[🇧🇩] Budget for 2025- 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.​

 

[Saif]

Interim govt unveils its maiden Tk 7.9t budget today

Post-uprising interim government is set to present today its maiden national budget worth Tk 7.9 trillion for the fiscal year 2025-26, avowedly aligned with reforms and income parity. With no functioning parliament existing following the July-August changeover, the budget will be presented at 3.00

thefinancialexpress.com.bd

Interim govt unveils its maiden Tk 7.9t budget today
Aligned with reforms, intended income parity

FE REPORT
Published :
Jun 02, 2025 01:24
Updated :
Jun 02, 2025 01:24

Post-uprising interim government is set to present today its maiden national budget worth Tk 7.9 trillion for the fiscal year 2025-26, avowedly aligned with reforms and income parity.

With no functioning parliament existing following the July-August changeover, the budget will be presented at 3.00pm outside Jatiya Sangsad (national parliament) and broadcast simultaneously on state-run BTV and other private media outlets.

Finance Adviser of the interim government Dr Salehuddin Ahmed will roll out the budget through a pre-recorded speech.

For the first time since the independence of Bangladesh, the national budget is being contractionary compared to the previous years, as the current government walks a tightrope in the given situation marked by economic disruptions because of political unrest.

The last budget, presented under the Awami League government by former Finance Minister Abul Hasan Mahmud Ali, was Tk 7.97 trillion in size for the outgoing fiscal year 2024-25.

People familiar with the developments told the FE that the interim administration would prioritise restoration of macroeconomic stability, with a focus on curbing wayward inflation.

According to the Ministry of Finance, the upcoming budget will incorporate welfare initiatives to expand social-safety nets -- both by increasing the number of beneficiaries and the size of allowances -- and to create employment opportunities, particularly in rural areas.

Infrastructure development, especially road construction and renovation, will be stimulated to support this effort.

The Awami League government collapsed on August 05 following a student-mass uprising, leaving a vacuum filled with this interim government headed by Prof Yunus as Chief Adviser.

However, budget documents will be made available on the Finance Division's official website.

A similar budget presentation outside parliament also happened earlier under military or military-backed governments.

On June 09 of that 2009, the then Finance Adviser Dr AB Mirza Md. Azizul Islam unveiled a Tk 999.62-billion budget for FY2008-09.

That presentation also took place on a Monday and at 3:00pm and was broadcast via Bangladesh Television and Bangladesh Betar.

During the four consecutive terms of the Awami League, Abul Maal Abdul Muhith had presented the budget 10 times, AHM Mustafa Kamal five times, and Abul Hasan Mahmud Ali once -- spanning a total of 15 years and a half. All of those budgets were presented in parliament.

Later, the proposed budgets were discussed in the parliament for a month. The budget for the new fiscal year would have been passed by the parliament by the end of June. Since there is no parliament, there is no opportunity for discussion or debate on this budget.

However, after the budget is announced, the Ministry of Finance will seek opinions from citizens on the proposed budget, according to finance division officials.

They say there will be a menu on the finance division website to get public feedbacks on the budget.

It will be finalised based on the opinions. Thereafter, it will be approved by the Advisory Council in its meeting to be held under the chairmanship of Chief Adviser Prof Yunus any day after June 23, and will be implemented in the form of a presidential ordinance from July 01, 2025.

Saifur Rahman, the former Finance Minister of Bangladesh Nationalist Party (BNP) government, presented a total of 12 budgets during his three terms in office.

His ministerial tenure spanned December 1976 to October 2006. He served in three different governments and was the longest-serving Finance Minister of Bangladesh. He presented these 12 budgets between 1980-1981, 1991-1996, and 2001-2006.​

 

[Saif]

First budget under interim govt today

The national budget for the financial year 2025-26, with an overall outlay of about Tk 7.9 lakh crore, will be announced today amid expectations for prudent fiscal measures in line with the spirit of the July mass uprising that ousted the autocratic Awami League regime...

www.newagebd.net

First budget under interim govt today
Expectations run high amid multiple challenges
Staff Correspondent 01 June, 2025, 20:52

The national budget for the financial year 2025-26, with an overall outlay of about Tk 7.9 lakh crore, will be announced today amid expectations for prudent fiscal measures in line with the spirit of the July mass uprising that ousted the autocratic Awami League regime in the past year.

The total new budget outlay will be Tk 7,000 crore less than the original size of Tk 7.97 lakh crore announced in June 2024 for the outgoing financial year 2024-25. As the outgoing budget is expected to be revised at Tk 7.44 lakh, the new budget will be higher by Tk 46,000 crore.

Finance adviser Salehuddin Ahmed will announce the fiscal measures, aimed at collecting around Tk 5.6 lakh crore in revenue for FY2025-26, on the television and radio live from 3:00pm.

The national annual financial document has been titled as ‘budget for ending discriminations with special focus on the country’s graduation from the least developed countries’ block in the next year and easing the price hike of essentials and expansion of social safety net programme’, according to Finance Division officials.

The first budget under the interim government that assumed office on August 8, 2024 is coming against the backdrop of multiple challenges like inflation, unemployment, rising poverty, low revenue generation, and a slowdown in both public and private investment.

The political uncertainties over the next general elections, changing geo-politics, strained relations with neighbouring India, the Rohingya issue, and climate change will also be challenging for the finance adviser to implement the fiscal measures.Political party merchandise

Unlike the finance ministers in the past two financial years, the finance adviser will announce the fiscal targets in a much better macroeconomic situation marked by stability in exchange rate, upward forex reserves, high inflow of remittance, and almost a double-digit export growth.

Besides, the global commodity market is expected to remain favourable for import-dependent Bangladesh while the government has been struggling with the growing subsidy on food, fertiliser, and fuel oils over the past three years.

The World Bank meanwhile in its commodity market outlook released in April said that commodity prices were set to fall sharply in the current calendar year -- by about 12 per cent overall -- as weakening global economic growth weighs on demand.

Besides, commodity prices were projected to decline in the next calendar year -- by another 5 per cent -- hitting a six-year low.

The interim government has already decided to implement only economically viable projects under a smaller annual development programme, worth Tk 2.3 lakh crore, with main focuses on improving the implementation rate and quality of the projects.

A host of innovative measures have also been expected by the finance ministry officials to generate greater revenue and ensure an easy release of the remaining loan tranches under the current $4.7 billion International Monetary Fund loan programme that started in 2023 during the ousted AL regime to support the balance of payment.

The reliance on the other multilateral and bilateral lenders is expected to remain almost the same to meet the budget deficit that is likely to stay around 3.5 per cent of the gross domestic product.

Finance ministry officials said that they were expecting to receive Tk 1.5 lakh crore in loans from external sources while the rest Tk 1.21 lakh crore from domestic sources to make up the deficit.

Going for a smaller ADP in the context of resource shortage and lax capacity, the finance adviser is likely to find few clues to check the growing non-development budget, which will be around Tk 4.8 lakh crore this time.

The interest payment alone for the domestic and external borrowing will take almost one-fourth of the non-development budget.

Moreover, the interim government is considering providing dearness allowance to the public employees, for which some Tk 7,000 crore would be required in the new financial year.

On Sunday, the finance adviser told reporters at his secretariat office that he was expecting to announce an acceptable budget for all.

He also said that they would get more than two weeks for stocktaking on fiscal measures with the aid of newspapers, electronic media, businesses, chamber bodies, associations and academics.

Officials said that the finance bill is expected to be promulgated after it is approved by the advisory council in a meeting on June 22.​

 

[Saif]

A budget without illusions

No soaring GDP promises. No obsession with mega projects. No grand applause in parliament. This year, it’s just the finance adviser and his unemotional speech to be broadcast in the quiet hum of state television.

www.thedailystar.net

A budget without illusions
In a year stripped of spectacle, interim govt set to deliver an outlay shaped by restraint, realism and possibly, reform

No soaring GDP promises. No obsession with mega projects. No grand applause in parliament. This year, it's just the finance adviser and his unemotional speech to be broadcast in the quiet hum of state television.

Today, Salehuddin Ahmed will go on air at 3:00pm to deliver the first budget of the interim government -- and the first of his life. There will be no fanfare, but a nation listening in measured anticipation. It's the first realistic budget in years, if you like, precisely because it will offer a long-overdue fiscal detox.

As expected, Ahmed will speak plainly of endurance and hard choices. A nation long fed on big promises will possibly hear the "language of realism" -- something stripped of illusion. The budget will run a razor-thin 3.6 percent deficit, the leanest in more than a decade, marking a sharp departure from the looser fiscal stance of the past. It will be a day of reckoning about the controversial legacy left by the previous regime.

Ahmed will understandably seek to break with the past and, in a rare gesture of restraint, will trim the overall outlay by Tk 7,000 crore down to Tk 790,000 crore for the new fiscal year. It's not a dramatic cut, but a deliberate signal that the belts are being tightened.

A leaner budget doesn't have to ignore key areas, though. If it chooses, it can channel that power into public investments in education, healthcare and essential infrastructure for long-term prosperity. To spend or not to spend is not merely a fiscal choice; it is a political one. Yes, the government holds the power of the purse. Spending must not be shackled by arbitrary ceilings or a blind devotion to the dogma of "sound finance".

One critical area long left in the margins is unemployment. It deserves more attention from this government than ever before, as it aligns with Chief Adviser Muhammad Yunus's vision for zero unemployment. For decades, the economy has grown -- but without growing jobs. It has built roads, buildings, and bridges, yet left millions without meaningful work. A job-scarce economy took shape in the shadows of progress, quietly eroding dignity and hope. Now, that silence can no longer be ignored. It is time -- long past time -- to confront the scourge of unemployment as a central test of the country's economic vision. Growth that does not employ is growth that forgets its people.

"A growing disconnect between the skills imparted by our education system and the requirements of the private sector continues to limit employment opportunities," said Selim Raihan, a professor of economics at Dhaka University. "At the same time, a significant portion of the workforce remains trapped in the informal sector, where job security and benefits are minimal or absent," he added.

The budget arrives at a moment when the political skies are overcast. Optimism is being tempered by uncertainty, as political parties continue to seek clarity on the election timeline. Discontent has begun to ripple outward.

Protests broke out at the National Board of Revenue over an IMF-backed ordinance, disrupting operations in the final stretch before budget day. Demonstrations hit the Dhaka South City Corporation over control of the mayoral office. Another wave of protest swept through the secretariat over yet another ordinance. All of it -- almost simultaneously.

NO FANTASY

In his pre-recorded speech, Ahmed won't peddle GDP fantasies. No rosy projections -- at least not this year. The government's growth forecast, 5.5 percent, lags behind even the IMF's cautious estimate. There will be no more chasing growth at any cost, no more hollow boasts.

Last week, Bangladesh Bureau of Statistics released its provisional estimate, and it confirmed what many feared. The economy in the current fiscal year grew just 3.97 percent, the slowest pace since the pandemic year. The slowdown came from within: agriculture.

Still, there's a big number on the table: Bangladesh's GDP is expected to cross $500 billion in the new fiscal year. Many will greet the estimate with scepticism, but in a year defined by restraint, it remains a milestone worth acknowledging.

Behind these numbers is a deeper story: a country in the midst of an economic reset. For the first time in years, the budget is being shaped by economic necessity, not political whims.

But some economists have voiced concern that the interim government has yet to design a clear roadmap for economic recovery. In their view, the numbers may be sober, even honest, but without direction, they risk drifting. A budget, they argue, is more than an annual ledger. It can be a moment, perhaps the best moment, to set out a coherent strategy for rebuilding, reforming and reimagining the economy.

The metrics of judgment will shift this year. Will subsidies continue? Only for food and agricultural inputs. Will infrastructure spending surge? Not likely. The focus will shift to what the rural economy needs, not what cities want.

"The government would do well to prioritise investment in labour-intensive sectors such as agro-processing, light engineering and ICT. A robust employment strategy that supports SMEs, promotes entrepreneurship, and expands access to vocational and technical training could make a meaningful difference," Raihan said.

And taxes? Ahmed's message leaves little room for ambiguity. "I'm in the mood to end every exemption," he said at an event on May 18. The age of selective generosity may be drawing to a close.

This government will not be judged by promises, but by the progress it makes on reforms. And reforms are never gentle. In the banking sector, the central bank acted swiftly, stamping out the first flames before they could swell into a full-blown inferno. Holding reckless banks to account requires more than policy — it demands quiet resolve. In this, Bangladesh Bank passed its first true test.

Now, this administration will aim to ensure stability in the financial sector and reduce inflation. With that foundation, the forthcoming budget will prioritise social sectors to boost employment and inclusive growth.

Amid rising food prices and intensifying climate shocks, the government also plans to expand its social protection programmes and fund food security initiatives, including subsidised food for low-income households. At the same time, agricultural transformation remains a core focus. Continued subsidies for mechanisation, irrigation, and seeds are aimed at rebuilding rural resilience and supporting smallholder farmers.

Debt Roulette

Bangladesh still shoulders the financial burdens of the old regime. Officially, the aim is to lower the country's debt risk from moderate to low, as Ahmed indicated. It's not a small feat.

Yet here's the paradox: foreign borrowing will rise. Not for flashy megaprojects or political vanity, but to keep the lights on while cleaning up the mess. The higher foreign borrowing target reflects bills that can't be dodged. Energy sector gaps need plugging. The ghosts of overpriced infrastructure still haunt the balance sheet.

In a year of belt-tightening and caution, exports and remittances brought much-needed relief. Trade deficits narrowed. The current account, long in the red, showed signs of healing. Even the balance of payments, often a mirror of external vulnerability, began to tilt in the right direction. Foreign reserves hold steady at $20 billion, a sign of resilience.

But the story isn't without shadows.

Imports have recovered, but only just. Machinery imports, a barometer of investment appetite, have fallen. Letters of credit for capital goods have declined, signalling hesitation in the economy.

Globally, the winds are shifting. The trading landscape is growing more turbulent. President Donald Trump's reciprocal tariffs introduce fresh uncertainty. Closer to home, India's rising non-tariff barriers threaten to constrict trade routes.

For all this, Bangladesh's ability to negotiate -- at home and abroad -- will be tested as never before. As the country moves toward LDC graduation in November 2026, the government will come under growing pressure to navigate the complex web of bilateral and multilateral negotiations that lie ahead.

The new fiscal year stretches like a steep mountain trail -- narrow, uncertain and demanding careful steps. In this fresh beginning, caution is the only sure path forward.​

 

[Saif]

Balancing economic revival, inflation prime promise

Nearly 10 months after inheriting a faltering economy marked by institutional collapse, many near-empty banks, fastest-depleting forex reserves and inflation running high, the interim government on Monday unveiled its maiden budget prepared taking ground realities into cognizance. The interi

thefinancialexpress.com.bd

INTERIM GOVT PLACES TK7.9T MAIDEN BUDGET AMID CHALLENGES
Balancing economic revival, inflation prime promise

Unemployment, inflation, sluggish investment, revenue ruckus main pains in govt's neck

Jasim Uddin Haroon
Published :
Jun 03, 2025 01:10
Updated :
Jun 03, 2025 01:10

Nearly 10 months after inheriting a faltering economy marked by institutional collapse, many near-empty banks, fastest-depleting forex reserves and inflation running high, the interim government on Monday unveiled its maiden budget prepared taking ground realities into cognizance.

The interim administration has succeeded in calming some nerves of the economy and the administration. But the core afflictions remain: unemployment lingers at worrisome levels, inflation still high, private investment remains sluggish, and the revenue authority faces unrest that poses a threat for mobilising resources.

It is against these tense, and uncertain backdrops that Finance Adviser Dr Salehuddin Ahmed, wearing black blazer and white shirt, stood before the nation to roll out his maiden budget-a sober and restrained document crafted not in the heat of political ambitions.

There was no fanfare, no grand political chorus but with some breaks-only the finance adviser's calm, clinical voice, carried over the quiet airwaves of state-owned Bangladesh television and Bangladesh Betar, and a scattering of private channels.

Presenting the Tk 7.9 trillion worth of national budget for the forthcoming fiscal year 2025-26, Dr Ahmed admits that there are many risks still associated with attaining stability and reviving the economy back to its normalcy.

It comes out for him as an act of balancing economic revival and persistently high inflation in the first place.

Inflation-neutral pivot of the budget from traditional growth-centric budgeting, in the context of July changeover: The fiscal posture of the proposed budget appears to tread a cautious line-inflation-neutral at best-but much hinges on how taxation is structured and how the yawning deficit is financed.

While a deficit of Tk 2.26 trillion may not be alarming in isolation, any sharp upward trajectory could ignite inflationary pressure, especially if borrowing spirals out of control.

Curiously absent from the finance adviser's address was any reference to supply-chain bottlenecks or the grip of middlemen and cartels over the food-distribution system, both widely acknowledged as drivers of food inflation.

Instead, the custodian of exchequer in the interregnum attributes recent moderation in inflation-hovering above 9.0 per cent in May-to the twin deployment of contractionary monetary policy and a tighter fiscal stance.

He projects that inflation would ease further to around 8.0 per cent this June, citing stability in the exchange rate under a market-based regime and expectations of an uptick in imports.

The adviser also mentions fiscal measures such as subsidies to the agricultural sector, though these are long-established and offer little in the way of innovation.

Crowding-out concerns: But deeper in the budget lies a potential hazard. A significant share-55 per cent of the fiscal deficit-is projected to be financed from domestic sources, with over 83 per cent of that through the banking system. Though this amounts to just Tk 50 billion more than the target for the outgoing fiscal year, the implications seem profound.

Without tangible deposit growth to counterbalance the financing burden, the risk of a crowding-out effect in financing lurks.

Banks, drawn to the relative safety of government borrowing instruments, may divert resources away from the private sector, stifling entrepreneurship and productive investment.

Employment and investment--still on shaky ground: Bangladesh's economy is grappling with stubbornly high unemployment, and the budget's promises do little to assuage those concerns.

Both public and private investments are needed to jumpstart job creation and catalyze economic momentum.

While the budget attempts to send policy signals to spur private investment-including a commitment to favourable interest rates and a stable inflation outlook-the practical enablers appear limited.

One-stop service and NBR's single-window initiative, while laudable, remain insufficient in overcoming structural hurdles to doing business.

"We are committed to identifying the existing obstacles to investment and removing them as soon as possible," the finance adviser assures. But rhetoric must now meet reform.

Youth, startups, and entrepreneurial spirit: A silver lining in the budget is a renewed emphasis on entrepreneurship. There are modest but promising allocations aimed at fostering a new generation of business leaders.

Dr Ahmed proposes the creation of a Tk 1.0-billion fund for new entrepreneurs, complemented by another Tk 1.0-billion one for startups-a continuation from previous budgets. An additional Tk 1.0 billion is earmarked for a youth festival, intended to encourage engagement and innovation among the younger demographic.

Moreover, the proposed Annual Development Programme (ADP) worth Tk 2.3 trillion may offer some employment opportunities for the poor, though the extent of its impact is likely to be limited.

Without bold reforms to unblock private-sector investment, address structural inflation triggers, and inspire entrepreneurial dynamism, the economy may struggle to turn its cautious optimism into real, equitable progress.

Ambitious revenue target faces tough realities: a test of reform and resolve: The upcoming fiscal year's total resource-mobilisation target has been set at an eye-popping Tk 5.64 trillion, with the lion's share-Tk 4.99 trillion or 9.0 per cent of GDP-expected to come from the National Board of Revenue (NBR).

But this towering ambition raises eyebrows across the board, as the NBR has never before achieved a target of such magnitude.

This underscores an urgent need for deep-rooted reforms, not just cosmetic adjustments.

Yet the NBR itself remains embroiled in internal road protests, over creating two distinct wings. If this institutional uncertainty persists, it could seriously undermine revenue-collection efforts, dragging down the lofty aspirations set out in the budget.

Despite these tensions, Finance Adviser Dr Ahmed reaffirms the government's intention to pursue reforms at the NBR. He stresses the significance of direct taxation-a sustainable and equitable source of revenue that also plays a critical role in reducing income inequality.

Efforts to modernize tax administration are underway. Mandatory online-return filing for all individual taxpayers is in the pipeline for the coming year, with similar digital systems envisioned for corporate entities in the near future.

Tax policy adjustments: a balancing act: In a nod to inflation-weary citizens, the tax-free income ceiling for individuals has been raised to Tk 375,000 from Tk 350,000-a modest adjustment but a meaningful gesture toward relief amid rising living costs. However, to offset the revenue implications, the lowest tax slab has been hiked from 5.0 to 10 per cent.

In a bid to instill a broader culture of tax compliance, a minimum tax of Tk 1,000 has been introduced for first-time taxpayers-an approach that may build discipline from the ground up.

Reforms beyond revenue: cleaning the institutional slate: The finance adviser acknowledges the necessity of sweeping structural changes, referencing 11 proposed reform commissions covering anti-corruption efforts, judicial independence, land-law modernization, and election commission reforms. These, he argues, are essential to restoring faith in public institutions.

In one of his most pointed remarks, Dr Ahmed laments the collapse of financial governance over the past 15 years, saying, "Millions of taka has been siphoned off from banks."

He decries the culture of "hide-and-seek" around non-performing loans (NPLs), suggesting past administrations obfuscated the true scale of the banking sector's malaise.

Social safety nets: missing efficiency: While the adviser underscores plans to increase both the number of beneficiaries and per-capita allocations under social-safety-net programme, he remains notably silent on efficiency reforms.

Past programmes have often suffered from poor targeting and political manipulation, allegedly dominated by cadres of the ousted Awami League government. No clear blueprint was offered for plugging leakages or improving targeting mechanisms.

Relief for the commoners: Still, the budget does offer some relief for the middle class and consumers. The threshold for excise duty on bank balances has been raised to Tk 300,000 from Tk 100,000-a move expected to reduce the burden on savers.

Moreover, several VAT exemptions have been announced-on LNG, packaged liquid milk, sanitary-napkin production, ballpoint pens, and computer monitors up to 30 inches-all of which may help ease cost pressures on households and small businesses.

Restoring investor confidence and governance: Efforts to revive capital- market participation have also been woven into the budget. The corporate-tax differential between listed and non-listed firms has been widened by 7.5-percentage points, a signal meant to lure local and multinational firms into the capital market.

The source tax on brokerage transactions has been cut to 0.03 per cent from 0.05 per cent.

But these incentives come at a precarious time-many listed companies are trading below their face value, and a large number have failed to declare dividends for years. The reforms must, therefore, be matched by stronger oversight and accountability in market operations.

A budget framed by upheaval: This is, in many ways, an acid test for the finance adviser, who assumed office in the wake of the July Mass Uprising. Rather than chasing high growth figures, the current administration is opting to rebuild the foundational scaffolding of the economy-an approach long overdue.

"Our core objective," Dr Ahmed concludes, "will be to ensure a better quality of life for all, and to build a system free of discrimination at all levels."​

 

[Saif]

FY26 GDP growth target set at 5.5pc

The interim government has backtracked from the previous administration's ambitious macro-economic targets as it is expecting 5.50 per cent economic growth in the next fiscal year. It has also revised down the current fiscal year's gross domestic product (GDP) growth target to 5.0 per cent f

thefinancialexpress.com.bd

FY26 GDP growth target set at 5.5pc

FE REPORT
Published :
Jun 03, 2025 01:14
Updated :
Jun 03, 2025 01:14

The interim government has backtracked from the previous administration's ambitious macro-economic targets as it is expecting 5.50 per cent economic growth in the next fiscal year.

It has also revised down the current fiscal year's gross domestic product (GDP) growth target to 5.0 per cent from the earlier 6.75 per cent.

The ousted Sheikh Hasina government took an ambitious 6.75 per cent economic growth target for FY25 despite the internal and external headwinds in the macro-economy.

The interim government has also set a realistic target of 6.0 per cent GDP growth in the medium term for FY27.

Finance Adviser Dr Salehuddin Ahmed in his FY26 national budget speech on Monday said the GDP growth rate may be slightly lower due to the fight against inflation.

"According to provisional estimates, GDP growth in FY25 could be 3.97 per cent. However, we expect the final estimate to be higher. We also expect that the growth rate will rise to 6.5 per cent in the medium term in FY28," he added.

Meanwhile, Bangladesh's economy has been estimated to grow at 3.97 per cent in the outgoing FY25 against the revised target of 5.0 per cent, the latest provisional data from the Bangladesh Bureau of Statistics (BBS) showed.

According to the 2023 GDP estimation, Bangladesh is the 33rd largest economy in the world.

The FY26 budget has been formulated with a view to accelerating economic growth in order to prepare for graduation from the least developed country (LDC) status, thus reaching the upper-middle income category by creating new jobs, sustaining GDP growth, promoting local industries, increasing investment through protection and trade facilitation, developing export-oriented and heavy industrial enterprises, and promoting the Made in Bangladesh concept.

According to provisional estimations, Bangladesh's GDP size is Tk 55.527 trillion or $462 billion in the current fiscal year.

The government in its medium-term macroeconomic framework says the GDP is expected to reach $487 billion in FY26 with 5.50 per cent expansion.

Meanwhile, the estimated GDP growth has been marked as the lowest in several years, raising concerns among economists and policymakers.

The BBS provisional data revealed modest growth across key sectors - agriculture by 1.79 per cent, industry 4.34 per cent, and services 4.51 per cent in FY25.

While these figures reflect some activities, they fall far short of the government's initial ambitious target of 6.75 per cent and even the revised target of 5.25 per cent GDP growth for the current fiscal year.

This downward revision aligns with earlier projections from international bodies. The International Monetary Fund (IMF) had adjusted its forecast to 3.76 per cent for FY25, the Asian Development Bank (ADB) 3.9 per cent, and the World Bank (WB) 3.3 per cent.

Although the GDP expanded at a slower rate, per capita income rose to $2,820 in FY25 from $2,738 in the previous fiscal year, the provisional data shows.​

 

[Saif]

Will the budget offer a release from two sufferings?

Bangladesh is facing multidimensional crises. According to World Bank, poverty rates will rise from 20.5 per cent in 2024 to 22.9 per cent in 2025

en.prothomalo.com

Will the budget offer a release from two sufferings?

Rashed Al Mahmud Titumir
Updated: 02 Jun 2025, 16: 04

Two crucial questions demand urgent attention in the upcoming budget of the 2025-26 financial year: how to increase domestic resource mobilisation, and how to ensure financing to tackle post-COVID poverty and harm done to income. These questions are not merely financial matters. There are tales of historical sufferings. They continue to haunt the development cycle. The third concern was discussed in an earlier column: “Is the budget a strategy to reduce the debt burden?”

The first suffering was about the looting of resources by the British colonialists. The economist Dadabhai Naoroji had calculated that towards the end of the 19th century, around 30 million to 50 million pounds were extracted out of India every year.

During the devastating famine of 1943, when hundreds of thousands perished in Bengal, the region still functioned as a revenue-generating engine for the empire. Bengal contributed 10 to 15 per cent of British India’s total tax revenue. It is most unfortunate that even as a post-colonial state, Bangladesh’s tax-to-GDP ratio stands at only 7.4 per cent. The South Asian average is 10 to 12 per cent, already well below the global average for developing countries. This is a tragic irony: the region once exploited for its revenue is now itself struggling to mobilise domestic resources.

The second suffering is about Lord Beveridge. He was the architect of the United Kingdom’s post–World War II social welfare system. Yet his birthplace, Rangpur, remains one of the poorest regions to this day. According to the Bangladesh Bureau of Statistics, the poverty rate in Rangpur stands at 24.8 per cent, that is, 6.1 percentage points higher than the national average of 18.7 per cent.

The British established a centralised revenue system by appointing British-trained, salaried district collectors instead of intermediaries like zamindars. To reduce corruption, they introduced land surveys, cadastral mapping, and the Permanent Settlement, enabling direct tax collection from farmers. Secondly, they strategically monetised the economy through the cultivation of cash crops such as indigo, opium, jute, and tea. While legal frameworks, administrative rigidity, exploitation, and coercion ensured colonial revenue extraction, the popular uprising of 2024 serves as a reminder that the core objective of a constructing a post-colonial state should be the pursuit of an equitable system.

Many hope that the budget will include a proposal for a universal, life-cycle-based social security system. Such a transformative initiative could play a vital role in overcoming the ‘lower social trap’ created by crises in livelihoods.

Why is the revenue system not effective?

The roots of failure lie in patronage-dependent economy. According to the Centre for Policy Dialogue (CPD), in the 2022-23 fiscal year, tax evasion and illicit financial outflows cost the country an estimated Tk 2.26 trillion (2 lakh 26 thousand crore taka). Corporate tax evasion alone accounted for nearly half of this amount. The 'State of Tax Justice 2024' report states that multinational companies siphon off between three to five billion dollars annually through transfer pricing.

The reactionary nature of the tax system is further exacerbating inequality. Indirect taxes account for 66 per cent of the National Board of Revenue (NBR)'s total revenue collection, with 38 per cent coming from the flat-rate Value Added Tax (VAT). This places a disproportionate burden on low-income households. Only 1.4 per cent of the population files tax returns. The wealthy and elite are adept at exploiting loopholes, for example, by declaring themselves as non-residents or by reclassifying business profits as tax-exempt agricultural income.

Hundreds of thousands of retail businesses are evading VAT by underreporting their annual turnover under the guise of being “small shops.” According to the NBR, out of over three crore (30 million) businesses, only 550,000, or about 2 per cent, are registered for VAT. The informal e-commerce sector also operates without VAT registration. The customs administration is flawed. According to Global Financial Integrity, from 2009 to 2018, Bangladesh lost an average of USD 8.27 billion annually due to under- and over-invoicing of import and export goods. Additionally, prolonged legal entanglements fuel corruption, as seized goods lie in warehouses in uncertain conditions, creating further risks.

Modernising the revenue system

The current interim government is not in a position to undertake and implement the kind of major medium-term reform programmes needed to enhance domestic resource mobilisation. However, the budget can still present a reform strategy and a well-considered implementation plan to address the challenges. Here are five key pillars of the reform agenda:
First, the National Board of Revenue (NBR) should be replaced by an autonomous body. This new tax collection institution could be named the Bangladesh Revenue Authority.

A complete overhaul of the existing system is required to make it effective. Additionally, a separate policy-making institution could be formed by incorporating the existing Tariff and Trade Commission, and named the Bangladesh Tax and Tariff Commission. The core mandate of this body would be to move away from a patronage economy and strategically advance the monetisation of the economy.

Second, the tax code needs to be modernized with a focus on direct taxation. Simplifying the system, mandating digital payment methods, and establishing tax offices at the upazila level would help expand the tax base.

Third, it is essential to introduce technology-driven monitoring mechanisms. For instance, a Tax Identification Dashboard, integrating data from electricity bills, bank transactions, and land records, could enhance oversight. Block chain tracking for bonded warehouses and AI-powered risk assessments would help prevent fraud.\Fourth, enacting an effective transfer pricing law is urgent. Multinational companies must be required to submit master and local files as well as country reports. Strict penalties should be imposed for profit shifting.

Fifth, a green tax framework could be introduced. A carbon tax (for example, Tk 1,200 taka per tonne) could be levied on high carbon-emitting industries such as cement and textiles. The revenue generated could be allocated to the climate adaptation fund.

From multidimensional crises to universal social security

The country is facing multidimensional crises. According to World Bank projections, the poverty rate will rise from 20.5 per cent in 2024 to 22.9 per cent in 2025. Low spending on education and health (respectively 2 per cent and 2.34 per cent of the GDP), coupled with poor education results and high rates of youth not engaged in higher education, employment, or training (41 per cent nationally and 62 per cent among women), pose serious challenges to achieving demographic dividends. These multiple challenges also hinder the achievement of sustainable development goals.
There is rapid urbanisation, but cities are not becoming livable. Economic productivity is not increasing proportionally with the growing population density. The severe impacts of climate change could result in a loss of 5 to 7 per cent of the GDP.

Government allocations for social safety nets are inadequate, flawed, ridden with corruption, and politicised. Social safety net programmes are relief-based and have not yet become universal or rights-based. More than 100 fragmented programmes need to be brought under a single administrative authority.

Many hope that the budget will include a proposal for a universal, life-cycle-based social security system. Such a transformative initiative could play a vital role in overcoming the ‘lower social trap’ created by crises in livelihoods and build resilience so that citizens are not left behind by economic shocks.

A system like this would be a fitting tribute in memory of Abu Sayeed, who grew up in the village Babanpur of Pirganj upazila, Rangpur and was martyred in July 2024. Rangpur is also the very same district where Lord Beveridge was born.

* Dr. Rashed Al Mahmud Titumir is a professor of the Department of Development Studies, University of Dhaka​