Aviation, tourism sectors seek reforms in FY27 budget

Stakeholders in Bangladesh's aviation and tourism sectors have called on the government to introduce policy reforms, tax incentives and infrastructure support in the upcoming fiscal year's budget, saying such measures are crucial to unlocking the full potential of the two sectors.

As the BNP-led government prepares to unveil its first national budget since taking office, industry leaders argue that aviation and tourism need more than increased allocations. They stress the importance of a comprehensive policy framework to transform the sectors into major drivers of economic growth, employment and foreign exchange earnings.

Aviation operators have urged the government to reduce taxes on jet fuel, aircraft leasing and airline operations to improve competitiveness and lower travel costs. Tourism leaders, meanwhile, have called for faster implementation of the National Tourism Master Plan and stronger incentives to attract private investment.

Industry representatives said the FY2026-27 budget would be a litmus test of the government's commitment to its pledge to develop Bangladesh into a regional aviation hub and a globally competitive tourism destination by 2034.

The aviation sector continues to grapple with rising operational costs, particularly high fuel prices and taxes, according to industry leaders.

Mofizur Rahman, Secretary General of the Aviation Operators Association of Bangladesh (AOAB) and Managing Director of NOVOAIR, said a predictable and rational taxation policy on aviation fuel is essential to reducing operating costs and improving the competitiveness of local airlines.

"A stable tax structure on jet fuel would help airlines lower costs, stimulate passenger demand and strengthen their competitive position in the market," he said.

He also called for VAT exemptions on jet fuel, reduced taxation on aircraft leasing and maintenance services, and rationalisation of duties related to aviation operations.

Stakeholders further urged the government to ensure adequate funding for the operational launch of the Third Terminal at Hazrat Shahjalal International Airport.

Aviation analyst ATM Nazrul Islam said the focus should now shift from infrastructure development to operational readiness, including staff recruitment, training and security preparations.

"Constructing infrastructure is only the first step. Efficient operations will depend on skilled manpower and modern systems," he said.

Industry leaders also highlighted the need for continued investment in airport modernisation, cargo facilities, air navigation services and digital aviation systems to support Bangladesh's long-term aviation ambitions.

Tourism stakeholders stressed that effective implementation of existing plans should take precedence over announcing new projects.

They identified the National Tourism Master Plan as the sector's top priority and called for increased investment in tourism clusters, eco-tourism initiatives, community-based tourism and coastal tourism projects, including the Exclusive Tourist Zone at Sabrang in Cox's Bazar.

Mohammad Rafeuzzaman, President of the Tour Operators Association of Bangladesh (TOAB), urged the government to provide tax exemptions on tourism-related equipment, tourist vehicles and hospitality infrastructure to encourage greater private-sector participation.

He also proposed incentive packages for inbound tourism and the introduction of an electronic visa system to facilitate foreign tourist arrivals.

TOAB Director Dr Md Taslim Amin Shovon said tourism has historically received less policy attention despite its significant contribution to employment and economic activity.

"Tourism deserves greater policy focus and a larger share of development funding," he said, adding that effective leadership and implementation would be the key to the success of budget measures.

Toufiq Rahman, Secretary General of the PATA Bangladesh Chapter, emphasised the need for stronger coordination among government agencies, noting that tourism development depends on transport, infrastructure, security, environmental management, cultural promotion and foreign affairs.

Stakeholders said the success of the FY2026-27 budget would ultimately be measured not by the size of allocations but by its ability to deliver the policy reforms needed to drive sustainable growth in the aviation and tourism sectors.

They expressed optimism that the government's first budget would create an enabling environment capable of turning election pledges into tangible progress for both industries.