The Finance Ministry is preparing to unveil a reduced national budget of Tk 7.90 lakh crore for the fiscal year 2025-26, cutting Tk 7,000 crore from the previous year’s budget. The decision aims to align government spending with a tight monetary policy to control inflation and ensure realistic implementation.
In a break from tradition, the budget will be announced on a Monday (June 2)—ahead of the Eid-ul-Azha holidays—instead of the usual Thursday. As the national parliament is not in session, Finance Advisor Dr. Salehuddin Ahmed will present the budget via television, and it will be enacted through a presidential ordinance.
Key Highlights:
- Taxpayer Relief, Not Heavy Hikes: The budget is expected to ease conditions for taxpayers rather than introduce sweeping tax increases. However, minimum tax for all regions will be set at Tk 5,000, and the tax-free income threshold will rise slightly to Tk 3.75 lakh.
- Corporate Tax Adjustments: While corporate tax rates won’t decrease, some existing conditions will be relaxed to help businesses fully benefit from prior rate cuts. Future rates for FY 2026–27 and 2027–28 may also be outlined.
- Advance Tax on 200 Imported Items: A proposed 2% advance income tax (AIT) will be levied on around 200 goods that were previously exempt, including raw materials for garments, food, fuel, and medical equipment, potentially generating Tk 2,000 crore in additional revenue.
- Land Registration Tax Eased: Registration fees may shift from per-katha to percentage-based calculation, and advance tax on land could be slightly reduced.
- Agriculture Tax Breaks to End: Tax exemptions for fisheries and poultry sectors may be withdrawn. These sectors could be taxed at up to 30%, replacing the current 3–15% range, due to concerns over black money laundering under the existing system.
- US Import Duty Rebalancing: To ease trade tensions with the U.S., Bangladesh will reduce duties on an additional 100 American products, adding to the 190 already at zero-duty levels.
- Higher VAT on Electronics: VAT on refrigerators and ACs may rise from 7.5% to 15%, and mobile phone VAT could increase to 7.5%–10% depending on local value addition. VAT on battery production may also double.
- Mandatory Online Tax Filing: The government plans to expand mandatory online tax return filing for both individuals and companies, building on growing digital adoption.
- Gold Import Limited to Once a Year: Under revised baggage rules, travelers can bring gold from abroad only once a year, with mandatory declarations for amounts exceeding $10,000. Previously, multiple trips were allowed annually under relaxed duty terms.
This budget aims to balance fiscal responsibility, revenue growth, and economic stability while preparing the country to weather inflation and evolving global challenges. Final changes may still occur before the official announcement.
