Published: 12:35 AM, 16 May 2026
Stable Policies Key to Economic Progress
Amir Mohammed Khosru
The main driving force behind a country’s economic progress is investment. Without investment, no new industries are established, no employment opportunities are created, production does not increase, and in the long run, the foundation of the economy cannot become strong. Although Bangladesh has achieved significant progress over the past decade in infrastructure development, power generation, digital connectivity, and social indicators, various concerns regarding the investment climate still persist among local and foreign entrepreneurs. In particular, foreign investors have long been demanding a stable, predictable, and business-friendly policy environment.
Recently, various international business organizations, foreign chambers, and investment-related institutions have made several recommendations in budgetary and policy proposals, the central focus of which is policy continuity, simplification of the tax structure, expansion of digital transactions, and making the investment process easier. Behind these demands lies not only business interest, but also the overall dynamism of the country’s economy.
In Bangladesh, complex approval procedures, lack of clarity in the tax system, frequent policy changes, and bureaucratic delays still remain major challenges for investors. When an entrepreneur decides to establish a new industry, they consider not only the present situation but also future policy stability. This is because investment in an industrial enterprise is generally long-term in nature. If today’s tax policy changes completely next year, or administrative complexities increase abnormally, investor confidence is undermined.
One of the major demands of foreign investors is ensuring policy continuity. They believe that sudden changes in tax rates, VAT structures, import policies, or foreign exchange management place investment plans in uncertainty. Particularly in developing economies where market potential is high, policy instability often limits opportunities.
The expansion of digital transactions is also now a necessity of the time. Without moving away from a cash-dependent economy, ensuring transparency and accountability becomes difficult. For this reason, proposals have been made to encourage cashless transactions through incentives. If mobile banking, QR codes, card payments, and online banking systems are made easier and more affordable, the cost of doing business will decrease, tax evasion will decline, and financial inclusion will increase.
At the same time, demands have also been raised to withdraw VAT imposed on SIM and e-SIM services. In the era of the digital economy, internet connectivity and mobile communication are no longer luxuries; they are now fundamental infrastructure for economic activities. High taxes increase the cost of technology usage, which becomes an obstacle for small entrepreneurs, freelancers, and young technology-driven businesspeople. To build a Digital Bangladesh, it is essential to keep the tax burden on technology services at a reasonable level.
The complexity of the tax system is another major problem in Bangladesh’s investment environment. Businesspeople often complain that taxes are determined differently for similar types of institutions based on varying interpretations. This increases harassment and slows down business activities through lengthy legal procedures. Therefore, simplification of tax policies and adoption of automated systems are necessary. Online-based tax returns, automated audits, and a harassment-free tax administration can play an important role in creating an investment-friendly environment.
Realistic reforms are also needed in the area of personal income tax. In the context of high inflation and rising living costs, the demand to reconsider the tax-free income threshold is not unreasonable. If the excessive tax burden on the middle class is reduced, their consumer spending will increase, which will further strengthen the domestic market. Similarly, providing tax benefits for savings certificates, the stock market, and long-term investments will facilitate domestic capital formation.
On the other hand, tax incentives alone are not enough to attract foreign investment. Investors place the highest importance on infrastructure, energy security, rule of law, and policy transparency. Uncertainty in electricity and gas supply disrupts production, increases costs, and weakens export competitiveness. As a result, investors tend to shift toward alternative markets. If Bangladesh wants to establish itself as a regional manufacturing and export hub, uninterrupted energy supply must be ensured.
Implementing an effective one-stop service is also extremely important for improving the investment climate. Although many services are supposed to be available from a single platform on paper, in reality entrepreneurs still have to move from one office to another. This bureaucratic complexity not only wastes time but also increases business costs. If a truly digital and effective one-stop service is introduced, the investment process will become much faster and more transparent.
Bangladesh now stands before an important opportunity. Global geopolitical changes, the restructuring of supply chains, and the growing tendency to seek alternatives to China as a manufacturing base have created new opportunities for South Asian countries. Vietnam, Indonesia, and India have already intensified policy reforms to take advantage of this opportunity. If Bangladesh can also implement timely reforms, attracting massive foreign investment will become possible.
However, it must be remembered that an investment-friendly environment is not only important for foreign investors; it is equally important for local entrepreneurs. Local businesspeople are the real foundation of an economy. If they lose confidence, foreign investors will also lose interest. Therefore, long-term planning, business-friendly administration, and regular dialogue with stakeholders are essential in policy-making.
To sustain economic growth, the most urgent need now is to create an environment of confidence. Stable policies, a transparent tax system, technology-friendly initiatives, and administrative efficiency—these four pillars will shape the future investment framework. Bangladesh is a land of potential, and to transform this potential into reality, a clear message must be conveyed to investors: policies do not change overnight here, entrepreneurs are treated as partners here, and long-term investment is safe here.
Amir Mohammed Khosru is a
banker and a columnist.
