[🇧🇩] Budget for 2025- 2026

Saif · Mar 13, 2025

PRE-BUDGET DISCUSSION: Tax exemption will be phased out: NBR

National Board of Revenue chairman Abdur Rahman Khan said that the tax on taxpayers who had been enjoying the reduced rate will gradually increase...

www.newagebd.net

PRE-BUDGET DISCUSSION: Tax exemption will be phased out: NBR
Staff Correspondent 13 March, 2025, 22:29

New Age file photo

National Board of Revenue chairman Abdur Rahman Khan said that the tax on taxpayers who had been enjoying the reduced rate will gradually increase.

He also said that now was the time to expand the tax rate, and the NBR has to phase out the facilities of tax exemptions. ‘Everyone must pay tax’, he said.

He said this while speaking at the pre-budget discussion with several associations and trade bodies at the NBR office in the capital on Thursday.

Abdur Rahman Khan also said that the government was working to reduce the harassment of the taxpayers and make it fully automated.

‘We know that the main obstacle is the calculation, legal and rules related knowledge and so on. But if we can once make it fully automated, these issues will be abolished,’ he added.

He also urged the businesses to assist the government in expanding the tax net.

He revealed these while the trade bodies presented their budget proposal for the upcoming fiscal year 2025-26 national budget.

In their budget proposal, the Bangladesh Textile Mills Association urged the government to impose a ban on importing yarn through land ports.

They also urged reducing the source at tax to 0.5 per cent from the existing 1 per cent and the raw material supplying tax to 0.5 per cent from the existing 3 per cent.

They proposed a VAT exemption on waste-based recycled fiber production and supply for yarn manufacturers, reducing the current 15 per cent rate.

They also demanded abolishing the advance tax on importing equipment and other items, which is currently 3 per cent and 5 per cent, respectively.

BTMA urged the government to exempt VAT on importing ETP materials like membranes, blowers, etc.

They also proposed to include electric panels, solar systems, and photovoltaic cells as capital machinery and impose a uniform custom duty of 1 per cent.

Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association also demanded reducing source at tax to 0.5 per cent from the existing 1 per cent.

They also appealed for reducing the source tax on profit and interest in the companies’ savings and fixed accounts to 10 per cent from the existing 20 per cent.

They also sought the opportunity for the sister concerns to use the raw materials imported by the same group.

Bangladesh Terry Towel and Linen Manufacturers and Exporters Association urged the government to abolish the 31 per cent and 37 per cent tax in importing 10 and 20 count yarn respectively.

They also demanded reducing the tax at source of the terry towel and home textile sector to 0.5 per cent from the existing 1 per cent.

Bangladesh Plastic Goods Manufacturers and Exporters Association urged the government to reduce the import duty to 3 per cent from existing 5 per cent in importing 14 basic raw materials of the plastic sector.

Bangladesh Frozen Foods Exporters Association proposed reducing advance income tax to 0.25 per cent from the existing 1 per cent.

They also proposed exempting 10 per cent advance income tax on cash incentives.

The trade bodies urged the government to introduce bonded warehouse facilities for the manufacturers other than the readymade garment sector.

NBR chairman Abdur Rahman Khan hinted that his office was working to allow partial bonded warehouse facilities for the other sectors and hoped to announce this in the upcoming budget.

Saif · Mar 16, 2025

Revenue shortfall may soar to Tk 1.05t in FY25

Government revenue shortfall could soar to Tk 1.05 trillion at the end of this fiscal year even after factoring in the potential sources to boost collection, says the CPD about state of the outgoing fiscal while drawing next national budget's outlook. The Centre for Policy Dialogue (CPD) m

thefinancialexpress.com.bd

Revenue shortfall may soar to Tk 1.05t in FY25
CPD says about outgoing fiscal, draws next budget outlook
FE REPORT
Published :
Mar 17, 2025 00:01
Updated :
Mar 17, 2025 00:01

Government revenue shortfall could soar to Tk 1.05 trillion at the end of this fiscal year even after factoring in the potential sources to boost collection, says the CPD about state of the outgoing fiscal while drawing next national budget's outlook.

The Centre for Policy Dialogue (CPD) mentioned Sunday that the revenue collection grew by just 4.4 per cent between July and December in the financial year 2024-25.

"To meet this fiscal year's revenue target, collection needs to be increased by more than 55 per cent in the remaining period, which is virtually impossible even after considering all potential sources," CPD Executive Director Dr Fahmida Khatun told a media briefing on recommendations for the FY26 national budget of Bangladesh at its office in the capital.

She made several recommendations and observations regarding the fiscal and economic challenges. She emphasised the National Board of Revenue (NBR) must undergo modernisation, leveraging the latest technology, to establish a hassle-free tax system.

The CPD proposed raising the tax-free income threshold to Tk 400,000 from the current Tk 350,000 in the next budget, citing high inflation and the fact that many people are now withdrawing funds from savings to cover daily expenses.

Dr Khatun said the highest income-tax rate should be raised to 30 per cent from the existing 25 per cent.

She also expressed scepticism about the central bank's expectation of lowering inflation within this fiscal year, warning that multiple risks - including US President Donald Trump's tariff wars - could complicate economic stability.

The CPD suggests that income tax should be prioritised, while the dependence on indirect taxes, such as VAT, should be reduced. It proposes lowering the VAT rate to 10 per cent from the existing 15 per cent, which may help reduce tax evasion.

To support the growth of small and medium enterprises (SMEs), the think- tank recommends they be nurtured and granted bonded-warehouse facilities for raw-material imports.

About further dos in the next budget it also says bonded-warehouse licences should be issued for longer terms as the current short terms create unnecessary administrative burdens for businesses.

Responding to questions from journalists, CPD Distinguished Fellow Dr Mustafizur Rahman said food and other essential commodities used to be controlled by a very small number of importers in the past, creating monopolistic market conditions. "Now, the supply base has expanded, which is a positive sign for the food-supply chain."

However, he stresses careful management is a must in the upcoming Boro season to ensure proper supply of fertilisers and other essential inputs, which would help secure a bumper harvest.

Addressing concerns raised by some quarters about seeking an extension of the least-developed country (LDC) graduation timeframe, Dr Rahman said Bangladesh can no longer step back as it has already met all three graduation criteria.

He reminds that Europe and Canada have assured Bangladesh of continuing to offer the same trade facilities for three years after its formal graduation in November 2026.

Dr Rahman emphasises this is the right time to take bold steps to reform the revenue structure. He also notes the NBR recently split its policy and implementation wings, which had often created conflicts of interest earlier.

The CPD executive director called for redefining the definition of "company" under its latest act as the current one includes both profit and non-profit organisations, leading the NBR to impose taxes on the latter unfairly. She highlights that budget-financing pressure is mounting as the fiscal deficit surged more than fourfold in the first half of this fiscal year, surpassing Tk 295 billion.

The policy think-tank cautions that GDP growth may fall short even of its revised projection of 5.5 per cent as the economy expanded by only 1.8 per cent during the July-September quarter of this financial year.

It also observes that Bangladesh's net foreign assets have declined, primarily due to reduced budgetary support from international sources, while net domestic assets have surged as the central bank fed funds to the struggling banks.

The CPD stresses the upcoming LDC graduation would require significant tax rationalisation to comply with the World Trade Organisation (WTO) rules.

"We believe the next budget should prioritise LDC graduation," Dr Khatun notes.

She forewarns that Bangladesh would face higher export tariffs in Europe and American economies in the post-graduation era and need to adjust domestic tariff protection for local industries.

Foreign borrowing sources would become more expensive, forcing the government to rely more on domestic sources, particularly the banking sector, she predicts. The CPD says the banking sector could come under pressure to finance budget implementation. It recommends customs duties, which remain excessively high, be rationalised.

The think-tank also has proposed phasing out cash incentives for export earnings, including in the ready-made garment sector, and offering in-kind support to enhance competitiveness on the global market.

It proposed allocating funds for the families of those martyred in the 2024 July-August movement.

The CPD deplores that Bangladesh, particularly Dhaka, often makes headlines for air pollution and urges the government to address this issue in the next budget with proper allocations and measures.

It also stressed focus on renewable energy and tackling plastic pollution.

The think-tank points out that Bangladesh and India share 54 common rivers and emphasises the need for bilateral discussions on reducing plastic pollution as waste thrown in one country often ends up in the other through rivers.

Saif · Mar 17, 2025

Upcoming budget must prioritise ordinary people’s concerns

AMID growing income inequality, high unemployment rates and unprecedented food inflation, economists have rightly pointed out that the budget for the next financial year should prioritise the economic woes of the ordinary people. Economists in a pre-budget meeting with the finance adviser on...

www.newagebd.net

Upcoming budget must prioritise ordinary people’s concerns
18 March, 2025, 00:00

AMID growing income inequality, high unemployment rates and unprecedented food inflation, economists have rightly pointed out that the budget for the next financial year should prioritise the economic woes of the ordinary people. Economists in a pre-budget meeting with the finance adviser on March 16 urged the government to create an enabling investment environment to boost growth in the job market. The policy emphasis on job creation is more than justified given that the unemployment rate, according to the Bangladesh Bureau of Statistics, rose to 4.49 per cent in the July-September quarter of 2024 from 4.07 per cent a year earlier. Recently, a sharp increase in high-value accounts has also been reported, suggesting a concentration of wealth and a lack of investment opportunity. In July-December 2024, private sector credit flow saw a steady decline, indicating a stagnant business environment, which is concerning when the private sector employs about 90 per cent of the workforce. The government should therefore work towards creating an enabling investment environment to facilitate growth in the job market.

Economists have also asked the government to take measures for the expansion of the direct tax, reducing dependency on indirect tax to give people already suffering from the unprecedented inflation some relief. The heavy reliance on indirect taxes, such as VAT and customs duty, makes the current tax structure regressive and less effective in drawing income from higher-income individuals and businesses. In the past, the budgetary allocation for social safety net programmes has been insignificant. According to a recent World Bank report, Bangladesh spends 2 per cent of its gross domestic product on social protection, which includes social assistance, public service pensions and subsidies. With pension and other forms of social assistance being excluded, the amount that vulnerable people receive would be 1.5–1.7 per cent of the gross domestic product. It is widely reported how most of the social assistance programmes have limited coverage and do not often reach the target population. In this context, economists have urged the government to revisit the loopholes in the social safety net programmes so the past abuses of power and corruption are eliminated from the process and the benefits of such programs reach their intended population.

As the interim government is preparing the national budget for the upcoming financial year, it should consider bridging the income inequality as its priority policy goal and ensure that budget serves the interest of the people. In doing so, it must work towards creating an enabling investment environment to facilitate growth in the job market and reform its tax regime, which is largely dependent on indirect tax. The expansion of social safety net programmes also deserves equal policy attention.

Saif · Mar 18, 2025

Prudent budget planning is essential

CPD’s emphasis on macroeconomic stability amid LDC graduation concerns

www.thedailystar.net

Prudent budget planning is essential
CPD’s emphasis on macroeconomic stability amid LDC graduation concerns

VISUAL: STAR

In a number of pre-budget discussions in the capital on Sunday, economists rightly stressed the need for designing the national budget for the upcoming fiscal year in a way that prioritises macroeconomic stability. They also emphasised the need for tax policy revision and tariff reforms in line with the World Trade Organization (WTO) regulations to aid in Bangladesh's preparation for graduating from the Least Developed Country (LDC) bracket in November 2026. Given the the country's ongoing economic challenges, we believe these recommendations are timely and should be considered.

In its discussions, the Centre for Policy Dialogue (CPD) said targeted interventions are required to address the economic challenges, and these should be incorporated into the new budget to ensure fiscal prudence—maximising the use of our scarce resources. At the same time, as Bangladesh transitions into a developing economy, it must phase out direct export incentives to meet WTO standards and employ alternative WTO-compliant measures. Revision of agricultural trade policies, elimination of minimum import prices on certain goods, and adjustment of tariff structures to keep custom duties aligned with the bound tariff commitments that Bangladesh made under the WTO agreements are also necessary for maintaining compliance in the post-LDC graduation scenario. Ensuring WTO compliance is of utmost importance as Bangladesh is set to lose the perks and waivers that come with the LDC status. CPD also advised the government to plan for legal counselling, in-depth trade policy analysis, and proper dispute resolution mechanisms—steps essential for securing a favourable position in trade relations with other nations.

Targeted interventions are required to address the economic challenges, and these should be incorporated into the new budget to ensure fiscal prudence—maximising the use of our scarce resources. At the same time, as Bangladesh transitions into a developing economy, it must phase out direct export incentives to meet WTO standards and employ alternative WTO-compliant measures. Revision of agricultural trade policies, elimination of minimum import prices on certain goods, and adjustment of tariff structures to keep custom duties aligned with the bound tariff commitments that Bangladesh made under the WTO agreements are also necessary for maintaining compliance in the post-LDC graduation scenario.

Meanwhile, at another discussion with the government, the CPD chief suggested formulating strict legislation to prevent tax evasion, track wealthy tax dodgers, and increase revenue through direct taxation. Bangladesh has long had one of the lowest tax-GDP ratios in the world. It's high time this was corrected, and to do so, the authorities must ensure that all eligible taxpayers, including influential individuals, are held accountable. Moreover, the recent increase in VAT and supplementary duties should be reconsidered—something that we have also stressed for quite some time—as raising revenue through indirect taxes is placing undue burdens on ordinary and poor citizens already struggling with high inflation.

These are all recommendations worth serious consideration. As the next fiscal year is going to be a crucial one amid all the uncertainties caused by the July uprising, the national budget must reflect prudent and strategic thinking on the government's part. Long-term policies to address persistent and potential setbacks should be integrated into budget preparations to ensure Bangladesh is adequately prepared for the challenges that lie ahead.

Saif · Mar 19, 2025

Next budget to focus on curbing inflation

Finance Adviser Salehuddin Ahmed yesterday said the interim government will not incorporate any mega projects that cost billions of dollars in the next budget for FY2025-26.

www.thedailystar.net

Next budget to focus on curbing inflation
Finance adviser tells senor journos

Finance Adviser Salehuddin Ahmed yesterday said the interim government will not incorporate any mega projects that cost billions of dollars in the next budget for FY2025-26.

"We will not undertake monumental projects costing $10-$12 billion in the upcoming budget. Instead, we will take projects that create employment."

He made the remarks during a pre-budget meeting with editors and senior journalists from print, online, and electronic media held at his office at the Secretariat in the capital.

He said the next budget will be realistic and people-centric.

"We will not formulate a budget that an elected government would throw away," said the finance adviser, adding that the upcoming budget will mainly focus on controlling inflation, not driving economic growth.

Finance Secretary Khairuzzaman Mozumder expressed optimism that inflation could be brought down to 8 percent by June this year.

During the meeting, editors suggested several measures, including steps to control inflation, expanding the social safety net programmes, raising the tax-free income limit to at least Tk 5 lakh, and increasing allocations for health and education sectors.

The editors and senior journalists also mentioned various challenges faced by the media, including high taxes levied on the newspaper industry.

In response, the finance adviser assured them that challenges faced by newspapers, television, and online platforms would be taken into consideration in the budget.

The finance adviser emphasised that allowances under social safety net programmes would be increased, but the extent would depend on the availability of resources.

Financial Express Editor Shamsul Haque Zahid suggested that the interim government, which will present the budget in June, should formulate a budget that the next government can implement, especially considering the possibility of elections later this year.

He also recommended a realistic approach to budgeting given low revenue earnings.

Abdul Hai Shikdar, editor of Daily Jugantor, proposed increasing the tax-free income threshold above Tk 4 lakh.

Zakir Hossain, associate editor of Daily Samakal, said that the newspaper industry faces a total import tax of 31 percent on newsprint, and despite repeated requests over the years, no steps have been taken to reduce it.

He further said allowances in the government's social security programmes are very low, suggesting increasing the allowances to at least Tk 3,000 per month.

Shawkat Hossain, online editor at the daily Prothom Alo, emphasised that job creation should be a major focus of this budget.

He also suggested shortening the budget speech.

In response, the finance adviser agreed to reduce its length to 50-60 pages.

Mizanur Rahman, head of operations at The Daily Star, stressed the need to incorporate automation into the operations of the National Board of Revenue in the next budget to enhance its efficiency.

Mostafa Kamal, editor of Daily Khaborer Kagoj, and Syed Shahnewaz Karim, acting editor of Daily Shomoyer Alo, also spoke at the meeting.