B Mirror Report: The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has described the proposed national budget for FY2026-27 as generally “satisfactory” and “positive” for helping the crisis-hit economy recover, but identified the ambitious revenue collection target as its biggest challenge and concern.

In a post-budget reaction on Friday, BKMEA President Mohammad Hatem said the government has set a revenue collection target of Tk 695,000 crore against a Tk 938,000 crore budget, which would be difficult to achieve without significantly expanding the tax net.

“If the tax net cannot be widened substantially, the burden will likely fall on the existing taxpayers and tax-paying businesses,” he said.

BKMEA welcomed the budget’s measures on tax reforms and the facilitation of solar energy imports as an alternative amid the ongoing gas and power crisis. The association said the extension of tax benefits for solar power systems, mounting structures and related equipment is a positive step.

The association also praised the decision to retain existing incentives for export-oriented industries and extend policy support and incentives for three to five years, saying it would boost investor confidence.

According to BKMEA, allowing export-oriented non-bonded enterprises to import raw materials duty-free and procure them from domestic bonded entities would help increase exports. It added that effective implementation of support programmes for struggling and closed factories could revive industrial production and create new jobs.

Hatem also stressed the need for an effective mechanism to adjust or refund advance income tax deducted at source. Delays in tax refunds, he said, lock up businesses’ working capital, create liquidity shortages and increase dependence on bank borrowing.

He further questioned the practicality of imposing a 5 percent tax on polyester staple fibre imports, noting that the country’s sole producer meets less than 10 percent of domestic demand. He urged policymakers to ensure that efforts to protect local industries do not undermine the international competitiveness of the ready-made garment sector.

BKMEA also noted that the budget lacks adequate and specific measures to address the country’s gas and electricity shortages. Additionally, it said sustaining businesses with bank loans carrying 13-15 percent interest rates is not viable in the long term and remains a major obstacle to investment.