SME Foundation seeks preferential tax regime for small businesses

The SME Foundation has called for a unified tax regime for micro, small and medium enterprises (MSMEs), saying that several government policies providing tax exemptions and incentives for the sector are not being adequately implemented.

This call came at a discussion on proposed budgetary measures for FY27 organised by the SME Foundation with the support of the Economic Reporters’ Forum (ERF) in Dhaka.

Khandakar Abdul Muktadir, minister for commerce, industries, textiles and jute, said that the government is prioritising the revitalisation of the SME sector to boost employment and accelerate economic growth.

To achieve this, the government aims to reduce the time required for business processes -- from starting a business to importing or exporting products -- from 355 days to just 14 days, while ensuring uninterrupted electricity supply to business establishments, he said.

In a presentation, Mohammad Jahangir Hossain, general manager of SME Foundation, said various government policies such as the National Industrial Policy 2022, National SME Policy 2026 (draft), National Tariff Policy 2023, and Export Policy 2024–2027 mention tax incentives to promote SMEs sector.

However, in practice, these policy benefits are not being properly implemented by the National Board of Revenue (NBR). Therefore, it is essential to ensure the effective provision of tax and duty benefits in line with these policies, he said.

He urged the NBR to consolidate tax incentives for SMEs mentioned in the policies along with the existing benefits under an integrated framework titled ‘Preferential Tax Regime for MSMEs’ under a rule.

“This would enable genuine small entrepreneurs to operate under a transparent, simple and long-term tax regime,” he said.

To support the development of the MSME sector, the foundation proposed increasing the Tk 2,000 crore allocation earmarked for fiscal year 2026-27 under a refinance scheme through which concessional loans are disbursed by three government agencies, including the SME Foundation.

As part of the government’s “One Village, One Product” initiative, an initial allocation of Tk 300 crore has been proposed for the development of the creative economy sector in fiscal year 2026-27.

The SME Foundation recommended that at least Tk 100 crore from this allocation be earmarked for the foundation.

It also suggested allocating at least Tk 5,000 crore specifically for the foundation.