[🇧🇩] Budget for 2026

[Saif]

Date of Event: Mar 3, 2025 Source : https://www.newagebd.net/post/country/259214/fy26-budget-to-prioritise-reform-initiatives

FY26 budget to prioritise reform initiatives
Shakhawat Hossain 02 March, 2025, 23:39

The national budget for the forthcoming financial year of 2025-26 will focus on the reform initiatives taken by the interim government aiming at ensuring good governance, eradicating poverty and curbing discrimination to achieve an inclusive economic growth in the country.

Officials referring to a directive given by finance secretary Khairuzzaman Mozumder in the past month said that all ministries and divisions were asked to send information linked to reform programmes taken by the interim government that assumed power on August 8, 2024 after the ouster of autocratic Awami League regime in a mass uprising in July-August past year.

The ministries and divisions have been asked to send the information by March 15, added the officials.

Finance adviser Salehuddin Ahmed, who is expected to announce the national budget on June 5, in his speech would give the updates on reforms in the areas of good governance, inclusive growth and poverty alleviation.

Economists said that it would be highly interesting to know about the reform programmes taken by the ministries and divisions since the national budget would be the first major government document to follow up the spirit of the mass uprising.

People are yet to know about priority reform agendas of the different ministries and division, said former World Bank Dhaka Office chief economist Zahid Hussain.

Besides, people will be able to learn the interim government’s views on mass uprising, to be reflected in the budget speech, he added.

Economists said that the narratives of uprising available in the government documents had so far been prepared by the task forces and commissions led by economists, academicians, law experts and former bureaucrats.

Officials said the finance secretary issued the directive after placing an outline of the new budget before interim government chief adviser Professor Muhammad Yunus on February 5.

They said that the chief adviser suggested a proper reflection of the uprising spirit in the budget document.

It has been reported that the chief adviser directed ministers and divisions to select at least one reform programme out of the recommendations made by the task force on re-strategising the economy and mobilising resources for equitable and sustainable development.

The task force’s recommendations include new institutions in the civil aviation sector, postgraduate education, research in science, technology, engineering and mathematics, information and communication technology and artificial intelligence.

To tackle the issue of over-regulation and bureaucratic hurdles that have long hindered business growth, the task force proposes the creation of a regulatory reform commission tasking it with evaluating and streamlining regulations across sectors, including business operations and taxation.

The finance secretary also sought information regarding the measures taken by the ministries and divisions on the country’s graduation from the least developed country status in 2026.

The government needs to bring about changes in incentives for the export-oriented sector in the budget since the graduation would restrict the facilitating of direct cash subsidy.

Besides, the country would loss preferential tariff in sending goods to the developing and developed countries.

Economists said that the country was in a favourable position to complete graduation from the LDC status.

Some sections of stakeholders have demanded deferring the graduation process, citing disruption in businesses, said Centre for Policy Dialogue distinguished fellow Mustafizur Rahman.

He said that the FY26 budget document should disseminate updates from the ministries and division on the important national issue.

Officials said the finance ministry had planned a big outlay of about Tk 8.5 lakh crore for the 2025-26 financial year, aiming at encouraging business activities.

They said that emphasis would be given on the generation of more revenue by the National Board of Revenue to support the big expenditure plan.

The provisional target for the NBR has been set at Tk 5.2 lakh crore.

The annual development expenditure in FY26 would be close to a third of the total outlay with focus on job creation projects in sectors like education, health and social safety net.​

 

[Saif]

PRE-BUDGET DISCUSSION: Next budget may see cut in tax exemptions: NBR chair

National Board of Revenue Chairman Md Abdur Rahman Khan on Wednesday hinted that the tax exemption system might be removed in the forthcoming national budget...

www.newagebd.net

PRE-BUDGET DISCUSSION: Next budget may see cut in tax exemptions: NBR chair
Staff Correspondent 05 March, 2025, 22:29

Md Abdur Rahman Khan

National Board of Revenue Chairman Md Abdur Rahman Khan on Wednesday hinted that the tax exemption system might be removed in the forthcoming national budget.

He also said that, following this, the NBR had already withdrawn significant tax exemptions.

He said these at a pre-budget meeting with the Bangladesh Export Zone Authority, the Bangladesh Economic Zone Authority, the Bangladesh Investment Development Authority and the Bangladesh Hi-Tech Park Authority.

Some chambers and economic research institutions, including Business Initiative Leading Development, Bangladesh India Chambers of Commerce, Women Entrepreneurs Network for Development Association and American Chamber of Commerce in Bangladesh, were present during the discussion.

The NBR chairman said that the amount of tax that the government was getting now was almost equal to what it was losing due to tax exemptions.

‘We have to come out of this practice. We are facing huge pressure for this,’ he added, saying that they could provide support for a limited time, not for the whole life, as one should pay taxes at the regular rate.

He also said that individuals and business entities paying a reduced rate of taxes would have to pay a little bit more from the next budget and the NBR’s big target was to streamline the tax system for those who had been enjoying tax exemptions for a long time.

He said that the tax exemption would be withdrawn gradually.

In the discussion, BUILD proposed setting a flat VAT rate at 10 per cent, suggesting that it could help improve the government’s revenue collection.

BUILD said that in addition to the 15 per cent universal VAT rate, there were seven other rates: 1.5 per cent, 2 per cent, 2.4 per cent, 4.5 per cent, 5 per cent, 7.5 per cent and 10 per cent. This brings the total to eight different VAT rates and Section 46(1) of the VAT Law does not allow VAT credit or rebates for rates below 15 percent, it added.

Currently, 53 per cent of economic activities fall outside the VAT system, while the remaining 47 per cent are subject to varying rates across three levels and the rebate system remains largely ineffective, which discourages taxpayers from joining the VAT network.

AmCham emphasised the need for tax reforms and business-friendly policies in their budget proposals for the 2025-26 financial year.​

 

[Saif]

Annual budget not to rise in FY26 due to financial crisis

According to finance ministry sources, the budget will prioritise rural infrastructure to generate employment.

en.prothomalo.com

Annual budget not to rise in FY26 due to financial crisis
Fakhrul Islam
Dhaka
Published: 12 Mar 2025, 17: 53

Salehuddin Ahmed File photo

The government has decided to downsize the annual budget in the upcoming 2025-26 fiscal year. Low revenue collection, sluggish growth in tax and duties, and rising foreign loan repayments prompted the authorities to take this decision.

According to finance ministry sources, the next budget is likely to be similar to the current one, or lower than it, as the government decided not to increase the annual budget.

The budget for the current 2024-25 fiscal year was originally set at Tk 7.97 trillion, but the interim government has taken an initiative to revise it down to Tk 7.5 trillion. The previous fiscal year (2023-24) had a budget of Tk 7.61 trillion, and it was later reduced to Tk 7.14 trillion.

Regarding the upcoming budget, finance adviser Salehuddin Ahmed told Prothom Alo that they have to downsize the next budget due to various reasons, while the Annual Development Programme (ADP) will also face cuts. No new major projects will be undertaken, but funding for ongoing large-scale projects will continue.

According to finance ministry sources, the budget will prioritise rural infrastructure to generate employment.

In this regard, adviser Salehuddin Ahmed said the rural infrastructure sector has long been overlooked. They will try to raise allowances of social safety beneficiaries and meet the demands of the teachers in the new budget.

He also indicated that there will be reflections of the July movement spirit and recommendations of the white paper formulation committee and the task force.

Despite the budget constraints, expenses on salaries, allowances, and domestic and foreign debt repayments will see a slight rise. However, there will be no significant increase in development spending.

Budget presentation

With no functioning national parliament, finance adviser Salehuddin Ahmed will present the budget on television in early June, and it will be endorsed through an ordinance by the president. Typically, the finance minister presents the budget before the parliament. Since there is no political government, the budget will be presented before the nation through television, similar to instances in the previous caretaker governments.

Low flow of money

The National Board of Revenue (NBR) arranges a major portion of the annual budget. Its revenue collection target for the current fiscal year was Tk 4.8 trillion, and it was later revised to Tk 4.63 trillion. In the first seven months (July-January), the revenue board collected only Tk 1.96 trillion, falling short by Tk 510 billion.

Letter to all secretaries

The authorities have already started writing the budget speech. To ensure an inclusive budget speech, finance secretary Khairuzzaman Mozumder issued letters to secretaries of all ministries to submit proposals concerned with their respective sectors by 15 March.

Target to bring down inflation

The government aims to reduce inflation to 7 per cent in the next budget, down from the persistent double-digit rates recorded over the past year. Last month, inflation finally dropped below 10 per cent after 10 consecutive months.

The budget deficit for the current fiscal year was estimated at Tk 2.56 trillion, or 4.6 per cent of GDP. The government is planning to keep the next year’s deficit below 5 per cent of GDP. The GDP growth target for the 2025-26 fiscal year is being set at 5.5 per cent.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said the authorities created confusion with large budgets in the last 15 years, despite having no ability for implementation. From this point of view, a smaller budget is better.

“We hope the finance advisor will be able to present a good budget with reflections of the recommendations of the financial task force and the white paper formulation committee,” he said.​

 

[Saif]

Budget slashed by Tk 53,000cr

The government on Wednesday revised down the 2024-25 financial year budget by 6.6 per cent, or Tk 53,000 crore, to Tk 7,44,000 crore because of a shortage of resources, said officials...

www.newagebd.net

Budget slashed by Tk 53,000cr
Staff Correspondent 13 March, 2025, 00:17

The government on Wednesday revised down the 2024-25 financial year budget by 6.6 per cent, or Tk 53,000 crore, to Tk 7,44,000 crore because of a shortage of resources, said officials.

The Awami League government that was ousted on August 5, 2024 in a mass uprising had announced an outlay of Tk 7,97,000 crore for the current financial year (FY 25).

The interim government that assumed power on August 8 cut the outlay, reshaping it in the last quarter of the financial year to be ended in June.

However, the size of revision in the FY25 is less than that of the FY24.

Former finance minister Ali Hassan Mahmood Ali, who announced the last budget of the AL’s 15-year long regime, trimmed down the FY24 budget by Tk 57,000 crore.

Officials said that the Finance Division on Wednesday announced the revised budget authority for FY25, asking ministries and divisions to maintain the revised allocations.

The division also asked ministries to send back the money withdrawn from the previous allocations.

With the revision, the overall budget deficit has been reduced to Tk 2,26,000 crore from projected Tk 2,56,000 crore.

The major cut in the FY25 budget is attributed to downsizing the annual development programme by Tk 49,000 crore.

In the past week, the National Economic Council in a meeting revised down the ADP to Tk 2,16,000 crore from Tk 2,65,000 crore.

The overall revenue income has been revised at Tk 5,18,000 crore from projected Tk 5,41,000 crore.

Officials said that the National Board of Revenue facing a shortfall over Tk 50,000 crore in revenue collections in the first half of the FY25 had been given a revised target of Tk 4,63,000 crore from projected Tk 4,80,000 crore.

Earlier in December 2024, a meeting of the coordination council on macro-economy and resource management revised down the growth rate of the country’s gross domestic product to 5.2 per cent from earlier 6.8 per cent for FY25.

The next meeting of the coordination council will take place in the next month to draw the outline of the new national budget, the first under the interim government.​

 

[Saif]

Govt plans smaller budget with 6% GDP growth target

The interim government is planning to prepare a small budget with a 6 percent GDP growth target for the next fiscal year considering the sluggish economy and low revenue collection.

www.thedailystar.net

Govt plans smaller budget with 6% GDP growth target

The interim government is planning to prepare a small budget with a 6 percent GDP growth target for the next fiscal year considering the sluggish economy and low revenue collection.

Officials said the finance ministry has already started working to this end after receiving directives from the chief adviser, with Finance Adviser Salehuddin Ahmed set to begin pre-budgetary meetings with different stakeholders from next week.

Ahmed will preside over the series of meetings, the first of which will be held on Sunday featuring various economists. Later, the finance ministry will call upon business leaders, economic reporters and related other individuals.

But as the country's parliament is absent, he may announce the proposed budget for fiscal year (FY) 2025-26 on air.

Ahmed said they will complete the pre-budget meetings by April.

Finance Adviser Salehuddin Ahmed is set to begin pre-budgetary meetings with different stakeholders from next week

"No ambitious goals will be set in the upcoming national budget, and the GDP growth target will be set lower," he told The Daily Star.

Officials of the finance ministry said they had a long discussion with the Chief Adviser Prof Muhammad Yunus last month, where they presented a draft plan for formulating the budget.

The chief adviser then issued directives for the draft plan and those are now being incorporated, according to a senior official of the finance ministry.

As per the current plan, the GDP growth target for FY26 will be set at 6 percent, which is lower than the 6.75 percent being targeted in this year's budget.

However, the GDP growth target could be lowered to 5.25 percent in the revised budget for FY25 considering the damage caused by multiple floods and the interim government's contractionary monetary policy aimed at containing inflation.

Besides, GDP growth in the ongoing fiscal year is low as there was political unrest and an unstable business environment. But the growth will likely be higher next year thanks to gradual improvements in the economic environment, the officials said.

Multilateral lenders like the World Bank, International Monetary Fund and Asian Development Bank have also forecasted lower growth for the current fiscal year and enlarged the growth for the next.

Meanwhile, the targeted inflation rate for FY26 may rise to 6.5 percent while it was around 8 percent in the budget for the ongoing year.

The previous government had fixed the inflation target at 6.5 percent in the original budget.

The size of the draft budget presented to the chief adviser last month was about Tk 8.48 lakh crore, including an allotment for Annual Development Programmes (ADP) worth Tk 2.7 lakh crore.

Finance ministry officials said the chief adviser directed them to cut the budget short even further, which may result in it reaching Tk 8 lakh crore while the ADP size may remains Tk 2.4 crore.

The current fiscal years' original budget was Tk 7.97 lakh but was later revised by the interim government at Tk 7.44 lakh crore.

"Though the budget size increases every year, the upcoming budget may be down from the previous year's original budget," the official said.

Adviser Ahmed did not name the number, but he did say the size would not be much more than the current fiscal's budget.

"We will also prepare the ADP allocation pragmatically," he said.

The ADP allocation was Tk 2.65 lkah crore in the original budget, which was revised by Tk 2.16lakhn crore.​

 

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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.​

 

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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]

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]

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]

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.​

 

[Saif]

Next national budget will be business-friendly: Adviser Salehuddin

Finance Adviser Salehuddin Ahmed on Thursday assured that the upcoming national budget will be business-friendly, incorporating a favourable tax policy to boost investment, GDP growth, and employment generation. “We will present a business-friendly budget with a favourable tax policy to enha

thefinancialexpress.com.bd

Next national budget will be business-friendly: Adviser Salehuddin
FE Online Desk
Published :
Mar 20, 2025 19:38
Updated :
Mar 20, 2025 19:38

Finance Adviser Salehuddin Ahmed on Thursday assured that the upcoming national budget will be business-friendly, incorporating a favourable tax policy to boost investment, GDP growth, and employment generation.

“We will present a business-friendly budget with a favourable tax policy to enhance overall investment, GDP, and employment. The business community has provided us with a set of practical suggestions,” he told reporters after a pre-budget meeting with business leaders at the Finance Division Conference Room at the Bangladesh Secretariat, UNB reports.

Salehuddin said the business community has urged the government to lower tax rates across various sectors and streamline tax payments through online platforms.

Regarding customs procedures, he noted that the government would consider the business community’s suggestions concerning the Harmonized System (HS) code.

Bangladesh Chamber of Industries (BCI) President Anwar-Ul-Alam Chowdhury said the discussion mainly focused on National Board of Revenue (NBR)-related issues, particularly income tax.

“The finance adviser appeared positive, emphasising that the NBR should strengthen efforts in revenue mobilization and tax collection. However, our primary concern remains enhancing industrial competitiveness,” he said.

Chowdhury added that the finance adviser requested written proposals regarding banking sector issues and fiscal support.

Leaders from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and Bangladesh Textile Mills Association (BTMA) also placed their suggestions during the meeting.

BCI President Anwar-Ul-Alam Chowdhury stressed the importance of aligning tax assessment with international practices, to which the Finance Adviser agreed.

BKMEA President Mohammad Hatem expressed optimism that the meeting would lead to positive changes in the taxation system, as assured by the NBR Chairman.

“We requested a revision of the provision requiring a 1 per cent Advance Income Tax. Tax should be paid on profit, but currently, tax is deducted at source on total sales,” Hatem said.

While the business leaders did not propose changes to corporate tax rates, they advocated for reducing VAT in specific sectors. They also recommended standardizing the HS code to six digits for efficient customs clearance under the bond management system.

Hatem noted that the business community appreciated improvements in services at Chattogram Customs House. He urged the government to simplify VAT regulations and HS code complexities.

Additionally, the BKMEA requested direct cash incentives on export proceeds to avoid procedural complications.

In a formal proposal, the BKMEA suggested maintaining the source tax for the Ready-Made Garment (RMG) sector at 0.5 per cent for the next five fiscal years (until FY30), treating it as the final tax realization.

They also demanded a business-friendly taxation policy, necessary reforms, and full VAT exemption on products and services related to 100 per cent export-oriented RMG industries.​

 

[Saif]

Next budget likely Tk 7.92t with doable Targets

Bangladesh's upcoming budget may be Tk 7.92 trillion in size, smaller than the current one, as the interim government walks a tightrope amid a subdued trend in revenue earnings and foreign-aid inflow in the present context. Officials give the possible budgeting outlook, saying that this is for the

thefinancialexpress.com.bd

Taming inflation to 6.5pc pivotal promise
Next budget likely Tk 7.92t with doable Targets
ADP Tk 2.3t, GDP growth target modest 5.5pc

Syful Islam
Published :
Apr 11, 2025 23:50
Updated :
Apr 11, 2025 23:50

Bangladesh's upcoming budget may be Tk 7.92 trillion in size, smaller than the current one, as the interim government walks a tightrope amid a subdued trend in revenue earnings and foreign-aid inflow in the present context.

Officials give the possible budgeting outlook, saying that this is for the first time Bangladesh is framing a smaller budget compared to the previous one, as the government also takes into consideration slower implementation of the current budget.

A technical committee meeting on budgeting at the ministry of finance made the decision Wednesday. The committee for coordination on fiscal, monetary, and currency exchange, headed by finance adviser Dr Saleh Uddin Ahmed, will take the final decision on the budget for the fiscal year 2025-26.

The national budget for the outgoing financial year, 2024-25, is worth a total of Tk 7.97 trillion. Its size was revised down by Tk 490 billion with cuts from the original annual development programme (ADP) of Tk 2.65 trillion. Finance Ministry sources have said the National Board of Revenue may be given a daunting task of collecting Tk 5.10 trillion in the next fiscal year, up from Tk 4.80 trillion in the current year.

The ADP outlay may be fixed at Tk 2.30 trillion for the next fiscal year, according to officials concerned.

The government may set GDP (gross domestic product) growth target at 5.5 per cent in the next fiscal year, compared to 6.75 per cent in the outgoing fiscal year.

Officials say in the next budget the government may set a target of bringing down the rate of inflation to 6.5 per cent, similar to the current budgetary target. In the current fiscal year until March, inflation remained defiant of the target to hover between 11.66 per cent and 9.32 per cent.

Also, the government plans to keep budget deficit below 4.0 per cent against 4.6% of the GDP in the current fiscal year, according to officials concerned.

Finance officials say the major target to be laid in the next fiscal budget will be lessening inflation and enhancing budget implementation.

They say against the budgetary target of Tk 4.80 trillion, the National Board of Revenue until this February, could generate Tk 2.21 trillion. At the end of the fiscal year, they predict, the NBR "may end up collecting Tk 4.0 trillion at best, which is significantly lower than the revised target of Tk 4.635 trillion".

The ADP implementation until February was below 25 per cent-the lowest tally in 14 years-as official data showed.

As such, they say, funding a big budget in the next fiscal year will be difficult and such a big budget will remain largely unimplemented.

Dr Fahmida Khatun, executive director at the Centre for Policy Dialogue (CPD), finds a few reasons for having a small budget for the upcoming fiscal year.

First one is Bangladesh has been grappling with persistently low tax revenues. The tax-to-GDP ratio remains among the lowest globally, limiting government's fiscal capacity, she mentions.

Ms Khatun notes that as part of the $4.7-billion loan programme with the International Monetary Fund (IMF), Bangladesh is required to implement several fiscal reforms. These include reducing the budget size, enhancing tax collection, adopting market-based exchange rate, and narrowing budget deficit.

In the second place is the government aim to bring inflation down to about 6-7 per cent in FY 2025-26. To achieve the target, the government needs to implement cost-saving measures in public spending alongside pursuing a contractionary monetary policy, she notes.

"While the decision to downsize the national budget aligns with efforts to stabilise the economy and meeting international obligations, it poses challenges such as lowering public spending which could affect employment generation," says the CPD executive director.

She feels that it's a must-do for the government to mitigate the adverse effects. "It must prioritise efficient resource allocation, protect essential social programmes for the poor, and implement reforms to enhance revenue collection."​

 

[Saif]

FY26 budget: Govt to cut spending

The interim government is going to bring about major changes in the national budget by squeezing expenditure for the forthcoming financial year of 2025-26 because of resource crunches, said officials.

www.newagebd.net

FY26 budget: Govt to cut spending
Shakhawat Hossain 15 April, 2025, 23:15

The interim government is going to bring about major changes in the national budget by squeezing expenditure for the forthcoming financial year of 2025-26 because of resource crunches, said officials.

It may announce a downsized outlay of Tk 7.9 lakh crore to reduce dependency on borrowing to meet budget deficit.

Before ousting from power in the face of a mass uprising on August 5, 2024, the Awami League government had announced a Tk 7.97 lakh crore budget for FY25.

However, in March 2025, the interim government revised down the overall layout to Tk 7.4 lakh crore after a cut in the annual development programme by Tk 49,000 crore to Tk 2.16 lakh crore from initial Tk 2.65 lakh crore.

A trimmed ADP of Tk 2.3 lakh crore is likely to be taken for FY26, dropping unnecessary and politically motivated projects, said the officials, referring to the decisions made at an online meeting of the coordination council on macro-economy and resource management on Tuesday.

Education, health and social safety net programme are likely to be major thrust areas with a view to presenting a realistic budget, added the officials.

Presided over by finance adviser Salehuddin Ahmed, the meeting decided to keep the budget size as well as its deficit at a tolerable level.

Officials attending the meeting said the latest projections about the forthcoming national budget were varied significantly from the ones made in the previous coordination council meeting in December 2024.

The interim government had planned to announce an expansionary budget of Tk 8.48 lakh crore with a gross domestic product growth rate at 6 per cent.

But Tuesday’s meeting, which was attended, among others, by planning adviser Wahiduddin Mahmud and commerce adviser Sk Bashir Uddin, decided to project the GDP growth rate at 5.5 per cent, said the officials.

Inflation which has been hovering at 9 per cent is likely to be projected at 6.5 per cent, added the officials.

The officials observed that considering the overall high inflation in FY25, the next budget would not be expansionary in real term.

The ousted Awami League regime in its last budget of the 15-year rule aimed at achieving 6.75 per cent GDP growth and keeping inflation at 6 per cent.

Citing the 90-day pause on United States-imposed reciprocal tariffs, Tuesday’s meeting had a little discussion over the tariffs and their impacts on the country’s overall exports.

The finance adviser is expected to announce the national budget for FY26 on June 5 in a televised programme in the absence of a parliament.

He has already stated on a number of occasions that the new budget would be a realistic one, leaving footprints for an elected government to follow.​

 

[Saif]

Interim govt to announce budget 2 June

Breaking with tradition, the interim government has decided to announce the national budget on 2 June. This decision was made during a meeting of the Coordination Council on Financial, Monetary and Exchange Rate Affairs and the Asset Management Committee held at the Secretariat on Tuesday.

en.prothomalo.com

Interim govt to announce budget 2 June
Special Correspondent Dhaka
Published: 16 Apr 2025, 16: 15

Finance adviser Salehuddin Ahmed. File photo

Breaking with tradition, the interim government has decided to announce the national budget on 2 June.

This decision was made during a meeting of the Coordination Council on Financial, Monetary and Exchange Rate Affairs and the Asset Management Committee held at the Secretariat on Tuesday.

The meeting was chaired by the finance adviser, Salehuddin Ahmed, according to sources present at the meeting.

This will be the budget of the interim government led by Professor Muhammad Yunus.

Traditionally, the budget of Bangladesh is presented in parliament on a Thursday in June each fiscal year. But the budget for the 2025-26 fiscal year is scheduled to be announced on Monday.

It is anticipated that the proposed budget will amount to Tk 7.9 trillion (790,000 crore).

The budget will be announced before the Eid-ul-Azha holidays. The holidays are expected to start from the second week of June.

In keeping with tradition, the finance adviser will hold a post-budget press conference the following day, as confirmed by sources within the Ministry of Finance.

The original budget for the current (2024-25) fiscal year stood at Tk 7.97 trillion. Accordingly, the upcoming budget may be approximately BDT 70 billion (7,000 crore) lower than that of the current fiscal year.

As there is no national parliament, finance adviser Salehuddin Ahmed will present the upcoming budget via a televised broadcast.

The budget will be declared through a Presidential Ordinance.

In accordance with customary procedure, finance ministers of political governments present the budget in parliament; however, given the absence of a political administration, this will not take place this year.​

 

[Saif]

FY26 BUDGET: Task force’s advice, safety net, inflation in focus

The national budget for the 2025-26 financial year will accommodate major recommendations made by a task force on economy to tame inflation and expand the social safety net by bringing about major changes in the public spending and...

www.newagebd.net

FY26 BUDGET: Task force’s advice, safety net, inflation in focus
Shakhawat Hossain 24 April, 2025, 23:29

The national budget for the 2025-26 financial year will accommodate major recommendations made by a task force on economy to tame inflation and expand the social safety net by bringing about major changes in the public spending and resource mobilisation, said finance ministry officials.

The interim government formed the task force as part of its efforts to bring the country’s economy back on track after the autocratic Awami League regime, which was ousted in a mass uprising on August 5 past year, sent the economy into tailspin, they said.

The task force on January 30 submitted its report titled ‘Re-strategising the economy and mobilising resources for equitable and sustainable development’ with a host of recommendations on the national budget which suffered immensely due to corruption, inefficiency and wastage of resources during the Awami League regime.

The finance ministry officials said that directives had already been given to all ministries and divisions through a circular to follow the basic principles and task force’s recommendations to set up the projections on resource mobilisation and expenditure.

The other principles include poverty reduction, human resource development, mitigating the climate change, maximum uses of resources and keeping balance between the growth in gross domestic product and the overall budget outlay, they said.

Centre for Policy Dialogue executive director Fahmida Khatun termed the Finance Division’s moves positive against the backdrop of the shortage of resources because of a chronic revenue shortfall.

Things are moving towards right directions, said the CPD executive director, also a member of the task force, referring to recent reports that the interim government is likely to announce a downsized outlay of Tk 7.9 lakh crore for the FY26 to reduce dependency on borrowing to meet budget deficit.

The AL regime in its last budget had announced a Tk 7.97 lakh crore budget for FY25, but the interim government revised down it to Tk 7.4 lakh crore, slashing the annual development programme to Tk 2.16 lakh crore from initial Tk 2.65 lakh crore.

One of the major recommendations of the task force led by former Bangladesh Institute of Development Studies director general KAS Murshid was the maintaining of fiscal discipline.

‘The fiscal policy must be aligned with the monetary policy to manage expectations about inflation. If the government runs large fiscal deficits and borrows excessively, the situation can lead to higher inflation expectations, as people fear that an excessive money supply growth will drive up prices,’ according to the report by the task force.

Former World Bank Dhaka office chief economist Zahid Hussain termed the task force recommendation correct since the expansionary fiscal measures by the immediate past political regime made the contractionary monetary policy ineffective.

High inflation has become entrenched in recent years, he said.

The annual average inflation is expected to accelerate to 10.2 per cent in FY25, from 9.7 per cent in FY24 and 9 per cent in FY23, said the Asian Development Bank in its recent outlook regarding Bangladesh.

To offset inflationary pressure on majority of the people, the task force recommended prioritising poverty reduction-focused programmes such as old-age allowances, disability benefits, mother and child benefit schemes, and food security interventions targeting poor and vulnerable groups.

Terming the social protection allocations inflated because of the presence of pension for retired government employees and their families, savings certificate interest assistance and procurement of equipment for search, rescue operation and emergency communication for earthquake and other disasters among the list of 24 in the funds, the task force called for maintaining international standard to operate social security programme.

The Finance Division set side 2.5 per cent of the GDP and 17 per cent of the national budget on social protection spending in the national budget for FY25.

However, when the programmes under the list are excluded, the allocation drops to only 1.2 per cent of the GDP and 7 per cent of the budget, said the report.

The World Social Protection Report 2024–26, published by the International Labour Organisation estimated that Bangladesh spent just 0.9 per cent of its GDP on social protection, which is markedly below the South Asian regional average of 3.8 per cent as well as the averages of 4.2 per cent and 8.5 per cent for lower-middle-income and upper-middle-income countries respectively.

The task force focused on the annual development programme, saying that the policy priority for the government would be to set its size at a manageable level and seriously address the capacity constraints and inter-agency and aid coordination problems.

It also suggested the separation of tax policy and operational services of the National Board of Revenue, automation of the collection system of taxes and levies, abolishing zoning system and capacity building of the NBR among the resource mobilising steps.

The country’s tax revenue as a percentage of the GDP has been declining, hitting 8.6 per cent in 2022-23, the lowest in South Asia. The low tax-GDP base has been concerning as the resource shortfall prevented the successive governments from higher spending on important sectors like education, health and social safety net.

The introduction of bonds in the future has also been suggested by the task force to meet the financing with the country’s graduation from the least developed countries’ bloc in 2026.

Fahmida said that some of the recommendations should be implemented on the short-term basis while the others on the mid- and long-term basis.​