[🇧🇩] Budget for 2025- 2026

[Saif]

Few measures may raise business costs, deter investment: ICAB

Chartered accountants on Wednesday raised concerns that several proposed fiscal measures in the FY26 budget may lead to higher costs for businesses and reduced private-sector investment, especially amid the ongoing economic uncertainties. At a press conference held at its office in the capital, th

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FY ’26 Post-budget reactions
Few measures may raise business costs, deter investment: ICAB
Rise in minimum tax main issue
FE REPORT
Published :
Jun 05, 2025 08:27
Updated :
Jun 05, 2025 08:27

Chartered accountants on Wednesday raised concerns that several proposed fiscal measures in the FY26 budget may lead to higher costs for businesses and reduced private-sector investment, especially amid the ongoing economic uncertainties.

At a press conference held at its office in the capital, the Institute of Chartered Accountants of Bangladesh (ICAB) said some measures show promise, especially those aiming at digitisation and administrative simplification, but others may raise the cost of doing business and deter private sector growth.

It urged the government to have a broader dialogue among policymakers, industry leaders, and financial professionals, saying it is essential to refine the budget for sustainable economic recovery and growth.

ICAB President Maria Howlader lauded a landmark inclusion in the budget - the government's recognition of women's unpaid household labour as a contributor to the gross domestic product (GDP) - which she described as a "major policy change".

She expressed concerns about the feasibility of achieving the revenue target without modernising the tax structure and expanding the tax net.

As for individual taxation, she criticised the minimal increase in the tax-free income limit - from Tk 3,50,000 to Tk 3,75,000 - and the rise in minimum tax for marginal taxpayers from Tk 3,000 to Tk 5,000. She urged a higher tax-free threshold of Tk 4,50,000 to offer relief to low-income earners and emphasised the need for a more progressive and equitable tax regime.

Maria opposed the increase in turnover tax to 1 per cent, stating that taxing turnover instead of profit is inconsistent with a fair tax policy.

However, she welcomed other proposals to boost private investment and reduce business costs, including the removal or reduction of supplementary duties and tariffs on several products.

She also appreciated tax measures to rationalise the effective tax rate, including adjustments for bad debts as per IAS/IFRS standards, quarterly filing of withholding tax return, and reduced tax on brokerage commissions and merchant banks.

As for VAT and customs, she praised reduced advance tax on raw material imports and acceptance of ERP books for VAT purposes, while raising concerns about increased VAT on commercial goods and commissions from online sales.

She also expressed concerns over new regulatory duties on essential and healthcare items.

Commenting on macroeconomic risks, the ICAB president warned that borrowing from domestic sources - 12.25 per cent of the total budget - could fuel inflation, which already stands at over 9.17 per cent.

Snehasish Barua, partner at Snehasish Mahmud & Co, presented the keynote at the event.

He emphasised that inflationary pressures - driven by increased money supply and demand - require urgent containment, stressing the need for enhanced market monitoring and stable supply chains to prevent further price hikes.

Besides, he observed that due to the increase in minimum tax under Section 163 of the Income Tax Ordinance, even companies not making taxable profits will face higher tax burdens.

"For large firms with a substantial turnover, this would significantly increase the cost of doing business. For small businesses, more than 50 per cent of their profits may now go to the government, while loss-making companies could see their tax burden rise by 67 per cent." He said that companies listed on the stock exchanges but with less than 10 per cent of their shares floated through initial public offerings (IPOs) will be taxed at the higher rate of 27.5 per cent, equivalent to private companies.

Snehasish suggested the government extend the same condition to follow-on public offerings (FPOs) for consistency. He noted that Bangladesh already has the highest corporate tax rates among the peer countries, such as Vietnam, Indonesia, and Sri Lanka, for public and private limited companies as well as banking institutions.

"A logical and timely reduction in corporate tax is viewed as essential to encourage business activities and investment during this challenging period."

While reduced tax deducted at source (TDS) rates are expected to boost trading, he said, the increased minimum taxes - up by 67 per cent for companies and nearly 300 per cent for individual businesses - could hinder investment in new projects, ultimately affecting the GDP growth.

He advocated for a faster, digitised customs clearance system and urged the National Board of Revenue (NBR) to adopt international best practices, including easing conditions for participation in the authorised economic operator (AEO) programme to encourage self-compliance.

ICAB Chief Executive Officer Shubhashish Bose said the government refrained from increasing indirect taxes, aligning its policies with the World Trade Organisation (WTO) guidelines.

"Such measures are also part of the broader strategy to prepare for the country's LDC graduation."

He termed the budget a "preparatory blueprint" for Bangladesh's transition to a developing economy, with a focus on long-term sustainability, fiscal discipline, and global competitiveness.

Mohammed Humayun Kabir, vice president of the South Asian Federation of Accountants (SAFA) and past president of ICAB, moderated the discussion.​

 

[Saif]

Poverty spending shrinks in new budget

Despite mounting economic pressures on low-income households, the government has slashed the allocation for poverty reduction in the proposed national budget for FY2025-26, raising concerns among economists and development experts about the direction of fiscal priorities. The proposed budg

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Poverty spending shrinks in new budget
Economists warn of 'mistimed retreat' amid soaring inflation, sluggish growth

JAHIDUL ISLAM
Published :
Jun 12, 2025 01:10
Updated :
Jun 12, 2025 01:10

Despite mounting economic pressures on low-income households, the government has slashed the allocation for poverty reduction in the proposed national budget for FY2025-26, raising concerns among economists and development experts about the direction of fiscal priorities.

The proposed budget earmarks Tk 4.48 trillion for poverty reduction, down from Tk 4.61 trillion in the original budget for the outgoing fiscal year.

As a share of the total budget, poverty-focused spending has decreased from 57.9 per cent to 56.77 per cent, according to a Finance Division summary titled "Poverty Reducing Expenditure."

In absolute terms, this marks a nominal cut of Tk 129.94 billion in poverty-related allocations within a single fiscal year. The decline in budget share amounts to 1.13 percentage point year-on-year.

A longer-term view shows an even more concerning trend. The revised budget for FY 2023-24 allocated Tk 4.33 trillion-60.66 per cent of the total outlay-for poverty reduction.

Over just two years, the share of poverty-related spending has dropped by 3.89 percentage points, signaling what many see as a waning policy emphasis on poverty alleviation.

Economists warn that this shift comes at a particularly vulnerable time. With persistently high inflation, weak investment, and a slow recovery in employment, lower-income groups are under increasing stress.

Yet the new budget appears to reduce, rather than strengthen, the fiscal support aimed at them.

"It is disappointing that the announced budget, unveiled amid high inflation and a slowdown in investment and employment, has reduced rather than increased support for the poor-falling short of the rising demand for expanded benefits to protect vulnerable populations," said Dr Mustafa K. Mujeri, former Director General of the Bangladesh Institute of Development Studies (BIDS).

He expressed concern that much of the allocation may not reach its intended beneficiaries due to inefficiencies in targeting and implementation.

He emphasised the need for greater direct support for the poor through social safety nets, such as cash transfers and subsidised food distribution.

The national budget for FY 2025-26, proposed by Finance Advisor Dr Salehuddin Ahmed on June 2, includes Tk 3.01 trillion in direct poverty reduction spending, or 38.10 per cent of the total budget, and Tk 1.47 trillion (18.66 per cent) in indirect spending with potential poverty alleviation impact.

This marks a decline from last year's original budget, where direct and indirect poverty reduction shares stood at 38.88 per cent and 19.02 per cent respectively.

According to the Finance Division, Tk 2.84 trillion-or 53.06 per cent of the Tk 5.35 trillion operating budget-is considered poverty-reducing expenditure. An additional Tk 1.63 trillion, or 66.46 per cent of the Tk 2.46 trillion development budget, is similarly classified.

Budget documents reveal that the Ministry of Food will receive the largest poverty-focused share of its allocation, 98.01 per cent, followed by the Bridges Division (94.04 per cent) and the Statistics and Informatics Division (90.44 per cent).

Other high-ranking ministries include the Ministry of Disaster Management and Relief (88.43 per cent), Ministry of Railways (87.66 per cent), and Ministry of Primary and Mass Education (87.22 per cent).

On the other end of the spectrum, several government institutions show negligible or no poverty-focused allocations. The President's Office and the Office of the Comptroller and Auditor General received zero per cent, while the National Parliament received just 0.25 per cent.

Other low-ranking agencies include the Supreme Court of Bangladesh, Economic Relations Division, and the Anti-Corruption Commission.

Dr Selim Raihan, Professor of Economics at Dhaka University and Executive Director of the South Asian Network on Economic Modeling (SANEM), was more critical of the classification itself.

"Who is this report being made to satisfy?" he asked, calling the poverty-reduction label "arbitrary and ad hoc."

He argued that only well-targeted social protection programmes can be considered direct poverty reduction, while broader development investments-though important-should not be lumped together without clear methodological justification.

Raihan also pointed out that economic growth in recent years has not translated into proportionate income growth, and poverty levels have not declined as expected.

He warned that unless poverty spending is restructured and better targeted, the budget risks failing the very people it claims to support.​

 

[Saif]

In quest of a practical budget

The annual budget of the government is the most crucial fiscal event which has a bearing on the living conditions of all social groups. It is the main conduit of national resource mobilisation and management. Every year in June, the country receives its annual national budget for the upcoming

thefinancialexpress.com.bd

In quest of a practical budget

Asjadul Kibria
Published :
Jun 14, 2025 22:46
Updated :
Jun 14, 2025 22:46

The annual budget of the government is the most crucial fiscal event which has a bearing on the living conditions of all social groups. It is the main conduit of national resource mobilisation and management. Every year in June, the country receives its annual national budget for the upcoming fiscal year. After unveiling the budget by the man-in-change of national exchequer, different stakeholders scrutinise the various fiscal proposals placed in the budget. They also submit their suggestions and demands for the inclusion or exclusion of specific measures. Finally, the proposed budget receives approval from the parliament with or without some amendments. Thus, the proposed budget becomes the original budget.

Besides placing the budget proposal for the new fiscal year, the finance minister also declares a revised budget for the outgoing fiscal year. When the national parliament is operational in the country, he/she also presents a supplementary budget for the approval of the lawmakers.

The general trend in Bangladesh is to revise the proposed or original budget by reducing the original outlay. Ultimately, the size of the actual or implemented budget gets further reduced, mainly due to inefficiency in public spending, coupled with the wrong selection of development projects and inadequate mobilisation of resources. Budgetary decisions are primarily dependent on the availability of resources.

The government has been disclosing the status of the implemented or actual budget since FY09 in the budget document, specifically in the 'Budget in Brief.' This document provides a concise overview of the budget, including key figures and policy priorities. The practice brings some amount of transparency in the case of public spending disclosure and helps analysts and stakeholders get a more realistic picture of the budget.

In the first week of this month, the finance adviser to the interim government unveiled the national budget for the fiscal year 2025-26 (FY26). As there is no parliament in the country, Dr Salehuddin Ahmed, the finance adviser, delivered his budget speech via television and radio. Titled 'Building an Equitable and Sustainable Economic System', his speech nominally outlined the future direction of Bangladesh's economy.

Breaking the tradition of incremental budgets over the last five and a half decades, Salehuddin proposed an outlay of Tk 7.90 trillion for FY26, which is around one per cent lower than the original outlay of Tk 7.97 trillion for FY25. The proposed budget for the next fiscal year, however, is 6.20 per cent higher than the revised budget for the current fiscal year. Nevertheless, the modest increase over the revised budget is also a deviation from the long practice. For the last 15 years, since FY10, the proposed budget for the new fiscal year has shown a double-digit rise over the revised budget of the current fiscal year. Considering the high rate of inflation, the 6.20 per cent increase in the proposed FY26 budget over the revised FY25 budget is also not a hike, in real terms. The annual average rate of inflation stood at 10.13 per cent in May this year.

The reduced outlay of proposed public spending for the next fiscal year is a reflection of reality. During the last decade of the ousted Hasina regime, the annual average rate of hike in the proposed budget was 13.40 per cent. Most of the time, inflated outlay was proposed to widen the misappropriation and misuse of public money. The reduction in the proposed outlay for the next fiscal year could potentially lead to a more efficient allocation of resources, but it also raises concerns about the adequacy of funding for key sectors.

The finance adviser also delivered an abridged speech of around 7,000 words, whereas the original text contained around 17,000 words. The shortened version also helps viewers and listeners maintain their concentration.

Nevertheless, the unnecessary delay in making the budget documents public was a disturbing development, especially for analysts and the media. For many years, budget documents were made public when finance ministers began delivering their budget speeches. The practice is disrupted this time. The transmission started at 3:00 pm, and the finance ministry made the documents public after nearly an hour, without any apparent reason. The media personnel who gathered at the Ministry of Information to collect the budget documents also waited for an hour to obtain the documents. Despite repeated requests, the officials did not distribute the documents, quoting the official instruction to wait until the end of the speech. Over the years, journalists have been urging the government to announce the budget before noon. Regrettably, the Yunus-led interim government stuck to the previous timing of budget presentation.

True, the budget is not a panacea for all financial problems, though it is the most critical instrument of a government to manoeuvre public investment and development activities. In a democratic environment, the nature of the budget-making process should be more people-oriented, and policymakers should pay due attention to ensure that the expectations and aspirations of the people are reflected in the budget. According to some economists, public choice and democracy are interrelated, and the economic interpretation of democracy is that public wants and desires be entertained in the budget.

So, the budget process needs to be judged on the basis of (i) the constitutional obligations of the government, (ii) changes in the domestic political perspectives, and (iii) changes in the global economic environment. Like the previous finance ministers, the finance adviser also tried to comply with these three aspects.

Nevertheless, a budget is also not simply an annual financial statement of the government or a set of documents prepared by the bureaucrats, but rather a political tool which combines political decision-making with bureaucratic procedure. It is the numerical documentation of the government's political ideology, which is to be implemented through a suitable economic framework.

Over the last 16 years, it has been observed that the actual budget spending was, on average, 14 per cent lower than that of the original budget and 11 per cent lower than the revised budget, which is the budget that has been adjusted after the initial proposal to account for any changes or new information. Only the actual or implemented budget of FY11 was around 3 per cent and 1.5 per cent lower than the original and revised budgets of the year, respectively.

As the final implementation of the budget is generally lower than the proposed or revised outlay, it implies a structural weakness in the country's public expenditure system. This has led to some critical areas being deprived of due allocation or public investment, while some less important sectors are flooded with funds. The FY26 budget is a modest attempt to deviate from this trend. Its success, however, will depend significantly on the actions of the democratically elected government in the near future, underscoring the importance of their role in the budgeting process.​

 

[Saif]

Bangladesh's austerity budget at a challenging time

The Interim government presented its annual budget on June 2, with a total outlay of TK7.9 trillion which is 0.88 per cent lower than the outgoing budget, and a revenue target of TK5.64 trillion resulting in a budget deficit of TK 2.26 trillion. It is a trimmed budget relative to budgets presented

thefinancialexpress.com.bd

Bangladesh's austerity budget at a challenging time

Muhammad Mahmood
Published :
Jun 14, 2025 22:41
Updated :
Jun 14, 2025 22:41

The Interim government presented its annual budget on June 2, with a total outlay of TK7.9 trillion which is 0.88 per cent lower than the outgoing budget, and a revenue target of TK5.64 trillion resulting in a budget deficit of TK 2.26 trillion. It is a trimmed budget relative to budgets presented in previous years reflecting stark economic reality facing the country. The economy is facing a combination of slow growth, high inflation, and rising unemployment notwithstanding the impending political changeover.

Even after almost ten months in power, there remains a sense of unease about the future as to whether the interim government under the leadership Nobel Laureate Professor Mohammad Yunus can get the economy back on track while spearheading political reforms needed to rebuild a durable democratic system and prevent another dictator from emerging. The economic factor will ultimately be the key issue in determining the interim government's success. It is a monumental challenge.

The finance Advisor in defending his austere budget said the budget "is realistic, pragmatic and implementable' in the current economic context. Such a scaled down "responsible" budget most likely will receive positive nod from the IMF and the World Bank if not from the economically disadvantaged section of the population.

The measures to reduce the budget deficit have resulted in a decrease in annual development expenditure, set at Tk 2.3 trillion, which is a 13.2 per cent decline from the original allocation in the previous budget. The proposed fiscal deficit of TK1.25 trillion will further balloon the already accumulated public debt despite the austerity measures.

In 2024, Bangladesh's public debt was $181,008 million. This amount represented 40.13 per cent of Bangladesh's GDP. Bangladesh's debt per capita in 2024 was $1,056. The public debt is composed of domestic debt (56 per cent of total debt) and external debt (44 per cent). Bangladesh's Private debt and household debt debts stand at 36.92 per cent and 6.69 per cent respectively of GDP in 2025.

Now the debt/GDP ratio is also expected to rise further at the end of fiscal 2025-26. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the fiscal year. Interest payment will account for 22 per cent of total revenue budget or 15.5 per cent of total spending. Between 1979-80 and 2024-25, Bangladesh always ran budget deficits except for four years. It indicates the budget has a structural deficit problem rather than cyclical.

The debt/GDP ratio for Bangladesh is notably lower when compared to the United States at 125 per cent, the United Kingdom at 105 per cent, and Japan at 270 per cent. If output falls sharply and the deficit grows, the debt/GDP ratio for Bangladesh will further climb up. Only budget surplus or high economic growth can help reduce the debt/GDP ratio.

The government also increased subsidy spendings to deal with rising oil, gas and fertiliser prices amounting to 11.3 per cent of budget expenditure. In the present situation, continuous dependence on existing energy and food subsidies will restrict adjustments in domestic prices and hinder fiscal measures from promptly addressing any significant economic challenges that may emerge in the coming months or years. Therefore, it is imperative that the emergency economic support does not become deeply ingrained.

A structural deficit problem implies that even allowing cyclical fluctuations in the economy, current government spending is being financed by borrowing. With structural deficit, therefore, a deficit will be posted regardless of the strength of the economy. A structural deficit problem implies that borrowing will become increasingly unsustainable or more expensive. A structural deficit problem can lead to a rise in interest payments as a percentage of GDP which means increasing amount of tax revenue would be needed to make debt interest payments.

Only spending cuts or raising revenue or both are methods that can get rid of structural deficits. But neither of these methods are appealing to any government and that is why structural deficits continue to linger. More importantly, spending cuts and tax concessions combined can also create a challenge more existential than fiscal. Therefore, the government could reform the taxation regime to solve the structural deficit problem. The current budget does not address that issue significantly.

This budget further demonstrates that Bangladesh is trapped in highly bureaucratised budgetary system with deep structural impediments. A notable example is the longstanding budgetary practice that still provides opportunities to legalise laundered money. This budget is no different in this regard. There also appears to be an inability to reform the taxation system which remains a critical issue for a long time.

10.2 per cent of budget allocation went for the public administration up by 1 percentage point along with increased special benefits for public servants who are set to receive a "special benefit" of up to 15 per cent on their basic salary. It remains unclear what productivity gains were achieved by public servants that justified an increased allocation. Also, the public service in Bangladesh is not known for efficiency. In fact, the public service in Bangladesh is highly bloated, inefficient and also known to be corrupt.

The Budget has allocated Tk 89.2 trillion for subsidies. While energy remains the primary focus, subsidies allocated for fertiliser, mechanisation, and food assistance remain in place as before. Continued reliance on existing energy and food subsidies will constrain adjustments in domestic prices, subsequently limiting the effectiveness of fiscal measures in addressing potential economic challenges that may occur in the coming months or years. Emergency economic support should not become permanent.

The budget has set a GDP growth rate target of 5.5 per cent for the fiscal year 2025-26 against a realised GDP growth rate of 3.97 per cent for the current fiscal year and an inflation target of 6.5 per cent. However, such a growth projection comes at a time when all major economies are facing a downturn, the US is set to suffer the sharpest drop. The OECD predicts US growth will slow from 2.8 per cent in 2024 to 1.6 per cent in 2025 and 1.5 per cent in 2026. The OECD further said, "This reflects the substantial increase in the effective tariff rate on imports and retaliation from some trading partners, high economic policy uncertainty, a significant slowdown in net immigration, and a sizeable reduction in the federal workforce." The inflation target appears challenging based on the experience of the past few years as well as the current economic and political climate.

An economic slowdown in developed countries is concerning for developing countries like Bangladesh, which depend on exports to wealthy regions such as the US, UK, and EU. Economic slowdown in these countries will hit Bangladesh hard. It is also to be noted that all developing countries including Bangladesh are at the receiving end of the advanced economies macroeconomic policy consequences. The budget document does not indicate that the Bangladesh economy may experience a significant slowdown, recession, or stagflation. Rather the picture painted is just the opposite.

According to the World Bank during the interim government's tenure, more than 2.7 million people have become new-poor. Of these, 1.8 million are women. Wages have not kept up with inflation, reducing real incomes. High inflation and increasing unemployment are indicators of an economy potentially experiencing stagflation. Domestic and foreign investment are stagnant, and income inequality is increasing, further worsening economic turmoil.

For a trade dependent country like Bangladesh, budget deficits can boost inflation considerably. Also, fiscal deficits can widen the current account deficit and push up interest rates. An appreciating US dollar as reflected in the BDT/USD exchange rate will make debt repayment or buying commodities even more expensive.

The budget includes measures designed to prepare the economy for becoming a lower-middle income country by November of next year. With that objective in mind, the tariff structure has been simplified by reducing tariffs and removing supplementary and regulatory duties on a very large number of goods rather than introducing a simplified tariff rate across the board. Despite design limitations, this is a positive step towards creating a more competitive environment in the country which is the key to productivity growth.

The principal fiscal challenge facing Bangladesh needs to be viewed in the context of high inflation, rising unemployment, poverty and income inequality and falling to stagnant investment both domestic and foreign. This fiscal year's budget prioritises debt servicing over public welfare. Structural reforms are necessary and have been recognised for a long time as crucial. But the budget appears to be business-as-usual type without any attempt to undertake structural reforms needed to revamp the economy.​

 

[Saif]

https://thefinancialexpress.com.bd/economy/bangladesh/contractionary-fiscal-policy-for-private-sector-not-for-government-says-bnps-mintoo

Contractionary fiscal policy for private sector, not for government, says BNP’s Mintoo

bdnews24.com
Published :
Jun 21, 2025 21:55
Updated :
Jun 21, 2025 21:55

Abdul Awal Mintoo, business leader and vice-chairman of the opposition BNP, has criticised the government for applying austerity measures selectively in the proposed 2025-26 national budget.

Speaking at a discussion titled “Budget Debate: Context-Appendix” organised by the Bangladesh Economic Association (BEA) at the SIRDAP auditorium in Dhaka on Saturday, he said the austerity policies were designed only for the private sector, while the government exempted itself.

“To curb inflation, we’ve raised interest rates, fair enough,” he said. “We’ve also slashed the size of the budget by 7 to 8 billion under a tight fiscal policy.

“But what’s clear is that this contractionary monetary and fiscal policy is targeted solely at the private sector.”

Mintoo's remarks were sharply critical of what he sees as a dual standard in the government’s economic approach--tightening the belt for businesses while continuing unrestrained spending in public institutions.

He said: “In the past one and a half years, Bangladesh has received a total of Tk 3 trillion in bank deposits. The government has taken Tk 2.70 trillion from it. So I don't see a tight fiscal policy for them.”

He advised the government to take all aspects into consideration and adopt a policy after judgement and analysis.

Although the interim government has talked about reforms in several areas, Mintoo says they are not evident.

Pointing out that the proposed budget also does not show any reforms to the identified problems of the economy, he said: “On one hand, economic growth is low, on the other hand, inflation is high.

“To get out of this situation, some reforms could have been made in this budget. But I haven't seen that.”

On Jun 2, Finance Advisor Salehuddin Ahmed presented a budget of Tk 7.9 trillion for the new fiscal year.

Although the overall budget has been reduced, most of the reduction has been done in the development sector, which directly benefits the citizens.

A notable rise is seen in non-development or operating expenditure. For the upcoming fiscal year, operating expenditure has increased by Tk 283.46 billion to Tk 5,353.17 billion.

In comparison, the outgoing 2024-25 budget had set operating expenditure at Tk 569.71 billion, which was later revised down to Tk 560 billion.

The proposed budget for the upcoming fiscal year estimates a deficit of Tk 2.26 trillion, of which Tk 1.26 trillion, which is equivalent to 2 percent of GDP, will be sourced internally.

Among these internal sources, the government plans to borrow Tk 140 billion from the banking sector, representing 1.67 percent of GDP.

In addition, it aims to raise Tk 125 billion from savings certificates and Tk 210 billion from non-bank financial institutions.

ADVISOR SEES “NATIONAL CONSENSUS” ON CORRUPTION

The chief guest of the discussion meeting, Muhammad Fouzul Kabir Khan, shared his experience after taking over as the interim government’s advisor on power, energy, and mineral resources.

He said, “I’ve seen a national consensus on corruption. No one is exempt. Politicians, bureaucrats, professors, everyone is involved.”

Giving an example, he said: “There was a report in Prothom Alo about the Bridges Division, which falls under one of the ministries I oversee.

“They built buildings for the rehabilitation of those who have been affected by a project, but later discovered some areas had been left out.

“So as a solution, they decided to distribute it among government officials. But there’s already a separate ministry for that, the Ministry of Housing and Public Works.

“It was unimaginable that even cabinet secretaries and university professors were taking bribes.”

Regarding lobbying, he said: “Politicians still meet with me, but none of them want corruption to end. Rather, they want to be complicit in it themselves.

“They say things like, ‘we couldn’t do business during the fascist era, so now it’s our turn'.”

In contrast, regarding the government’s efforts, he said: “We’re trying to introduce competition in the economy. Wherever there’s business, there should be competition. We’ve opened everything up.”

He expressed hopes of inflation declining by July or August.​

 

[Saif]

FY26 budget to be passed today

The interim government is going to pass the national budget for the 2025-26 financial year today, with the proposed money legalisation facility through the construction of buildings on own land and the purchase of flats likely to be dropped.

www.newagebd.net

FY26 budget to be passed today
Money legalisation scope likely to be dropped

Staff Correspondent 22 June, 2025, 00:06

The interim government is going to pass the national budget for the 2025-26 financial year today, with the proposed money legalisation facility through the construction of buildings on own land and the purchase of flats likely to be dropped.

On June 2, finance adviser Salehuddin Ahmed unveiled a Tk 7.9 lakh crore proposed budget for the financial year beginning on July 1 in a televised address in the absence of Jatiya Sangsad.

It is the first budget of the interim government that assumed power on August 8, 2024, three days after the ouster of the authoritarian Awami League regime in mass uprising.

Internal Resources Division officials said that a preliminary decision was made to drop the money legalisation provision amid widespread criticism against the facility.

They said that the final decision on the issue would come from a meeting of the advisory council today.

Planning adviser Wahiduddin Mahmud in a post-budget discussion arranged by local think-tank Research and Policy Integration for Development in the capital Dhaka on Saturday said that the special scope for legalising undisclosed money had brought no major benefits in the past years in term of generating tax.

‘So, dropping the provision proposed in the FY26 budget will not make a big difference,’ said the planning adviser.

The IRD officials, however, said that a general scope for legalising undisclosed money would be kept in the FY26 budget for taxpayers who failed to disclose their legal incomes in the past years.

In that case, the taxpayers have to pay penalty in addition to giving the maximum income tax as per the proposed slabs, they said.

The National Board of Revenue is also expected to bring about some minor changes to the budget proposals.

The minor changes are linked to the cancellation of 5 per cent advance income tax on imports of lenses and the same amount of duty on import of heart rings, the officials said.

Besides, import duty on solar panel may be reduced, they said.

In the absence of parliament, the passage of the national budget will be made by promulgating an ordinance.

An ordinance on the proposed budget was also promulgated on June 2.

The interim government has proposed an outlay of Tk 7.90 lakh crore in the FY26 budget with Tk 5.6 lakh crore has been earmarked for non-development budget.

The development budget has been set at Tk 2.30 lakh crore.

The target for the gross domestic product growth has been set at 5.5 per cent, that for inflation at 6.5 per cent, and that for private investment at 24.31 per cent in FY26.

The overall revenue income has been set at Tk 5.64 lakh crore. Of the amount, Tk 4.99 lakh crore is projected to be generated by the National Board of Revenue.

The finance adviser has projected net loans of Tk 96,000 crore from external sources and Tk 1.25 lakh crore borrowing from domestic sources to meet the deficit accounting for 3.6 per cent of the projected GDP at Tk 62.44 lakh crore in FY26.​

 

[Saif]

Budget approved with money-whitening scope blocked, tax readjustments

Scope for legalizing undisclosed money is finally blocked while safety net widened as the new national budget for FY2025-26 is approved with changes in fiscal measures, including tax cuts. The government ramped up the allocation for social safety-net

thefinancialexpress.com.bd

Special annuity granted for govt employees, pensioners
Budget approved with money-whitening scope blocked, tax readjustments

Published :
Jun 23, 2025 00:03
Updated :
Jun 23, 2025 00:03

Scope for legalizing undisclosed money is finally blocked while safety net widened as the new national budget for FY2025-26 is approved with changes in fiscal measures, including tax cuts.

The government ramped up the allocation for social safety-net programmes by over Tk 100 billion, raising the total to Tk 912.97 billion.

Another key decision involves deferring the third phase of incentive cuts for exporters. Initially scheduled for July 2025, the cut will now take effect from January 2026.

The announcements were made Sunday at a press conference organised by the Ministry of Finance following the final seal of approval given to the Tk 7.9-trillion budget by the council of advisers of the interim government.

The budget, endorsed by the Advisory Council at its meeting on the day with Chief Adviser Professor Muhammad Yunus in the chair, will be authenticated with a presidential ordinance for execution as there is no parliament in the interregnum created through the 'July mass uprising'.

"We've dared to abolish the provision for whitening black or undisclosed money-something no one did before," said Finance Adviser Dr Salehuddin Ahmed during the briefing in the Finance Division conference room in Bangladesh Secretariat.

The finance adviser said the government refrained from launching any megaprojects and excluded many non-essential ones to keep the development budget realistic.

"We've also focused on the value of money. We are borrowing Tk 5.0 and want to utilise it efficiently, rather than spending our own Tk 2.0 or Tk 3.0 casually."

Framed in the wake of economic volatility amidst political tumults at home and abroad, the budget cautiously estimates GDP growth at 5.5 per cent while taming inflation to 6.5 per cent for the fiscal year starting July 1.

He said the third-phase incentive cuts for exporters, scheduled for July 2025, will now take effect from January 2026. The postponement is to allow the private sector time to adjust, explains Mr Ahmed, who holds the nation's purse strings in the interim period.

"So far, two reductions in incentives have been made, and the third was scheduled for July. We pushed it to January to support private investment."

Although the budget, initially proposed on June 02, retained the option for legalizing black money through real-estate investments, this provision was later dropped on public backlash.

According to NBR sources, around Tk 470 billion in undisclosed funds had been declared under such schemes in the past for mainstreaming the unaccounted-for money.

However, despite offering this chance to repatriate laundered money in FY2022-23, no one availed of the clemency.

At the press conference, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan confirmed the rollback: "We initially allowed the whitening of black money with additional taxes. However, following demands from various stakeholders, the provision has been removed."

Several changes have been made in tax policy related to VAT, customs duties and income tax.

Publicly traded companies that raised paid-up capital via IPOs or direct listings will be taxed at 22.5 per cent-or 20 per cent if all income is through bank transactions.

Other publicly traded companies will face a 27.5-percent rate-reduced to 25 per cent if income is bank-transacted.

Private universities, medical, dental, engineering, and IT-only colleges will enjoy a cut-down tax rate of 10 per cent from 15 per cent.

Property-transfer tax deductions have been lowered to 5.0 per cent, 3.0 per cent and 2.0 per cent from 8.0 per cent, 6.0 per cent and 4.0 per cent respectively. In value-added tax (VAT), advance tax on refined petroleum imports has been reduced to 2.0 per cent from 7.5 per cent.

VAT exemption is granted at the production stage for cotton made from environment-friendly by recycling 'garment jhut (scraps)'.

Also, VAT exemption now applies to rent on spaces used by women-run beauty parlours.

Ballpoint pens and imports of heart rings and eye lenses are now VAT-free following the revisions in fiscal measures.

Under customs duties, the government plans to implement invoice-based customs valuation for petroleum imports, reducing crude-oil duties from 5.0 per cent to 3.0 per cent, and other petroleum duties from 10 per cent to 6.0 per cent.

Solar inverter-import duties have been slashed from 10 per cent to 1.0 per cent to support solar energy on the cusp of transition to clean energy.

Duty on Technically Specified Natural Rubber, used in tyre production, got halved from 10 per cent to 5.0 per cent.

Ten additional medical equipment items have been added to the duty-free list to improve healthcare access. A special allowance has been set at a minimum of Tk 1,500 for government employees and Tk 750 for pensioners.

Pensioners receiving Tk 17,388 or more will get a 10-percent hike, while those receiving less will get a raise by 15 per cent.

Dr Ahmed said nearly 400 public suggestions had been received since the announcement of the budget on June 02, reflecting "growing civic engagement in economic policymaking".​

 

[Saif]

CPD calls for mid-term review to ensure efficient implementation of FY26 budget

As the FY2025–26 national budget nears formal approval by the interim government, the Centre for Policy Dialogue (CPD) has called for a mid-term review of the budget's implementation status to ensure transparency, accountability, and course correction if necessary. Speaking at the “CPD

thefinancialexpress.com.bd

CPD calls for mid-term review to ensure efficient implementation of FY26 budget
The think tank says budget lacks alignment with stated goals of equity and sustainability

FE ONLINE REPORT
Published :
Jun 22, 2025 11:55
Updated :
Jun 22, 2025 12:24

As the FY2025–26 national budget nears formal approval by the interim government, the Centre for Policy Dialogue (CPD) has called for a mid-term review of the budget's implementation status to ensure transparency, accountability, and course correction if necessary.

Speaking at the “CPD Budget Dialogue 2025”, held at a city hotel on Sunday, CPD Executive Director Dr Fahmida Khatun noted that although the budget puts forward progressive themes—such as a focus on overall development rather than just growth, and prioritising people over physical infrastructure—these objectives are not sufficiently supported by the proposed fiscal measures.

“The budget for FY26 is exceptional in terms of its size, being smaller than the previous fiscal year's, but this contraction has not been matched with a clearly articulated strategy to address ongoing economic challenges,” said Dr Khatun during her keynote presentation.

“We appreciate initiatives like tax reliefs, sectoral allocations, and incentives, along with higher taxation on harmful activities. However, the budget falls short of offering a holistic response to the difficulties currently facing people and businesses.”

She further observed that certain fiscal measures contradict the budget's overarching theme of ‘Building an Equitable and Sustainable Economic System’, weakening its credibility and practical relevance.

“The interim government must take responsibility for implementing this budget in an efficient and transparent manner,” Dr Khatun stressed.

“A mid-year assessment with corrective measures will be crucial for maintaining public trust and ensuring the budget delivers on its promises.”

The event was moderated and chaired by CPD Distinguished Fellow Professor Mustafizur Rahman, who echoed the importance of aligning fiscal measures with declared priorities.​

 

[Saif]

Not a budget of dream!

The interim government's Finance Adviser, Dr Salehuddin Ahmed, in response to criticism of the just-approved budget for FY 2025-26 that it followed an 'old road', came out forcefully saying that it was rather a 'highway born out of the old road'. The argument he produced to answer his critics is mo

thefinancialexpress.com.bd

Not a budget of dream!

SYED FATTAHUL ALIM
Published :
Jun 24, 2025 01:03
Updated :
Jun 24, 2025 01:03

The interim government's Finance Adviser, Dr Salehuddin Ahmed, in response to criticism of the just-approved budget for FY 2025-26 that it followed an 'old road', came out forcefully saying that it was rather a 'highway born out of the old road'. The argument he produced to answer his critics is more rhetorical than substantive. Obviously, the expectation from the critiquing economists was that the budget would reflect the revolutionary transformation that the nation underwent through the July upheaval of 2024. Or in other words, the first budget of this government of change would be somewhat reformist, if not revolutionary, and not at all a traditional one, the critics expected.

Budgets are essentially the financial statement of a government's anticipated revenue incomes and planned expenditures for a particular financial year. Anti-people governments like the one ousted in August last year, are characterised by the way they allocated the nation's resources in the budget. The rich and the section of the population that the government of the time represented naturally got the lion's share of the budgeted amount. The rich paid less in terms of income tax, while the people in the lower income bracket paid more. The local economic think tank, the Centre for Policy Dialogue (CPD), for instance, criticised the proposed changes in the pattern of levying income tax in the new budget. It said, the budget disproportionately raised tax burden on the low and middle income earners over the next two fiscal years. "From a distributional perspective this (budget) structure is not balanced. A key objective of the national budget is to reduce inequality, and this structure doesn't align with that goal", said Dr Fahmida Khatun, the think tank's Executive Director.

The past governments, fascistic or otherwise, were known for their yearly budgets that favoured the privileged sections of society at the expense of the rest of the population. Those were the traditional budgets. So, where does the present budget prepared under the leadership of the incumbent finance adviser depart from the traditional ones? True, his is not, as the Finance Adviser would like to describe, a 'dream budget' .But dream is too fanciful a metaphor for the government's present annual financial plan which is ordinary and lacks imagination. No doubt, the decision of not to go for any new large-scale infrastructure projects in the coming year is commendable. Scrapping of the dormant or underperforming projects as part of rationalising the Annual Development Programme (ADP), too, is admittedly a step in the right direction. Similarly, allocation of Tk 912.97 billion which exceeds the allocation proposed initially by Tk.100 billion for the Social Safety Net (SSN) programme to protect the poor and the vulnerable, is a piece of good news for the intended beneficiaries of the programme. Started by the past government as a sop for the needy, the question about how far the genuine candidates for the allowances are being benefitted remains. For there were allegations galore in the past about the SSN allowances being misappropriated by fake recipients linked to local ruling party goons. It is not clear, if the interim government has developed a sound database of actual beneficiaries so the money is not wasted. However, It would make a real difference if the budget planners could conceive of a set of income generating projects with the SSN fund where the targeted beneficiaries would be involved according to their abilities. That would provide a better opportunity for the poor and the vulnerable to work and earn income with dignity rather than being mere recipients of dole. And such a programme would be more imaginative or dreamlike as the adviser might like to put it.​

 

[Saif]

Budget FY26 misses visionary reform

The finance advisor of the interim government, Dr Saleuddin Ahmad, presented the national budget for fiscal year 2025-26 (FY26) when the country is going through a crucial moment after the fall of the Hasina's autocratic regime. Given the fact that a lot of institutional reforms are under way and t

thefinancialexpress.com.bd

Budget FY26 misses visionary reform
In the year when a lot of institutional reforms are under way

N N Tarun Chakravorty
Published :
Jul 15, 2025 22:51
Updated :
Jul 15, 2025 22:51

The finance advisor of the interim government, Dr Saleuddin Ahmad, presented the national budget for fiscal year 2025-26 (FY26) when the country is going through a crucial moment after the fall of the Hasina's autocratic regime. Given the fact that a lot of institutional reforms are under way and that Saleuddin is an economist and the ex-governor of Bangladesh Bank, it is astonishing that the budget does not indicate a visionary reform. It is rather a disappointing continuity of the past rather than a bold leap into the future. The budget, approved by the advisory council on June 22, neither reflects any coherent economic theory nor offers a transformative development strategy.

For example, Harvard Professor, Joseph Schumpeter in his early career became the Finance Minister of the Austrian government in 1919. During his tenure he made the national budget applying the concept of fiscal sociology, a prominent theory of another Austrian sociologist, Rudolf Goldscheid. But Saleuddin's budget is a conservative fiscal arrangement proposing no actual socio-economic transformative strategies.

Expectation was there that the FY26 budget would be guided by a clear and coherent economic theory. It is neither Keynesian in spirit, nor developmentalist in its commitment to structural transformations. It doesn't embrace neoclassical supply-side strategies to spur private sector dynamism either. Instead, it reflects superficial technocratic calculations of numbers and lacks future vision.

The target of Tk 5.64 trillion in Revenue may appear to be achievable, but given the poor tax collecting mechanism, persistent inefficiencies in tax administration, continued reliance on indirect taxation, political unwillingness to reform VAT exemptions and high-level corruption, it is too ambitious indeed. Without structural tax reforms, this figure is unlikely to be realised in practice. In order for it to be realised there must be deep, systemic reforms in how the government collects taxes. Some measures need to be taken such as expanding the tax base i.e., bringing more people and businesses into the tax net, reducing tax evasion and corruption, strengthening enforcement and digitisation, shifting from over-reliance on indirect taxes to more equitable direct taxation like income and corporate tax. Without such measures, the ambitious revenue target will remain just a number on paper, not a feasible or collectible amount.

Secondly, the level of borrowing proposed in the current of budget is quite reasonable considering the level of borrowing of many other successful economies. Japan with total public debt is over 260 per cent of its gross domestic product (GDP) is the highest among advanced economies. It might sound alarming, but unlike countries like Bangladesh or Pakistan, most of Japan's borrowing is from domestic sources. Government bonds are owned by its citizens and institutions. As a result, cost of borrowing for Japan is low. Debt-to-GDP ratios of USA, France, Germany, Italy, UK and Canada are?123-124 per cent, 110 per cent,?63 per cent, 135 per cent, 101 per cent,?and 107 per cent respectively. Despite high Debt-to-GDP ratios their economies are performing well maybe because they maintain access to stable financing due to deep domestic markets.

Having called the level of borrowing proposed in Bangladesh's budget in the current fiscal year reasonable, a note of warning must be posed: productive investments, rather than current expenditures, have to be ensured. Maintaining high growth, strengthening revenue mobilisation (through an effective revenue collection mechanism with a broad tax base, minimal evasion, robust enforcement, etc.), and institutional stability (including political stability, rule of law, efficient bureaucracy, and a credible, independent central bank)- are also imperative for long-term fiscal health. If domestic interest rates rise or any external shocks take place, borrowing will create additional strain. Therefore, precautionary measures must be taken.

It's widely accepted that health and education are the foundations of human capital. Yet, despite repeated warnings from experts and development agencies, spending on education remains a meagre 2.1 per cent of GDP, while health receives less than 1 per cent. These figures are well below the UNESCO-recommended 4-6 per cent, and the averages for low-income countries and South Asia. In contrast to Bangladesh's 2.1 per cent, education allocations in Nepal, Bhutan, and the Maldives stand at 4.3 per cent, 8 per cent, and 4.7 per cent respectively-even though Nepal's per capita income is just half that of Bangladesh.

Such attitudes reflect the moral bankruptcy of policymakers in a country where millions face educational disparities and inadequate access to healthcare. The budget falls short of the minimum thresholds recommended by UNESCO and the WHO. What is more alarming is that historical trends reveal that a significant portion of even these limited allocations is likely to remain unspent due to bureaucratic inefficiencies and weak institutional capacity.

The budget claims to support private sector growth, but there is little real effort behind the rhetoric. New taxes on turnover and digital payments could hurt small businesses and startups. There is no clear roadmap for easing regulations, boosting exports, or attracting foreign investment.

Bangladesh must align university education with market needs, focusing on technology, healthcare, and green industries. Expanding vocational and technical training will give youth practical skills. The government should promote entrepreneurship through funding and mentorship, support digital jobs and freelancing, improve infrastructure, foster public-private partnerships to create internships and apprenticeships, and decentralise opportunities beyond major cities to fully leverage youth potential. Effective policies can transform the youth into a source of innovation and growth.

The FY26 budget reflects a continuation of a fiscal austerity mindset, not bold reforms. It has failed to adopt a coherent economic strategy or respond to the country's changing development needs-making it a symbol of a wasted opportunity. Bangladesh is in desperate need of a visionary budget. But what it has delivered is a traditional bureaucratic exercise-one that can balance books but not redress social injustice and inequality.

To break away from this traditionalism, the government needs to adopt a development strategy based on Keynesian and structuralist principles, reform tax administration to increase direct tax collection, invest in education, health, and digital infrastructure, develop an industrial policy to improve competitiveness and employment, and ensure transparency and accountability in budget implementation.

Dr N N Tarun Chakravorty is a Visiting Professor of Economics at Siberian Federal University, Russia. Editor-At-Large, South Asia Journal.​