B Mirror Report: Growing concerns over Bangladesh’s energy situation and industrial stability have led many foreign buyers to suspend or shift purchase orders to other countries, raising fears of a major setback for the country’s export-driven ready-made garment (RMG) sector.

Bangladesh Chamber of Industries (BCI) President Anwar-ul Alam Chowdhury (Parvez) said that a significant number of expected orders for July and August have already slowed down, with some buyers redirecting business to India and other competing markets.

He made the remarks during a pre-budget discussion held on Wednesday, warning that the sector one of the country’s key sources of foreign exchange could face a serious crisis in the coming months.

“Due to global market instability and internal challenges including energy shortages, many potential orders have stalled. Buyers are increasingly concerned about Bangladesh’s power situation and overall stability,” he said.

According to him, while local liaison offices of international brands are trying to manage the situation, top management abroad is becoming hesitant to place new orders in Bangladesh.

The BCI president also criticized the existing tax structure, calling it unrealistic for small and medium entrepreneurs. He said the mandatory minimum tax of 1 percent is becoming a heavy burden, especially for businesses running at a loss.

He further proposed that smaller entrepreneurs be brought under a structured tax slab system to ensure their survival, noting that many firms are forced to pay taxes even without profits.

Chowdhury also urged a reduction in withholding tax on export earnings, although the proposal was rejected by the National Board of Revenue (NBR) Chairman Abdur Rahman Khan.

Business leaders at the meeting also raised concerns over provisions in the Income Tax Act 2023 that grant wide powers to tax authorities, saying that the authority to seize company computers and documents during audits is creating anxiety among businesses.

Representatives from Dhaka Chamber of Commerce and Industry (DCCI) and other trade bodies also called for a reduction in tax burdens, including lower withholding tax on bank deposits and gradual withdrawal of surcharge, stressing the need for a more business-friendly tax environment.