[🇧🇩] Budget for 2026

[Saif]

Finance Adviser to unveil FY26 budget on Jun 2

Finance Adviser Dr Salehuddin Ahmed will present the national budget for the fiscal year 2025-26 on June 02 (Monday), according to a government handout. This marks the first budget of the interim government that assumed power following the mass public uprising on August 05. The pre-recorded budge

thefinancialexpress.com.bd

Finance Adviser to unveil FY26 budget on Jun 2

FE REPORT
Published :
May 30, 2025 08:16
Updated :
May 30, 2025 08:16

Finance Adviser Dr Salehuddin Ahmed will present the national budget for the fiscal year 2025-26 on June 02 (Monday), according to a government handout.

This marks the first budget of the interim government that assumed power following the mass public uprising on August 05.

The pre-recorded budget speech will be aired at 4:00 PM on Bangladesh Television (BTV) and Bangladesh Betar.

To ensure wider reach, all private television channels and radio stations have been requested to broadcast the speech simultaneously by receiving the feed from BTV.

People familiar with the development told the FE that that the size of the upcoming budget has been set at Tk 7.9 trillion-Tk 70 billion less than the budget for the previous fiscal year.

According to officials from the Ministry of Finance and the Planning Commission, the contraction in expenditure aims to meet conditions set by the International Monetary Fund (IMF), reduce the number of non-essential projects, and contain the higher inflation persisting the economy for long.

With the Eid-ul-Azha public holidays scheduled from June 05 to 14, authorities have opted to announce the budget earlier, on June 02. Usually the budget is unveiled on Thursday and the post budget press conference on Friday.

As the National Parliament is not currently in place, the Finance Adviser will present the budget through electronic media.

A presidential ordinance will subsequently be issued to formally enact the budget, in line with procedures applicable under the interim government.​

 

[Saif]

Budget amid lower growth

For the third consecutive year, the country's economic growth rate has declined, reflecting the sluggish trend in the overall development scenario. The national statistical agency released the primary estimate of the Gross Domestic Product (GDP) for the current fiscal year (FY25) last week. I

thefinancialexpress.com.bd

Budget amid lower growth

Asjadul Kibria
Published :
May 31, 2025 23:55
Updated :
May 31, 2025 23:55

For the third consecutive year, the country's economic growth rate has declined, reflecting the sluggish trend in the overall development scenario. The national statistical agency released the primary estimate of the Gross Domestic Product (GDP) for the current fiscal year (FY25) last week. It showed that the GDP growth rate declined to 3.97 per cent in FY25 from 4.22 per cent in FY24. Earlier in FY23, the growth rate was 5.78 per cent, significantly lower than 7.10 per cent in FY22.

The latest decline in the growth rate is predictable and also realistic. Unlike the previous years when the now-ousted Hasina regime used to manipulate data to show inflated figures of economic growth, no such thing happened this time. The national statistical agency collects, calculates and releases the data of national accounts independently and professionally.

The provisional estimate of GDP growth of around 4 per cent is close to projections made by three international financial institutions. The World Bank projected that Bangladesh's economy would grow by 3.30 per cent in the current fiscal year. The International Monetary Fund (IMF) predicted a figure of 3.76 per cent, while the Asian Development Bank (ADB) mentioned 3.90 per cent. The Bangladesh Bank, the country's central bank, projected that the economic growth rate may hover at the 4.0 to 5.0 per cent range in FY25. Bangladesh Bank, in its half-yearly Monetary Policy Statement (MPS), released in January last, also cautioned that the growth outlook did not appear optimistic due to various challenges.

The latest estimate also showed that the agriculture growth rate declined sharply to 1.79 per cent in the current fiscal year from 3.30 per cent in the past fiscal year. The poor performance of farm activities had a significant impact on overall economic output. The services sector also experienced sluggish growth in the current fiscal year, recording a modest growth of 5.09 per cent from 5.37 per cent in FY24. The industrial sector, however, posted a modest rise in growth to 4.34 per cent in FY25 from 3.51 per cent last year.

One needs to keep in mind that the current fiscal year began amid heavy turbulence due to a student-led mass uprising against the oppressive rule of Sheikh Hasina. To supress the mass movement, the autocratic regime resorted to brutal killings, and at least 1,400 people sacrificed their lives. More than 20,000 people were injured, and many were intimidated by the brutal force of the Hasina regime. Nevertheless, the mass uprising finally compelled her to step down and flee on August 5 to take shelter in India. On August 8, an interim government took charge led by Nobel laureate Professor Muhammad Yunus. It took a couple of months to restore law and order and bring business back to normal, although economic activities, severely disrupted during July and August, have been struggling to recover fully.

The interim government has, however, initiated several reform measures to fix the various loopholes in the country's macroeconomic management. During the Hasina regime, poor governance led to an increase in bad loans, making the financial sector vulnerable and fuelling capital flight from the country. Data manipulation was also widespread to conceal the weaknesses of macroeconomic mismanagement, such as the sharp depletion of foreign exchange reserves. Fixing the problems within a short period is difficult, and the interim government has faced a daunting challenge in doing so.

Against this backdrop of sluggish economic growth and fractured economic management, finance adviser Dr Salehuddin Ahmed will present the national budget for the next fiscal year (FY26) tomorrow. It will be a televised placement as there is no parliament in the country. The finance adviser is likely to keep the budget outlay at Tk 7.0 trillion, which is 12 per cent less than the original outlay of the FY25 budget, which was Tk 7.97 trillion.

The core challenge for the finance adviser is to focus on containing inflationary pressure, creating environment for investment, and providing rooms for job creation. As the interim government is not obsessed with growth, it gives him some necessary space to manoeuvre the fiscal measures. The indication is already there that the adviser has decided to reduce duties and value-added taxes (VAT) on a good number of products and services. The minimum threshold of tax-free income will also be increased to adjust the real income with high inflation. With the continuation of the tight monetary stance to contain inflation, well-coordinated fiscal measures will ease the pressure of inflation in the near future.

The budget is faced with a pressing challenge-the urgent need to create sufficient jobs for the millions of people in the country. According to the International Labour Organization (ILO), Bangladesh has a labour force of 71 million, with a labour participation rate of 49.5 per cent. The youth unemployment rate is a staggering 16.8 per cent, and the share of youth not in employment, education or training is a concerning 30.9 per cent. The ILO's recent caution that youth unemployment in Bangladesh is expected to remain high further underscores the urgency of the situation. The finance adviser's plan for job creation, to be revealed tomorrow after the budget is presented, is eagerly awaited.

To create necessary jobs for millions of youths, the country needs more investment in the manufacturing and services sectors. The provisional estimate of BBS showed that the investment-GDP ratio declined to 29.38 per cent in the current fiscal year from 30.70 per cent last year. The alarming thing is that the ratio of private investment declined sharply to 22.48 per cent from 23.96 per cent during the period under review. This decline in private investment has a direct impact on job creation, as it hampers the growth of businesses and the expansion of job opportunities. The decline in investment is a reflection of lower business confidence, and the trend has been persisting for the last couple of years. The net inflow of annual foreign direct investment (FDI) also declined by 13 per cent last year, marking the third consecutive year of a decline in foreign investment. Therefore, the next budget needs to outline some visible measures to attract investment.

It's important to remember that budgetary measures alone are not enough to attract investment. A stable socio-political environment is equally crucial. Investors, particularly foreign investors, seek stability to ensure the sustainability of their investments in the medium and long term. While the interim government's efforts to improve the investment climate are commendable, the current situation has yet to provide a positive signal for long-term investment. If the dust takes longer to settle, the rise in investment will inevitably be delayed.​

 

[Saif]

Rollback of protective taxes begins under new budget

An envisaged rollback of protective taxes on 'made-in -Bangladesh' package of products begins in the upcoming fiscal year with the planned levying of standard 15-percent VAT on all goods after 2030. Local manufacturers of blender, juicer, rice cooker, oven, mobile-phone set, sanitary ware, m

thefinancialexpress.com.bd

Preparing for post-graduation free- trade regime
Rollback of protective taxes begins under new budget
Tax package for 'Made-in-Bangladesh' products to be phased out

Doulot Akter Mala
Published :
Jun 01, 2025 00:25
Updated :
Jun 01, 2025 00:25

An envisaged rollback of protective taxes on 'made-in -Bangladesh' package of products begins in the upcoming fiscal year with the planned levying of standard 15-percent VAT on all goods after 2030.

Local manufacturers of blender, juicer, rice cooker, oven, mobile-phone set, sanitary ware, motor vehicles, and three-wheelers may come under the fiscal plan.

Also, income tax for corporate taxpayers, irrespective of being in profit or loss, is poised to go up to 1.0 per cent from the existing 0.6 per cent.

The tax is known as 'unjust' one in the corporate world as losing concerns are compelled to pay the tax, known as 'turnover tax'.

The Finance Ordinance 2026 ratifying the new budget under the current interim government may come with these significant changes tomorrow (June 2, 2025).

Chairman of Policy Exchange Bangladesh Dr Masrur Reaz hails the move to phase out rather than sudden imposition of high taxes.

"I welcome the move that government has not slapped high tax overnight and is coming with a phase-out plan. It would give investors a comfort," he told The Financial Express.

However, he finds the minimum tax against the principle of direct taxation that must apply to income.

"It's a fundamental question whether such tax should exist or not. Increasing the tax looks like nailing the coffin that would hurt small businesses," he observes.

Tax officials say corporate income-tax benefit for 'Made in Bangladesh' would continue as per Statutory Regulatory Order, issued in 2021.

A senior official of the NBR says the tax-expenditure policy 2025, issued earlier, has capped tax benefit for maximum five consecutive tax years which the revenue authority has to follow from the forthcoming fiscal year.

"As VAT exemptions were given for the current FY, it is easier to phase out while it is difficult for income tax to impose such tax now as the tax waiver was offered for 10 to 20 years in 2021," he adds.

Under the plan, an industry enjoying the zero-rated VAT under the package would have to pay 5.0-percent tax for next two years followed by 7.5 per cent in FY2027-29 and 10 per cent for only FY2030 and 15 per cent from FY31.

However, some of the items, including essential items, rice, pulses, green vegetables etc, would continue to enjoy tax exemptions.

Manufacturers of high-end battery would get VAT waivers for next two years and pay 5.0 per cent for the remaining three years until 2030.

Any investors willing to establish hospitals would enjoy VAT exemptions on import of many items and waiver at local stage, the official says.

Also, sanitary napkin would enjoy VAT exemption until 2030 on both import of raw materials and local manufacturing stage.

"Investors would get a predictable VAT structure to plan their business-operation cost," the official says, detailing the new fiscal measures.

He notes that wide-spread allegations over lack of predictability in tax structure would be resolved with the step.

Currently, motor-cars, three- and four-wheelers, home and kitchen appliances and light -engineering products, some IT hardware are enjoying tax benefits under the made- in - Bangladesh campaign.

In 2021, tax exemption was given to automobiles for 20 years, to different home appliances for 10 years and to agro-products, light engineering and IT hardware for 10 years.

Officials have said the government has pressure from development partners to increase country's tax-to-GDP ratio mobilising more domestic resources.

As per International Monetary Fund (IMF) conditions, the revenue board will have to collect Tk 3.0 billion from policy measures and Tk 1.0 billion from administrative measures by the next fiscal year.

The tax-expenditure policy defines that only parliament would be empowered to offer any type of tax exemptions.

The policy has tightened tax-breaks by barring any agency or authority but the government revenue board from placing any tax-exemption issue before parliament.

The draft framework, obtained by the FE, is an integrated one comprising income tax, customs and value-added tax (VAT) wings.

For transfer of land, the purchasers would be able to enjoy a pared-down 15-per cent tax on capital gains for five corresponding years. Thereafter, the tax rate would be determined on the regular tax slab.

Despite upward revision of tax-free income ceiling, individual taxpayers in the first slab would have to pay higher taxes with the upward revision of tax rate to 10 per cent from 5.0 per cent.

Currently, individual taxpayers exceeding Tk 3.8 million in annual income would be required to pay 30-percent tax and the threshold would be lowered down to Tk 3.5 million.

Tax liberty is also planned to be squeezed in the run-up to Bangladesh's graduation from the LDC status, set for next year, after which the country would have to lose many trade benefits on the global market.​

 

[Saif]

Surprise unlikely in upcoming budget: Debapriya

Distinguished Fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya on Saturday said as there are no significant initiatives for recovering defaulted loans, bringing back laundered money, or expanding the tax net there’s no real surprise in the proposed budget. Recovering

thefinancialexpress.com.bd

Surprise unlikely in upcoming budget: Debapriya

Published :
May 31, 2025 16:33
Updated :
May 31, 2025 17:39

Distinguished Fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya on Saturday said as there are no significant initiatives for recovering defaulted loans, bringing back laundered money, or expanding the tax net there’s no real surprise in the proposed budget.

Recovering embezzled money, laundered funds and defaulted loans during the previous regime could serve as an innovative source of revenue in the upcoming national budget, he said, UNB reports.

He made the remark while speaking at a pre-budget shadow parliament session organised by Debate for Democracy at the Bangladesh Film Development Corporation (BFDC).

The upcoming budget seems to follow a conventional path with little scope for newness, he said.

Debapriya highlighted both the achievements and challenges of the current government’s economic management.

He said the government’s major success in recent times has been reducing the pressure of foreign debt by repaying $5 billion, which had been steadily increasing year after year under the previous government.

“The immediate past government left the country in a precarious situation with heavy foreign debt,” he said.

Debapriya praised the current government’s efforts in managing the external sector, including remittance inflows, export earnings, debt servicing, reserve accumulation, and exchange rate stability.

Criticising the existing development projects, he said that many are overvalued and nearly 40 percent of the expenditures are fictitious.

“The projects responsible for financial outflow in the past continue unabated,” he added.

Debapriya also stressed the need for proper management of revenue expenditure to build trust among taxpayers.

“Our tax system remains inequitable,” he said, adding that while some macroeconomic stability has been achieved in the external sector, private sector investment and domestic economic stability are still far from satisfactory.”

Debate for Democracy Chairman Hasan Ahmed Chowdhury Kiron presided over the session.​

 

[Saif]

Govt to unveil Tk 7.9t national budget on June 2 amid economic challenges

The interim government is set to unveil a Tk 7.9 trillion national budget for the 2025–26 fiscal year on June 2, a defining moment for Bangladesh as it navigates mounting economic pressures and charts a course for stability and growth. Finance Adviser Dr Salehuddin Ahmed will deliver the bud

thefinancialexpress.com.bd

Govt to unveil Tk 7.9t national budget on June 2 amid economic challenges

FE ONLINE DESK
Published :
May 31, 2025 14:05
Updated :
May 31, 2025 14:21

The interim government is set to unveil a Tk 7.9 trillion national budget for the 2025–26 fiscal year on June 2, a defining moment for Bangladesh as it navigates mounting economic pressures and charts a course for stability and growth.

Finance Adviser Dr Salehuddin Ahmed will deliver the budget speech in a pre-recorded broadcast scheduled for 4:00 pm on Bangladesh Television (BTV) and Bangladesh Betar.

Private television channels and radio stations have been requested to air the speech simultaneously, using BTV’s official feed.

This will be the first budget to be presented by the newly appointed administration, which faces the daunting task of curbing persistent inflation, reinvigorating private investment and strengthening social safety nets amid global and domestic uncertainties, as per a UNB report.

In contrast to previous years, the proposed budget is Tk 0.07 trillion lower than the current fiscal year’s allocation of Tk 7.97 trillion.

According to Finance Ministry officials, this reduction aligns with a strategy for fiscal consolidation, ensuring a more implementable and efficient financial plan.

The projected budget deficit stands at Tk 2.26 trillion, down from Tk 2.56 trillion in the current fiscal year, representing 3.62 per cent of the GDP.

To bridge this gap, the government will depend on foreign borrowing, bank loans, and savings certificates.

An ambitious GDP growth target of 5.5 per cent has been set for FY26, slightly higher than the revised 5.25 per cent for the current year. However, international financial institutions, including the World Bank, IMF and ADB, predict growth will remain below 5.0 per cent.

Inflation control remains a priority, with the government aiming to bring it down to 7.0 per cent. However, economists warn that persistent inflationary pressures could pose risks to achieving this target.

To alleviate the financial strain on lower-income groups, the budget includes an expansion of social safety net programs, increasing both beneficiary numbers and allowance amounts.

Key sectors prioritised for funding include agriculture, health, education and technology.

The Annual Development Programme (ADP) allocation is projected at Tk 2.3 trillion, a reduction from Tk 2.65 trillion in the current fiscal year, signifying a more focused investment approach.

Dr Salehuddin Ahmed has assured that the upcoming budget will be business-friendly, introducing tax policies designed to enhance investment, GDP growth and job creation.

The revenue collection target for FY26 is set at Tk 5.18 trillion, up from Tk 4.8 trillion in the current fiscal year. But, the IMF has recommended a more aggressive target of Tk 5.8 trillion under its reform agenda.

Non-development expenditures will rise, with major allocations earmarked for debt servicing, food subsidies, and banking sector reforms.

The non-development budget is expected to reach Tk 5.6 crore, an increase of Tk 0.28 trillion compared to the current fiscal year’s allocation.

The government also plans to strengthen the banking sector with a dedicated allocation to cover the capital shortfall of state-owned banks. Besides, subsidies for agriculture, fertilisers, and electricity will continue to support key industries.

As anticipation builds for the budget announcement, public sentiment is mixed—hopeful about stronger social safety nets and inflation control, yet wary of implementation challenges.

Economists caution that without structural reforms and effective execution, the budget’s ambitious goals may be difficult to achieve.

They advocate for enhanced wealth taxation and improved enforcement mechanisms to broaden direct taxation and minimise dependence on regressive indirect taxes.

The budget presentation by Finance Adviser Dr Salehuddin Ahmed will be closely scrutinised, as it is expected to shape Bangladesh’s economic recovery and growth in the post-uprising political transition era.​

 

[Saif]

Budget to have little reflection of reform recommendations

Experts said the lack of capacity for reforms and the absence of political will – both can be key reasons behind the situation.

en.prothomalo.com

Budget to have little reflection of reform recommendations
Fakhrul Islam Dhaka
Published: 31 May 2025, 16: 52

A representational image of budget for 2025-26 fiscal year.

The upcoming budget for the 2025-26 fiscal year will have no significant reflection of the reform recommendations made by the task force and committees related to economic affairs.

There will be no new economic roadmap either. Rather, the budget management will largely remain the same as in previous years, according to sources in the finance division of the finance ministry.

Experts said the lack of capacity for reforms and the absence of political will – both can be key reasons behind the situation. Therefore, another conventional budget is going to be announced under the leadership of finance adviser Salehuddin Ahmed. However, a notable difference is that the adviser is planning to deliver a shorter budget speech.

After the political changeover in August last year, a white paper formulation committee was formed under the leadership of Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD). Besides, the authorities formed a task force to redefine economic strategy, with former BIDS director general KAS Murshid as its chief.

The white paper committee submitted a 397-page report and the task force a 526-page report to chief adviser Professor Muhammad Yunus. Later, another committee was formed to reform the National Board of Revenue (NBR), and it managed to prepare an interim report only, instead of a comprehensive one.

Now, the finance division is not considering the recommendations while drafting the budget, leading to a concern over the future of economic reforms. The finance division officials said the budget will have instructions for implementation of some recommendations, while some proposals will be left for the next budget. The finance division believes that scopes for true reforms are limited unless there is an elected government.

What will happen to the white paper recommendations

The white paper committee recommended a two-year action plan, in addition to some short-term steps. Among the initiatives are to restore economic stability, prepare for FY 2026–27 alongside the upcoming year, determine reform priorities, formulate strategies for LDC graduation, accelerate progress toward SDGs, and initiate dialogue with development partners. But the upcoming budget will have no concrete steps to implement these recommendations.

In a speech on 16 December last year, chief adviser Professor Muhammad Yunus referred to the white paper report, saying the people were stunned by its findings. He noted that the public sensed economic damage under the previous fascist government, but the actual scenario was unknown until the report quantified it. The chief adviser also said the GDP growth rates shown in recent years were exaggerated and misleading.

Citing the chief adviser’s remarks, the white paper formation committee chief Debapriya Bhattacharya told Prothom Alo that the GDP growth figures from BBS were based on outdated data. “The chief adviser categorically stated that the figures were not accurate, but the upcoming budget is being drafted based on them. Here, I see a contradiction between the budget formulation and the chief adviser’s policy.”

The economist added that the finance adviser continued within the fascist framework. He revised the current budget, lowered revenue targets, and relied on indirect taxes for the next fiscal year, but refrained from clarifying the criteria of including or excluding priority projects.

Noting the parliamentary obligation to disclose quarterly updates, Debapriya also questioned why no quarterly economic statements were made, even though there is no parliament. “If it is not done, how will the people know if the government is doing good or bad?”

The task force recommended introducing a progressive tax system to increase taxes on the wealthy, boosting allocations for education and healthcare, and making services more accessible. It also proposed dividing Biman Bangladesh into two entities, and privatising one. The budget will have no initiative to implement this proposal.

The task force suggested nurturing around 1,500 export firms that earn over USD 1 million annually, but there will be no initiatives in this regard in the budget.

However, contractionary monetary policy is being maintained to control inflation as well as restore economic stability. The foreign currency reserve is now in relatively good shape, and its decline stopped before the new budget. Experts believe it remains a big challenge how these positive indicators can be used for real economic growth.

How will the economic strategy committee proposals be addressed?

KAS Murshid, the chief of the economic strategy redefining committee, said they expect some of their recommendations to be included in the upcoming budget, especially those over making AI and digital technologies more accessible in agriculture, industry, education, and healthcare.

He, however, remains doubtful about the fate of many significant proposals in the budget, including splitting Biman or supporting 1,500 exporters.

Future of NBR reforms

It is unknown how long the NBR reform committee may take to submit its report. Still, the government has already divided the NBR into two entities – policy department and implementation department – on the advice of the IMF. In the face of protest from the NBR officials, the government has now decided to amend the ordinance that divided the NBR.

When asked if there is anything new in the budget, a senior finance division official said, “Definitely. A special fund will be formed in the next budget to implement the recently promulgated Bank Resolution Ordinance.”

In this regard, finance adviser Salehuddin Ahmed told Prothom Alo over the phone last night, “It is not right that we have not taken recommendations from the white paper committee and the task force. We have taken into account their suggestions on money laundering prevention.”

He further said reality does not permit taking all the recommendations into account, and everything cannot be included in the budget. They have due respect to the significant recommendations, but those could not be considered due to practical constraints and limitations.​