The continuous devaluation of the Bangladeshi Taka against the US Dollar is increasing import costs. Business owners face difficulties opening letters of credit (LCs) due to restrictive import policies. Rising interest rates have made borrowing more expensive than ever before. In this context, the proposed budget for the 2024-25 fiscal year includes imposing tariffs on investments and capital machinery imports in economic zones. Additionally, the government plans to take substantial loans from domestic banks. These measures have already caused significant concern in the private sector.
Business owners argue that increased reliance on bank loans by the government could make it harder for the private sector to access credit, thus discouraging private investment. The proposed budget also suggests raising VAT and customs duties on various goods and services, potentially negatively impacting industrial investment.
The budget proposes ending duty exemptions on capital machinery imports in economic zones, imposing a 1% duty. Developers in these zones will also face a 1% duty on imported goods for development purposes. This move could discourage investments from both domestic and foreign entrepreneurs.
Furthermore, the government’s plan to take large loans from the private banking sector to cover the deficit may reduce opportunities for expansion or new investments. The proposed budget may place additional financial strain on businesses, which are already struggling with high interest rates and increased import costs.
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