is producing around 3,000 tonnes of coal against a demand of only 700-750 tonnes.

Md Shah Alam, managing director of Barapukuria Coal Mining Company Limited, a subsidiary of state-owned Petrobangla, told The Daily Star over the phone that frequent fires are now occurring due to the excessive stockpile.

“A dedicated team is working around the clock to keep the fires under control,” he said.

POWER PLANT OUTPUT REDUCED

Abu Bakar Siddique, chief engineer of the Barapukuria Thermal Power Plant, said the facility has a total generation capacity of 525MW (megawatt), with Unit-1 and Unit-2 producing 125MW each, and Unit-3 producing 275MW.

He said only Unit-1 is currently in operation, supplying about 55-65MW to the national grid. Unit-3 has been shut since October 19, 2025, while Unit-2 has remained out of service since 2020 due to a mechanical fault.

“Unit-3, with a capacity of 275MW, is expected to resume operations by May this year. The process to overhaul Unit-2 is also underway,” he said.

Siddique added that when Units 1 and 3 operate together, the plant will require around 3,200 tonnes of coal per day.

“At that rate, about one lakh tonnes of coal will be used each month, and the current stockpile could be cleared in seven to eight months,” he said. “We are also working to expand the PDB’s coal yard capacity by an additional 50,000 tonnes.”

TRADING BLAMES

Officials from both the mine and the power plant have blamed each other for the growing coal stockpile.

Plant authorities say they requested a temporary suspension of coal production, while mine officials argue that output cannot be stopped due to technical limitations, safety risks and contractual obligations.

“We had asked the coal mine authorities to reduce coal extraction to help control spontaneous combustion and reduce other risks, but we received no response,” Siddique said.

Md Shah Alam rejected the suggestion of halting production. “There is no scope to stop mining once it begins, as it could increase risks, including a higher chance of spontaneous combustion,” he said.

“We are now extracting coal in two shifts instead of three,” he added.

He also said the crisis has worsened following a 2019 policy change that made the power plant the mine’s sole buyer, removing the option to sell surplus coal in the open market through tenders.

Monir Hossain Chowdhury, spokesperson for the Energy and Mineral Resources Division, said once coal is extracted, it becomes the property of the power plant.

“We do not have any mechanism to send that coal elsewhere,” he said.

He added, “It depends entirely on the plant authorities. Due to reduced power plant operations, the mine is facing difficulties as it lacks storage capacity. We are concerned about the issue, and the Power Division is working to resume production at the plant.”

Based on March global prices and the current exchange rate, the import cost of octane is Tk105.73 per litre. After the latest price hike – driven by supply constraints and rising global prices – it is being sold at Tk140 per litre at pumps.

This means consumers are paying Tk34.27 more than the import cost per litre. Of this, Tk27.57 goes to the government as import duty, VAT, development surcharge, transport costs, and margins for state-owned distributors.

When local transport costs and dealers' commissions are included, the total cost reaches Tk151.61 per litre – Tk11.61 higher than the retail price. The government counts this difference as a subsidy.

This creates a paradox: the government collects Tk27.57 per litre in taxes and charges, while also providing a subsidy of Tk11.61 per litre.

"This raises a valid question as to whether the government is truly subsidising octane," economist Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), told The Business Standard.

The same is true for petrol, which is usually priced Tk4 lower than octane.

However, the situation differs markedly for diesel, the most widely used fuel in public and goods transport, irrigation, inland water transport, and fishing.

Rising global prices have pushed the import cost of diesel to Tk148.06 per litre, which increases to Tk203.84 after adding duties, taxes, and operational and marketing costs. However, the government has fixed the retail price at Tk115 per litre – even after a Tk15 increase – effectively subsidising more than Tk88.84 per litre. This figure still includes over Tk55.78 (or 37%) in taxes and other costs.

Speaking to this newspaper, analysts and consumer rights groups say this "subsidy" exists only because of the fuel oil tax burden, as fuel oil remains among the major revenue sources for the government. They argue that if taxes were reduced or waived temporarily, and only distribution costs were added to the import price, octane could be sold at a much lower price than it is now, requiring no subsidy.

Major economies in the region, including India and Pakistan, slashed fuel oil taxes to lower price shocks on the people. India marginally increased the price of premium-grade oil, but kept the prices of the most-consumed diesel and petrol unchanged.

Though Pakistan raised oil prices, it exempted or slashed taxes for diesel and petrol. The country also introduced free bus services in cities, cash subsidies for bikers and farmers.

The EU is planning to cut electricity taxes and provide consumers with targeted and temporary support. The USA offers tax breaks to lessen the impact of gasoline price hikes and politicians there are calling for the federal tax to be exempted – 18.4 cents per gallon.

Price hikes in Bangladesh, effective from 19 April, were not backed by any such measures.

Maintaining existing VAT and tax rates while raising retail prices in line with international trends amounts to an "extortionist approach," where revenue generation appears to take precedence over public welfare, said Shamsul Alam, energy adviser at the Consumers Association of Bangladesh (Cab).

'No hike' means Tk2,764cr in monthly subsidy

If the government had followed the automatic pricing formula to set fuel prices in April, following the rise in international market rates after the Iran war, the price of diesel would have been Tk155.46 per litre, octane Tk148.93, and petrol Tk144.93.

Following the conditions of a loan taken from the International Monetary Fund in 2023, the government began adjusting prices monthly through an automatic system from the following year. However, the government did not increase fuel prices on 31 March.

Under the method, the current month's price is determined by the average "Platts-based" market price from the 21st of the month before last to the 20th of the following month. This formula is used to set the prices for diesel and octane, while the price of petrol is always fixed at Tk4 less than that of octane.

According to a briefing by the energy ministry prepared ahead of the latest price hike on 18 April, the government had been providing subsidies of nearly Tk45 per litre for diesel and Tk29 per litre for octane prior to the adjustment.

Energy Division estimates suggest that following the rise in international market prices after the Iran war, the government would have had to provide Tk2,764 crore in subsidies every month based on average demand if domestic prices remained unchanged. Of this amount, Tk2,452 crore would have been allocated to diesel and Tk145 crore to octane, with the remainder subsidising petrol and kerosene.

However, as a result of the government's decision to increase fuel prices on 18 April, the monthly subsidy burden will be reduced by approximately Tk800 crore. This means that even after the price hike, the government will still provide nearly Tk2,000 crore in fuel subsidies each month.

Despite the subsidy for octane being significantly lower than the vast amount spent on diesel, the Energy Division justified the steeper price increase for octane as a means of ensuring social and economic balance.

The ministry noted that diesel is directly linked to agricultural activities, the transport sector, freight movement, manufacturing, and the livelihoods of the general public. In contrast, octane consumption is relatively limited and primarily concentrated among higher-income groups.

Therefore, when adjusting prices, the Energy Division considered it a logical and policy-acceptable approach to place a comparatively lower burden on diesel while implementing a higher adjustment for octane, given the potential impact on public life and overall economic activity.

There are options

In the wake of the Iran war and the subsequent rise in fuel prices, several countries across Europe and Asia have attempted to keep prices manageable by reducing fuel duties. Pakistan, a fellow South Asian nation, has also slashed taxes on fuel. However, as Bangladesh has opted not to follow suit, consumers are forced to purchase fuel at much higher prices.

Selim Raihan said that the immediate hike in transport fares and commodity prices following the adjustment of fuel prices has had a direct impact on the general public.

He continued, "A portion of the revenue from fuel sales is transferred by the Bangladesh Petroleum Corporation (BPC) into their development fund, money essentially collected from the consumers. Temporarily suspending these transfers could have mitigated some of the pressure from the price hike.

"Similarly, while the commission rate for petrol pump owners remains unchanged, their total commission has increased significantly due to the higher sales value; a cap or adjustment could have been introduced here. Furthermore, a temporary waiver in the tax structure, similar to measures taken by neighbouring countries, could have been considered.

"In my view, by considering these three steps together – reducing taxes, pausing transfers to the BPC development fund, and implementing effective controls on commissions – the government could have achieved a more tolerable price adjustment.

"While this might have placed some pressure on revenue management, it would have lessened the direct impact on ordinary citizens. In the current situation, a transparent and balanced pricing policy is essential, prioritising consumer interests while moving towards long-term sustainable solutions."

Shamsul Alam, Cab's energy adviser, said reducing VAT and taxes on fuel is an accepted global practice to stabilise markets, cushion the impact of price spirals, and provide relief to consumers.

"Despite rising global oil price, our actual import costs remain significantly lower than what is being presented by the government," he pointed out.

At a time when the government is struggling to ensure adequate fuel supply to meet demand, such pricing policies effectively deprive citizens of their right to fair pricing, he believed.

Treating the fuel sector primarily as a profit-making entity reflects a disregard for the hardships faced by consumers, Shamsul said.

Bangladesh is not unique to global shocks, but it lags behind regional countries in managing the crisis judiciously, analysts say.

Cab Vice-President SM Nazer Hossain said the government, instead of raising fuel prices amid consumers' hardship, could have temporarily exempted duties.

"Though Bangladesh's recent fuel price change is a response to global pressures, the policy choices have raised some valid concerns," said Fahmida Khatun, executive director, Centre for Policy Dialogue.

The economist referred to the immediate effects of oil price hikes translated into increased transportation costs, hitting low- and middle-income households hardest.

Instead, she said, the government could have taken some practical steps to reduce the impact of rising fuel prices. "For example, the government could have temporarily reduced fuel taxes, restrained dealer commissions for now, and avoided tapping into the Bangladesh Petroleum Corporation development fund unless absolutely essential."

While these actions would not eliminate the price hike completely, they could have relieved the burden on ordinary people, Fahmida added.

Understandably, she said, the government's limited fiscal capacity means it cannot afford large subsidies for long. "But the adjustment could have been managed more carefully, with the burden shared more fairly across stakeholders, which would also improve public confidence."

There should be a balanced approach in light of high inflation and the hardships faced by common people, Fahmida said, suggesting that targeted support for the poor should be provided through fiscal adjustments and improved energy-sector efficiency.

How countries are responding to oil shocks

Regional economies such as India and Pakistan opted to lower fuel taxes to keep pressure on people lower. Excepting marginal increase in premium-grade fuel – Rs2 per litre, India remains among a few countries like Madagascar that have not hiked fuel prices since the Middle East war began. Pump prices of petrol and diesel in India remain at levels seen four years ago.

Rather, in March, ahead of elections in some states, India's finance ministry reduced the excise duty on petrol from Rs13 to Rs3 per litre. Similarly, the duty on diesel was slashed from Rs10 to zero.

It is unofficially estimated that this decision could result in an annual revenue loss of approximately Rs1.55 trillion.

Indian Oil Minister Hardeep Singh Puri wrote on X that oil companies were facing losses of around Rs24 per litre on petrol and Rs30 on diesel due to high prices in the international market. To mitigate those losses, the government has provided a significant waiver in revenue income, he said.

Reducing the duty at current prices will help decrease the annual losses of oil marketing companies by 30% to 40%, Puri said.

On the other hand, to limit exports and support the exporting companies, which include the private firms, the Indian finance ministry earlier this month increased the tax on diesel exports to Rs55.5 per ⁠litre from Rs21.5 per litre.

Though the world's third-largest fuel oil importer, India also exports refined oil to a number of countries, including Bangladesh. The export tax hike will affect Bangladesh's diesel import from India through the pipeline.

Pakistan raised domestic fuel oil prices much earlier than Bangladesh, but drastically slashed the petroleum levy to zero for diesel. The tax cut brought down the petrol price by Rs80 per litre.

Apart from adjusting fuel prices, Pakistan introduced free bus services in major cities and targeted subsidies for bikers, farmers and transport operators to cushion the public from the 55% hike in oil prices.

Registered motorcyclists in Sindh will get Rs2,000 each a month – the equivalent of a Rs100 subsidy per litre for 20 litres of fuel.

Farmers will receive Rs1,500 per acre to cover diesel costs, while heavy transport operators will receive fixed subsidies on the condition that bus and truck fares are not increased.

Registered bus and truck owners in Punjab will receive up to Rs1,00,000 in subsidies to prevent them from passing the increased fuel costs on to passengers and consumers.

The National Board of Revenue (NBR) plans to introduce a QR code system on packaged products sold in the market to curb value-added tax (VAT) evasion and improve tax compliance.

NBR Chairman Abdur Rahman Khan announced the plan during a pre-budget meeting at the organisation's headquarters in Agargaon today (26 April).

"At the initial stage, we plan to start with tobacco products. Later, it will be implemented for all packaged goods such as soap, shampoo, bottled water, and sugary items," he said.

He said the new system was intended to strengthen monitoring and reduce tax evasion in the retail market.

The NBR chairman also said individuals who provide information on tax evasion or misconduct would be rewarded.

"Those found evading taxes will face fines," he said.

Representatives of several business bodies, including BGMEA and BTMA, attended the meeting.

The success in accountancy and finance careers in future will depend on adaptability, continuous learning, and the ability to combine technical expertise with human-centred skills, experts have said.

The future of work is undeniably uncertain, but it is teeming with opportunity for those willing to adapt, they said in a roundtable discussion held at The Business Standard conference room yesterday.

Titled "Finance and Accountancy Career Paths Reimagined – The Changing World of Work", the discussion was organised by ACCA Bangladesh, moderated by TBS Senior Executive Editor Sharier Khan.

Clive Webb, head of Business Management at ACCA Global, presenting the keynote, said there has been a fundamental change in career structures driven by the interconnected forces of demography, climate change, and technology.

He suggested that the role of the profession is shifting from being the "owner of knowledge" to the "provider of trust and integrity".

Webb described a transition from a traditional "pyramid" organisational structure to a "diamond" model, where fewer entry-level roles exist and the focus shifts to interpretation, human verification, and value-driven insight.

In his presentation, he further said the future of work in accountancy and finance is dynamic, uncertain, and full of opportunity.

"Success will depend on adaptability, continuous learning, and the ability to combine technical expertise with human-centric skills. By embracing flexibility and aligning with emerging trends – technology, sustainability, and purpose – professionals can thrive in a world where career paths are reimagined and accountancy is redefined," he said.

Prawma Tapashi Khan, country manager at ACCA Bangladesh, said that while concerns about job cuts due to AI are valid, the reality is that many new roles will emerge as the nature of work is redefined.

She added that technology itself will not replace human professionals, but those who fail to utilise technology effectively will be replaced by those who do.

Sajjad Hossain Bhuiyan, chairman of the Financial Reporting Council (FRC) Bangladesh, revealed that while 150,000 companies are registered with the RJSCF, only 35,000 submit tax returns. He challenged the accounting community to locate these missing 115,000 entities and bring them into the formal fold.

The FRC chairman addressed the need for a professional Valuation Code and the formal recognition of ACCA graduates under the Financial Reporting Act, acknowledging that their international expertise is vital for better economic governance.

ASM Amanullah, vice-chancellor of National University, Bangladesh, pointed out a stark disconnect: the country produces 10 lakh graduates annually, yet 3 lakh stay unemployed.

He attributed this to a lack of industry-academia linkage. To address this, the National University has launched 26 reform initiatives, including an MoU with ACCA to integrate professional certifications into the curriculum.

He advocated increasing education spending to 3% of GDP, stressing that a one-dollar investment in human development today can yield a 300% return within a decade.

Professor Tapan Mahmud, head of Business Administration in Accounting and Information Systems at the Bangladesh University of Professionals, said modern "outcome-based education" must be more than a paperwork exercise for accreditation.

He warned that over-reliance on digital tools is eroding students' decision-making abilities, urging a return to "dialogic teaching" that develops the capacity to handle complex and ambiguous scenarios beyond number-crunching.

Shanshil Ahmed Shibly, technology director at Grameenphone, said the first wave of AI has already passed and the era of "Agent AI" has begun, with "Robotic AI" expected to handle basic tasks by 2028.

He added companies are transforming workforces not just for profit but for survival, and that data sovereignty must be a national priority.

Imam Al Razi, director at Monstarlab Enterprise Solutions, said the challenge often lies in the mindset of business owners who fear automation or lack the capacity to implement ERP systems. He called on universities to introduce these technologies early so students remain relevant in a world where repetitive tasks are rapidly being transferred to AI.

Tanaka Islam, head of HR at Maersk (Bangladesh and Sri Lanka), observed that the era of preferring select institutions is over, with focus now firmly on mindset and self-awareness.

She urged academics to move beyond ceremonial collaborations and engage in meaningful mentorship that prepares students for the corporate environment.

Seezan M Choudhury, partner at ACE Advisory, added that while managing "Gen Z" can be challenging due to their preference for flexibility over certainty, they also present an opportunity.

He suggested that AI-driven automation at the "bottom of the pyramid" allows mid-level managers to produce high-quality reports that previously required large technical teams, enabling Bangladesh to "leapfrog" traditional accounting methods.

Jakir Hossain, group CFO at Asiatic 3Sixty, described the transition of finance leaders from "historians" to "architects" of business.

He shared how re-engineering a company's financing structure saved hundreds of crores, proving that strategic integration is more valuable than technical bookkeeping alone.

Snehasish Barua, managing director of SMAC Advisory Services, noted a critical shortage of forensic accountants – a field that accounts for eight out of ten client requests – and urged institutions to develop specialists in this high-demand area.

Mohsena Khanom Munna, founder of De Tempete, said accounting business process outsourcing (BPO) is a major export sector for Bangladesh but suffers from a gap in "job-ready" skills and the high cost of training interns who often leave for different time zones. She proposed embedding technical courses during university education.

Marzana F Chowdhury, managing director at RSM Bangladesh, said finance professionals must now act as "co-pilots" to management, using data insights to drive strategy rather than simply reporting the past.

Mohammod Rashedul Alam Chowdhury, financial management officer at the Asian Development Bank, stressed the need for specialised finance cadres in the public sector.

Sarwar Alam, executive partner at KZK Advisory, said Bangladesh's 78 lakh SMEs represent a vast job market if accountants can offer affordable, AI-assisted services.

Mohammad Rokibul Kabir, dean of the Faculty of Business and Entrepreneurship at Daffodil International University, showcased successful "Pathway to ACCA" programmes that allow students to work while studying.

Shah Waliul Manzoor, senior business development manager of ACCA Bangladesh, said a significant part of this journey involves the continuous evolution of qualifications.

He said integration of artificial intelligence into the curriculum by 2027 is a key part of ACCA's strategic direction, supported by research and "Professional Insights" resources.

Labio Bala, financial specialist at UNOPS, said that while degrees are essential, competency and the confidence to add value are the ultimate benchmarks.

He said participants agreed that by embracing flexibility and aligning with technology and sustainability trends, the reimagined finance professional will not only survive but lead the coming transformation, where career paths are defined by the ability to evolve.

Despite steady economic growth, Bangladesh’s tax system continues to underperform, with average annual revenue shortfalls reaching nearly Tk 59,000 crore over the past five years, according to the Policy Research Institute (PRI) of Bangladesh.

“Persistent shortfalls reached approximately 20 percent of the revised budget target, while tax revenue growth collapsed from 21 percent to just 2.2 percent,” the thinktank said, pointing to what it described as a “structural weakness in tax effort.”

PRI Research Director Bazlul Haque Khondker made the remarks during a presentation on the need to rationalise the supplementary duty (SD) and value-added tax (VAT) structure at the organisation’s office in Dhaka today.

He said low VAT productivity, despite relatively higher buoyancy, reflects deeper structural issues, including a narrow tax base and policy distortions.

The current system, he added, indicates significant untapped tax capacity.

He suggested that comprehensive base expansion and reforms could substantially improve revenue mobilisation.

Bangladesh has set an ambitious target to raise its tax-to-GDP ratio to around 15 percent by fiscal year 2034-35 (FY35), up from the current 6.7 percent.

To reach an interim target of 10.9 percent by FY30, the country will need to sustain an average annual revenue growth of about 17 percent over the five years from FY25.

According to PRI, achieving these targets will require a fundamental shift in tax policy rather than incremental adjustments.

“Reaching a 15 percent tax-to-GDP ratio will demand structural reform, not just base expansion or rate hikes,” the presentation noted.

According to the thinktank, Bangladesh’s tax structure is also expected to evolve, with direct taxes projected to grow faster than indirect taxes. It projects that direct tax revenue will expand at an average rate of 22 percent, compared to 12.9 percent for indirect taxes between FY25 and FY35.

Even so, indirect taxes, particularly VAT and SD, will continue to play a significant role, accounting for around 45 percent of total tax revenue by FY35.

PRI stressed that reforms must prioritise building a broader-based and properly structured VAT system, while gradually reducing reliance on supplementary duties.

“Simply raising SD rates on existing products will not close the revenue gap,” said Khondker, warning that excessively high rates risk triggering adverse behavioural responses, in line with the Laffer Curve effect, where higher taxes can ultimately lead to lower revenue collection.

Speaking as the chief guest at the event, Zakir Ahmed Khan, chairman of Palli Karma-Sahayak Foundation (PKSF), said Bangladesh’s tax potential could rise significantly with stronger enforcement and reduced leakages.

The proper implementation of existing laws could boost revenue by 30-40 percent, he estimated.

He further estimated that improving compliance alone could help the country reach a 15 percent tax-to-GDP ratio without raising rates, but cautioned against turning enforcement into “tax terrorism,” stressing the need for trust and voluntary compliance.

Khan also called for separating tax policy from administration within the National Board of Revenue (NBR) to improve efficiency and accountability, adding that stronger reforms and better analysis are key to unlocking revenue potential.

Bangladesh is facing a deepening structural revenue strain, with the National Board of Revenue (NBR) recording an average annual shortfall of nearly Tk59,000 crore over the past five fiscal years, according to the Policy Research Institute (PRI).

The observation was made by PRI Research Director Bazlul Haque Khondker while presenting findings on the need to rationalise the country's supplementary duty (SD) and value-added tax (VAT) structure at a discussion held at PRI's office in Dhaka on Saturday.

He said Bangladesh's growing dependence on high and complex indirect taxation is increasingly unsustainable for a transitioning economy.

Khondker noted that the country already imposes some of the highest indirect tax rates in the region, particularly on beverages, where the rate stands at 43.75%, compared to 40% in India and 30% in the Maldives.

He pointed to significant distortions within the tax structure, citing the wide gap between 250% tax on alcoholic beer and 55% on energy drinks. According to him, such disparities distort consumer behaviour, pushing demand toward lower-taxed products and ultimately weakening overall revenue efficiency.

The PRI also cautioned that frequent and unpredictable changes in tax policy are contributing to investor uncertainty. It said multinational companies are increasingly factoring Bangladesh's SD and VAT regime into their decisions on whether to remain in or exit the market.

To achieve the government's target of raising foreign direct investment (FDI) to 2.5% of GDP by 2030, the think tank stressed the need for what it described as "investor-grade tax certainty."

Against the backdrop of widening revenue gaps and a long-term goal of achieving a 15% tax-to-GDP ratio by 2035, PRI proposed a set of structural reforms.

These include, first, fixing the order of tax imposition by separating supplementary duty from the VAT base and applying it at a single point to prevent cascading effects.

Second, it recommended introducing specific health-based taxes, shifting away from price-based taxation toward levies determined by sugar or alcohol content, a move it said could significantly improve revenue from food and beverage products.

Third, PRI called for stronger data systems to support tax administration, including detailed, category-wise reporting of SD and VAT to enhance monitoring, enforcement, and policy design.

Most listed manufacturers faced pressure last year from high borrowing costs and weak demand, with many sectors reporting falling profits or losses.

Despite that, a small number of large companies maintained strong earnings.

Data compiled by Lion City Advisory show only four listed firms posted profits above Tk1,000 crore in 2025.

The four that cross Tk1,000cr profit mark

According to the analysis, multinational telecom operator Grameenphone recorded the highest profit among listed companies at Tk2,908 crore in 2025.

Square Pharmaceuticals ranked second with Tk2,594 crore in profit.

Power producer United Power Generation posted Tk1,097 crore in profit, while electronics and appliance maker Walton earned Tk1,095 crore.

Robi came close to the threshold, reporting a profit of Tk937 crore.

On the loss side, Bashundhara Paper Mills topped the list with a loss of Tk477 crore. Titas Gas followed with Tk450 crore, while Energypac posted a loss of Tk213 crore.

In 2024, four firms also crossed the Tk1,000 crore profit mark, again led by Grameenphone at Tk3,630 crore, followed by Square, Walton and United Power Generation.

Titas Gas was the biggest loss-maker in 2024 with Tk1,502 crore in losses. Power Grid and Desco ranked next with losses of Tk449 crore and Tk316 crore, respectively.

Bangladesh Bank has appointed an administrator to Aviva Finance Limited to ensure uninterrupted operations of the non-bank financial institution.

According to an official order issued by the central bank yesterday, Hasan Tarek Khan, a director at the Financial Institutions and Markets Department of Bangladesh Bank, has been temporarily assigned as the administrator.

In his new role, he will exercise the powers and responsibilities of the managing director and chief executive officer of Aviva Finance Limited.

Khan will be relieved of his current duties at the end of the working day on April 27 to take up the new assignment, the order said, adding that the decision was approved by the competent authority.

Aviva Finance Limited, formerly Reliance Finance Limited, was rebranded in 2020 as a shariah-based non-bank financial institution. It offers a range of deposit and investment products, including specialised schemes such as Aviva Nafiha for women.

The central bank had earlier reconstituted the board of the institution following the political transition in August 2024, appointing an independent board to stabilise operations.

However, the company has been struggling due to the prolonged absence of a managing director and a high volume of non-performing loans, which have disrupted its normal business activities. Many customers have reportedly been unable to withdraw their funds, prompting occasional protests.

Allegations have also surfaced that a significant portion of loans was disbursed irregularly during the previous regime, including to entities linked to S Alam and PK Halder, making recovery difficult.

The company was renamed Aviva Finance after Halder’s departure, but it has yet to recover from its financial distress.

Stocks surged today (26 April), the first trading session of the week, as rising turnover and investor interest in select sector-specific shares lifted both indices and market activity.

DSEX, the broad index of the Dhaka Stock Exchange, advanced by 17.6 points to settle at 5,316 points as against 5,299 points in the previous trading session.

While DS30, the blue-chip index, surged 11 points to settle at 2,026 points and DSE's shariah index declined 1.44 points to 1,065 points, the DSE data showed.

Of the traded stocks, 157 scrips advanced, 172 or majority stocks price declined and 62 remained unchanged.

While the turnover soared by 11% to Tk982.42 crore, the data showed.

EBL Securities in its daily market commentary said the market began the week on a positive note, supported by selective accumulation in December-closing stocks on expectations of strong earnings, offsetting persistent concerns over momentum amid developments in Middle East ceasefire talks.

"Despite opening on a firm note, the market encountered sustained mid-session selling pressure; however, robust early buying support enabled indices to close in positive territory, while insurance stocks gained momentum on short-term, earnings-driven accumulation," it said.

On the sectoral front, General Insurance accounted for the highest share by 17.7% of turnover, followed by Engineering by 15.0% and Bank sector by 12.5% sectors.

Sectors mostly displayed mixed returns, out of which General Insurance, Life Insurance and Food exhibited the most positive returns.

Safko Spinning Mills topped the gainer chart as its shares price surged by 10%, the highest daily limit, to Tk19.8 each followed by Apex Tannery by 9.94% to Tk95.1 each, Purabi General Insurance by 9.84% to Tk27.9 each, Aziz Pipes by 9.82% to Tk55.9 each.

While on the losing side, International Leasing and Financial Services topped the loser list as its shares price declined by 8% to Tk2.3 each, followed by Peoples Leasing and Financial Services by 7.40% to Tk2.5 each, Regent Textile by 7.14% to Tk3.9 each, BD Finance by 6.45% to Tk11.6 each, and Rupali Bank by 6.18% to Tk18.2 each.

The port city bourse, CSE, also settled on a positive territory. The Selective Categories' Index (CSCX) and All Share Price Index (CASPI) declined by 35.4 points and 44.7 points, respectively.

The government’s development expenditure has fallen to its lowest level in at least five years in the first nine months of the current fiscal year 2025-26 (FY26).

Ministries and divisions spent only Tk 75,607 crore in the first nine months, just 36.19 percent of the total allocation under the Annual Development Programme (ADP), according to data released by the Implementation Monitoring and Evaluation Division (IMED) yesterday.

While broadly similar to the same period last year, the figure is significantly below the five-year average. In FY22, nine-month implementation stood at 45 percent, the highest in recent years.

The drop, both in terms of amount and execution rate, comes amid economic uncertainty and political transition midway through the fiscal year.

The situation is particularly acute in the health sector, which implemented only 21.6 percent of the July-March target, despite growing concerns about healthcare accessibility.

With only three months remaining, analysts say Bangladesh is likely to record another year of very low development budget implementation. This will likely impact revenue collection by the National Board of Revenue (NBR), which collects advance income tax and VAT from implementing authorities.

It may, however, help contain the budget deficit and limit government borrowing from the banking sector.

Development spending hit a historic low in FY25, with only 68 percent of the revised ADP implemented, the weakest performance since FY1976-77.

Execution this year may fall to around 60 percent, said Mohammad Lutfor Rahman, a professor of economics at Jahangirnagar University. Implementation rates typically rise in the fourth quarter, but the gains may not be enough to close the gap.

“The current pace of ADP implementation reflects both administrative hesitation and structural weaknesses in fiscal management,” he said.

Rahman attributed the slowdown to the country’s unusual administrative transition. Two governments were in office during the current fiscal year. Project officials under the interim government hesitated to spend allocated funds, fearing possible complications if a new government came in.

“Since it was not an elected government, there was less accountability. As a result, towards the end, the focus shifted mainly to elections, and development spending did not get due attention,” Rahman observed.

Officials at the planning ministry earlier said last year’s disruption followed the fall of the Awami League government in a mass uprising, which prompted many project directors to abandon their posts. The revised ADP for the current fiscal year totals Tk 208,935 crore.

Rahman cautioned that the shortfall would have wider economic implications.

“Most ADP projects are infrastructure-based, so delays affect people directly. Employment, especially for daily wage workers at the grassroots level, is also hit due to reduced project activity, creating a multiplier effect on the economy,” he said.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh (PRI), said overall ADP implementation is likely to remain subdued in the current fiscal year.

“Like last year, there were many disruptions in the current fiscal year, including the national election, political transition, as well as global turmoil,” he said, adding that these factors collectively slowed down development spending.

In line with Rahman, he also estimated that total implementation may ultimately stand at around 60-65 percent.

He cautioned about the broader fiscal implications of lower public expenditure. “Due to this lower government expenditure, revenue collection will also be affected.”

BRAC Bank posted a record consolidated profit of Tk2,250.94 crore in 2025 – the highest in its history – marking a staggering 57% year-on-year growth over the previous year.

With this profit, BRAC Bank became the first local private sector lender to surpass Tk2,000 crore in profit.

Riding on the profit growth, the private sector lender also increased its dividend payout, recommending a 30% dividend comprising 15% cash and 15% stock for its shareholders.

The lender approved the annual financial statements and dividend for shareholders at a board of directors meeting held this evening (26 April).

While on the standalone basis, net profit of BRAC Bank rose to Tk1,581 crore, marking a 30% increase from Tk1,214 crore in the previous year.

In 2024, BRAC Bank made a consolidated profit of Tk1,431.84 crore, registering 73% growth over 2023, and it had paid a 25% dividend – 12.50% cash and 12.50% stock dividend to its shareholders.

It called the board of directors meeting on 11 June through the digital platform, and to identify its shareholders, the record date has been fixed on 17 May.

The net asset value per share on the consolidated basis increased to Tk51.56 crore, up from Tk39.38 in the previous year.

Commenting on 2025 financials, Tareq Refat Ullah Khan, managing director and CEO of BRAC Bank said, "As a values-driven institution, BRAC Bank upholds strong governance and sound fundamentals regardless of market conditions. This disciplined approach has enabled consistent financial performance over the years, with profitability emerging as a natural outcome."

He said, This performance in 2025 reflects sustained customer trust, disciplined governance, and prudent portfolio management, despite a challenging operating environment. Our continued investment in digital platforms and customer-centric innovation has further strengthened revenue growth and market reach.

He also said, robust underwriting standards and vigilant risk monitoring have preserved asset quality, keeping non-performing loans among the lowest in the industry. Consistent delivery over the years has reinforced BRAC Bank's standing as a benchmark for governance, compliance, and values-driven banking in Bangladesh.

"Notably, a significant share of the Bank's profit goes to BRAC, the world's largest NGO, which channels these funds into impactful social initiatives – thereby reinforcing the bank's contribution to socio-economic development of Bangladesh," he said.

There are serious lapses in policies aimed at expanding the tax net, resulting in persistently low revenue collection and a weak tax-GDP ratio over many years. Numerous ad hoc measures have been introduced, but outcomes have fallen short of expectations. A striking example is the limited and ineffective taxation of medium and small business houses, traders and business establishments, excluding large corporates. Together, these may be termed SMEs.

Lack of transparency and accountability, weak financial reporting, inefficient tax administration and widespread corruption are the principal causes. Over the past two decades, the trade sector in metropolitan cities, district towns, upazilas and growth centres has expanded significantly. Per capita income has also risen, visible in improved living standards, especially outside major cities. Yet these trends are not reflected in tax collections.

Most SMEs do not maintain proper accounts or ensure transparent reporting. Taxes are often based on fixed sums or manipulated accounts, and the amounts paid are negligible. In many cases, liabilities are determined through informal negotiations between taxpayers and officials, sometimes facilitated by unethical consultants.

The question, then, is how to break this cycle in both the short and long term. There appears to be little research or structured policy work on this issue. Although there are four categories of return forms in the current system, there is no prescribed form tailored specifically to SMEs.

An SME tax return form should be distinct, incorporating key information such as annual turnover; purchases from recognised supply chains, producers and distributors; rental expenses; salaries and wages; electricity bills; city corporation and municipal taxes; total floor area of business premises, including warehouses; bank statements; and VAT returns where applicable. The status and lifestyle of owners and their family members are also relevant. Assets and properties declared in individual tax returns should be cross-checked against SME disclosures. A proper analysis of such data would provide a clear picture of business scale and performance.

As an initial step, where annual income exceeds a threshold, say Tk 1 crore, accounts, except for limited companies, should be prepared with the support and attestation of qualified accounting experts, not necessarily chartered accountants. In line with global practice, the Financial Reporting Council (FRC) and the National Board of Revenue (NBR) could determine eligible qualifications, including part-qualified CAs, CMAs and ACCAs. This would improve the quality of financial reporting among SMEs and strengthen revenue collection.

Based on these enhanced returns, income tax should be assessed using progressive slabs. Where reliable accounts are absent, minimum tax may be determined using objective indicators such as electricity consumption, a proportion of salaries and wages, recorded purchases and other reasonable yardsticks. Introduced initially as a pilot, this system could be refined and expanded over time. Digitalisation of accounting records is no longer costly. Many SMEs already use software to record transactions, yet such data often remain undisclosed when tax liabilities are assessed.

Some may argue that revenue from SMEs would not significantly affect overall collections compared with large corporates. However, beyond immediate revenue gains, a broader cultural shift is needed. Public apathy towards tax compliance must change.

No society or economy can develop without transparency, accountability and proper disclosure of business results, alongside meaningful participation by financially solvent citizens. Curbing corruption, if not eliminating it, must also be a priority. These reforms are essential if Bangladesh is to confront mounting economic challenges at a time when the global economy faces prolonged uncertainty.

Dominage Steel Building Systems (DSBSL) has decided to sell 30 percent of its shares to a buyer group led by Akij Resources.

DSBSL board approved the transfer of 3.07 crore shares at a negotiated price through an off-market transaction at its meeting on April 25.

A sale agreement will be executed with the buyers -- Akij Resources, Sheikh Jasim Uddin, and Faria Hossain -- pending approval from the Bangladesh Securities and Exchange Commission (BSEC), according to a disclosure issued on the Dhaka Stock Exchange (DSE) website yesterday.

Upon receiving BSEC clearance, a new board of directors will assume management and operations of DSBSL.

The existing board said the acquisition would help the company fully resume and optimise production, citing recent operational challenges.

It added that the synergy with Akij’s existing steel infrastructure would create long-term value for shareholders.

Akij Resources holds a significant presence in the steel and construction sectors through its subsidiaries. Officially established in April 2020, it builds on the heritage of the Akij Group, one of Bangladesh’s largest conglomerates.

DSBSL, established in 2007 as a private limited company, manufactures pre-engineered steel buildings.

The company operates two factories, at Fulbaria, Palash, Narsingdi and at Aukpara, Ashulia, Savar, with a combined monthly production capacity of 550 tonnes. It sources raw materials from manufacturers in Japan, China, and Taiwan.

As of March 31, 2026, sponsors and directors held 30.20 percent of shares, the public held 61.44 percent, and the rest were held by institutions and foreign investors.

The US central bank is widely expected to keep interest rates unchanged at its policy meeting next week, as energy prices stay high and supply chains snarled due to war in the Middle East.

The Federal Reserve’s two-day meeting, starting Tuesday, could be chairman Jerome Powell’s last at the helm of the independent institution.

But it takes place against a tricky backdrop. Powell’s successor has faced a bumpy road to confirmation, while policymakers battle competing pressures as steeper fuel prices drive inflation and job market worries linger.

Fed officials are set to keep rates steady at a range between 3.50 percent and 3.75 percent, extending their pause since the start of the year.

“We still have a very high level of uncertainty on what’s happening in the Middle East,” KPMG senior economist Kenneth Kim told AFP.

Oil and gasoline prices remain elevated even if they have peaked, meaning “there’s certainly an energy shock that’s still impacting both consumers and businesses,” he said.

The Fed has a dual mandate of maintaining price stability and low unemployment.

It tends to keep interest rates high to curb inflation or lower them to spur growth, meaning that current conditions pull officials in different directions.

Navy Federal Credit Union Chief Economist Heather Long expects Powell to be “non-committal” on the path of rates, as the full impact from the war on Iran remains unknown.

The oil price hikes came after US-Israeli strikes targeting Iran from February 28 sparked Tehran’s retaliation in virtually closing the Strait of Hormuz -- a key waterway for energy transit.

CONTAINING INFLATION

Fed officials will likely focus more on containing inflation than the jobs market this meeting, with the war entering its ninth week.

The strait is also a key passage for fertilizers, and disruptions threaten to hit food production.

Already, US consumer inflation reached its highest level in nearly two years in March at 3.3 percent as energy costs rocketed.

Fed Governor Christopher Waller, who earlier backed lower rates to support employment, indicated this month that a prolonged conflict could make it hard for the central bank to cut rates this year.

If there were high inflation and a weak labor market, one would have to balance risks on both sides.

This “may mean maintaining the policy rate at the current target range if the risks to inflation outweigh those to the labor market,” he told an Alabama event.

KPMG’s Kim said solid hiring recently “gives the Fed some cushion” to temporarily focus more on prices.

Analysts will monitor if the Fed signals in its post-meeting statement that rate hikes are a possibility.

‘CRITICAL JUNCTURE’

The Fed is also taking its next steps under intense political scrutiny.

President Donald Trump has made no secret of his wish for lower interest rates, and regularly slammed Powell for not cutting them aggressively.

Beyond rhetoric, Trump has sought to oust Fed Governor Lisa Cook over claims of mortgage fraud. The Supreme Court is set to rule on whether he can fire her.

Meanwhile, Trump’s choice of new Fed chairman -- Kevin Warsh -- has faced a bumpy road to confirmation.

Republican senator Thom Tillis on the Senate Banking Committee vowed to block Fed appointments until a Justice Department probe into the Fed and Powell is resolved, setting up a potential impasse on the panel Warsh needs to clear.

But the Department of Justice said Friday it would drop the investigation linked to renovation costs overruns, potentially paving the way for Warsh’s ascendance.

Asked by journalists Saturday about the DOJ’s move, Trump said he still wants to look into the cost of the Federal Reserve building renovations, which he has claimed is too high.

“I tell you, I want to find out. I have an obligation to find out,” he said.

Warsh has repeatedly pledged to remain independent if confirmed.

“We’re at a critical juncture for the Fed,” EY-Parthenon chief economist Gregory Daco told AFP.

“It may be that under Warsh, we’re going to see less Fed transparency, less Fed communication than we had in the past,” he said, referring to Warsh’s confirmation hearing testimony.

Powell’s chairman term expires May 15, and he originally intended to stay on the Fed’s board of governors until the probe on him is completed.

All eyes are on his future plans at his scheduled press briefing Wednesday.

A quiet but fast-moving shift is underway on Bangladesh's roads as electric bikes and e-scooters emerge as a new growth industry, drawing over Tk2,000 crore in fresh investments and rapidly rising consumer demand.

What began as a niche market just a few years ago is now drawing significant investment from some of the country's largest conglomerates, including Nasir Group, Walton, PRAN-RFL Group, Runner Automobiles and Akij Group.

Driven by high fuel prices, rising urban living costs, traffic congestion and growing demand for cleaner transport, e-bikes are increasingly becoming a practical choice for commuters and a serious business opportunity for manufacturers.

Industry insiders estimate that at least five major companies made fresh investments in the sector over the past year alone, with ongoing commitments exceeding Tk2,000 crore.

At the same time, imports have surged sharply, highlighting how rapidly consumer demand is building. Just three years ago, monthly e-bike sales in Bangladesh were negligible, hovering around 100 units. Today, monthly sales have climbed into the thousands.

National Board of Revenue data show imports of e-bikes quadrupled within three years. Imports rose from 2,446 units in FY23 to 10,053 units in FY25. However, industry players say the actual market is significantly larger.

Subail bin Alam, chief operating officer of Nasir Syntax Motors Ltd, said NBR import data do not fully capture the market because a large volume of CKD kits entered Bangladesh in 2025 and many of those shipments are not reflected in the headline numbers.

"If those are added, the actual figure would be several times higher, with hundreds of e-bikes now being sold every day," he added.

He said the market received a major boost after the government reduced taxes on imported electric two-wheelers and parts in 2024. Currently, completely built-up unit imports face 98.87% tax, while CKD imports are taxed at around 37%, making local assembly increasingly attractive. For fuel-based motorcycles, the rates are 125% and 90%, respectively.

This shift has encouraged multiple firms to enter the market or expand operations.

Subail added that while fuel-based motorcycles cost around Tk3-4 per kilometre to operate, e-bikes cost only 30-40 paisa per kilometre, making them highly cost-effective for daily users.

"A battery costing Tk30,000-35,000 can last around three years. Over the same period, maintenance costs for petrol bikes are much higher. That is why consumers are turning to e-bikes as an alternative."

Major players scale up investments

Among the newest major entrants is Nasir Group, which has already invested Tk300 crore in the sector.

The company launched five models in November 2025, two with graphene batteries and three with lithium batteries, and has already built showrooms in 40 districts as part of an aggressive expansion strategy.

Subail said Nasir Syntax Motors initially began producing around 70 bikes per day, but has built a factory with the capacity to scale several times higher depending on demand.

"Our target is to invest Tk500 crore in EVs," he said.

PRAN-RFL Group has also entered the race with its RYDO e-scooter brand. The company has invested around Tk200 crore, with production beginning in January this year at its Habiganj facility.

The plant currently produces around 500 units per month, with plans to scale up to 3,000 units monthly at full capacity.

RN Paul, managing director of RFL Group, said current duty structures remain a challenge because they raise retail prices.

He said the company is engaging with policymakers and aims to bring e-scooters to market at around Tk50,000 by 2027, subject to stronger policy support.

Walton, one of Bangladesh's largest electronics manufacturers, has already established an early lead. The company launched the country's first locally produced e-bike under the Takyon brand in 2022 and currently commands around 18% market share.

Its manufacturing ecosystem already includes assembly lines, plastic moulding, PCB SMT production for digital systems and battery management systems, as well as battery manufacturing facilities.

Touhidur Rahman Rad, chief business officer of Walton Digi-Tech Industries Ltd, said Walton plans a dedicated 1,20,000-square-foot e-bike factory with an annual production capacity of 20,000 units.

The project is expected to generate more than 1,500 jobs with an investment running into several hundred crore taka.

He said e-bikes can reduce household transport fuel costs by as much as 80%, allowing families to recover the cost of ownership within a relatively short period.

Runner, Akij intensify competition

Runner Automobiles, a long-established player in Bangladesh's motorcycle market, has also accelerated its EV strategy.

After entering motorcycle manufacturing in 2012 with over Tk500 crore in phased investment, Runner began assembling e-scooters in 2025 in partnership with China's Yadea.

It had already launched e-bikes under the eWave brand several years earlier.

Priced between Tk70,000 and Tk100,000, Runner's e-bikes have gained a strong foothold.

Runner Automobiles Chairman Hafizur Rahman said the company plans to move from assembly to full manufacturing at its Bhaluka factory in Mymensingh.

Meanwhile, Akij Motors entered the e-bike segment between 2020 and 2022 and now assembles seven models at its Gazipur facility.

The company is focusing on the premium segment, with most models priced above Tk1,00,000.

An Akij official said customer preferences are shifting towards better performance, durability and higher-quality vehicles.

Why consumers are switching

A petrol-powered motorcycle typically costs Tk2-3 per kilometre in fuel. An e-bike costs only Tk0.30-0.40 per kilometre.

There is no engine oil, lower servicing costs, and monthly charging expenses can be as low as Tk300-500.

Nawshad Alam, an HR official at BRAC Bank, recently bought a Jiho A8 SE electric scooter for Tk2,20,000.

The lithium-powered scooter can travel 105–110 kilometres on a full charge.

"I bought an e-bike to avoid the hassle of fuel," he said.

"I no longer need to stand in petrol pump queues. I charge it at home. There is almost no fuel or servicing cost, and the company gave a three-year warranty."

He added that premium models are expensive, but entry-level bikes begin at around Tk50,000.

Md Mahmudur Rahman, general manager of RFL E-bike, said young professionals, especially women, are increasingly adopting e-bikes.

Their controlled speed makes them appear safer to many families, helping transform them from transport tools into lifestyle products.

He said countries such as India, China and Vietnam demonstrate the long-term potential of electric mobility.

Even families that already own cars or motorcycles are buying e-scooters for short urban trips because of their affordability and convenience, he added.

Md Matiur Rahman of Transsion Holdings said rising fuel prices and worsening congestion are steadily pushing consumers away from conventional motorcycles.

Import dependency

Despite growing local assembly, Bangladesh remains heavily reliant on imports.

Most units arrive fully built from China, while another 20-30% come in as SKD or CKD kits for local assembly. Foreign brands still dominate parts of the market.

Revoo, imported by Transsion Holdings since 2022, controls around 20% market share, offering high-performance models with ranges of up to 80 kilometres, swappable lithium batteries and NFC smart unlocking.

Chinese brands such as TailG, Salida, AIMA and Exploit also maintain strong positions.

Charging, registration still major barriers

Industry leaders say the sector's biggest growth constraints are inadequate charging infrastructure and cumbersome registration processes.

Bangladesh currently has only 112 public charging stations, concentrated in Dhaka and Chattogram, creating severe range anxiety outside major cities.

Subail of Nasir Syntax Motors said a rider who leaves home with a partial charge has few options if the battery runs out mid-journey.

"Fuel stations exist everywhere, but charging stations do not. The government still has no clear policy framework. This is a major barrier for EV adoption," he said.

Walton's Touhidur Rahman said demand is currently stronger in Khulna and Chattogram than in Dhaka in some cases, partly due to road-use patterns and infrastructure realities.

He said rapid expansion of fast-charging and battery-swapping stations would dramatically accelerate growth.

Md Moshiuzzan, director of corporate affairs at Nasir Syntax Motors, said e-bike registration costs range from Tk8,000 to Tk12,000.

He added that no dedicated BRTA desk exists for e-bike registration, forcing many buyers into lengthy procedures and leaving many vehicles unregistered.

Bangladesh's motorcycle market is now worth an estimated Tk7,000-8,000 crore, expanding at 16-17% annually.

Nearly 99% of motorcycles sold locally are now manufactured or assembled in Bangladesh, a transformation driven by supportive industrial policies.

If registration systems are simplified, charging infrastructure expanded and tax policies remain supportive, Bangladesh's e-bike market may soon become the next major success story in domestic manufacturing and urban mobility, stakeholders say.