The government may reconsider its proposal to make a taxpayer identification number (TIN) mandatory for opening bank accounts, following concerns that the move could create barriers for ordinary citizens and low-income workers and undermine financial inclusion.
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The measure, included in the FY27 budget, was aimed at widening the tax net.

Students, recipients of government allowances, and individuals or organisations exempted through official gazette notifications would remain outside the requirement.

Speaking to The Financial Express on Friday, National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan said the government might review the proposal requiring individuals to submit a TIN certificate to open a bank account.

Tax experts and bankers warn that making TIN mandatory could discourage middle-, lower-middle-, and low-income people from entering the formal banking system, potentially pushing more economic activities into the informal sector.

Snehasish Barua, a chartered accountant and a director of SMAC Advisory Ltd, says forcing people to obtain an electronic TIN (e-TIN) solely to open a bank account would be a risky policy move.

"Bangladesh's economy still relies heavily on cash transactions. Such a requirement could undermine years of efforts to bring ordinary citizens and small businesses into the formal banking system," he tells The Financial Express.

"Rather than boosting tax collection, it could drive entrepreneurs and small businesses into the untaxed shadow economy. Reduced bank usage could also lower deposits and strain financial sector liquidity," he adds.

In his budget speech on Thursday, Finance Minister Amir Khosru Mahmud Chowdhury proposed making TIN certificates mandatory for opening bank accounts, except for student accounts, no-frills accounts, and those exempted by gazette notifications.

The proposal has drawn criticism at a time when the government is promoting digital payments, financial inclusion, and a cashless economy.

Critics say additional compliance requirements could discourage unbanked and low-income individuals from entering the formal financial system.

Industry insiders note that many banks, particularly in Dhaka and other major cities, have long encouraged customers to obtain TIN and sometimes facilitated registrations on their behalf.

As a result, some individuals later found TIN had already been issued in their names when they attempted to register independently.

Bankers say these practices were often linked to loan-processing requirements, where proof of tax return submission is needed.Regional business directory

However, TIN has never been mandatory solely for opening a bank account.

Meanwhile, the NBR is pressing ahead with plans to integrate its database with banks and other institutions to strengthen tax compliance and information sharing.

The proposed budget envisages online connectivity between the NBR and the National Identity Card (NID) system, banks, utility service providers, sub-registrar offices, and other agencies.

"Through central data integration, the NBR's database will be connected with the NID system, banks, utility services, sub-registrar offices, and other institutions to facilitate the exchange of information," the finance minister said.

In Bangladesh, we have a special talent for feeding the stable owner, polishing the saddle, praising the horse and then wondering why the rider is still walking barefoot.

The latest telecom policy and the new budget deserve appreciation. The government has clearly shown that it wants to support the telecom and digital industry and accelerate digitalisation. This is no longer just rhetoric. Some real actions have followed.

The recent telecom policy offered meaningful benefits to operators and licence holders. Mobile operators received a clearer licensing structure, more room for infrastructure sharing and a more predictable investment environment. ISPs received a pathway towards a simplified regime under new classifications. Tower, fibre, international connectivity, satellite, data centre and other infrastructure players were also given space to grow within a more structured digital ecosystem.

The promise to consumers was mainly better quality of service. That matters. But a farmer cannot buy mobile data with a promise. A rickshaw puller cannot call home at night with a policy paragraph.

Then came the budget, probably the most telecom and digital-friendly budget in Bangladesh’s history. The withdrawal of the Tk 300 SIM tax, the removal of withholding tax on BTRC revenue sharing and licence fees, the reduction of withholding tax on mobile network services, support for local handset manufacturing, relief for ICT equipment, and VAT exemptions for startups, freelancers and content creators are all welcome moves. They show that telecom and digital services are finally being seen as national infrastructure, not luxury toys.

But one uncomfortable question remains: in both the policy and the budget, where is the consumer?

Most of the benefits go to operators, licence holders, manufacturers, startups or formal digital businesses. The ordinary mobile user, who pays the bill every day, gets no direct relief. On mobile usage, consumers still pay around 39 percent in VAT, supplementary duty and surcharge. In plain language, when a poor person buys talk time or mobile data, the state takes a large bite before that person can talk, learn, sell, search or survive digitally.

Compare this with India, where telecom services face 18 percent GST. Pakistan’s telecom service tax is also lower than Bangladesh’s effective burden. Bangladesh wants digital inclusion, but taxes the digital user like a small walking treasury.

The same consumer-unfriendly thinking appears in floor pricing for voice calls and SMS. Minimum prices are maintained to protect operators’ interests. But at whose cost? The poor farmer, daily labourer, domestic worker, student and small shopkeeper are not sitting in consultation meetings wearing ties and speaking with polished accents. There is no powerful mobile users’ association knocking on the ministry’s doors. There is no digital rights forum for daily labourers with consultants and glossy presentations.

So, policymakers hear the people who can reach them. Operators have associations, experts, data, international references and smart teams making their case. That is not wrong. They have every right to do so. But when only the powerful are heard, policy becomes unintentionally tilted. That is how the rich get relief, and the poor get lectures on digital transformation.

The benefits given to the industry are necessary. Without a healthy industry, Digital Bangladesh cannot move forward. But reducing the 39 percent consumer burden to around 15 percent would be far deeper, fairer and more visible. Millions would feel the difference immediately.

Digital growth needs supply-side incentives for operators, but digital inclusion needs demand-side relief for consumers. If consumers remain heavily taxed, network investment alone will not deliver the desired benefits.

The next reform must be simple: keep supporting the industry, but create a real consumer voice in policymaking. Telecom and digital policy should not be written only for those who hold licences. It must also be written for those who hold a Tk 100 recharge card and pray it lasts a few more days.

The writer is the founder of BuildCon Consultancies Ltd and BuildNation Ltd

The proposed budget introduces a sweeping set of changes to how taxes are collected, filed, and enforced -- which chartered accountants say are largely business-friendly but will only work if officials on the ground do not use them to harass taxpayers.

They made the comments at an event where the Institute of Chartered Accountants of Bangladesh (ICAB) laid out its assessment of the proposed budget for fiscal year 2026-27 at CA Bhaban in Dhaka yesterday.

The government has proposed a national budget of Tk 9,38,000 crore, equivalent to 13.7 percent of GDP, with a revenue collection target of Tk 6,95,000 crore, ICAB President NKA Mobin stated.

Mobin said the proposed budget reflects the government’s commitment to maintaining macroeconomic stability, enhancing revenue mobilisation, generating employment, expanding investment, and fostering private-sector growth.

“ICAB believes that raising the tax-to-GDP ratio while ensuring greater transparency and accountability in tax administration is essential for sustaining long-term economic growth,” he said.

Other ICAB members described that to hit the budget target, the government needs more people and businesses paying taxes, and it needs them to pay correctly. The budget takes two routes to get there. The first is making compliance easier and cheaper for businesses that already pay taxes. The second is pulling more people and sectors into the tax net for the first time.

EASIER FOR BUSINESSES

Speaking at the event, CA Sarker Nahidul Islam, director of Tax and Advisory Services at Rahman Rahman Huq, said several income tax changes reduce the burden on businesses.

The minimum tax — a levy businesses had to pay even when making losses -- has been removed. Rules around what companies can claim as expenses have been relaxed, including on staff benefits and marketing costs.

The budget also relaxes limits on perquisites and promotional expenses, allows interest expenses without strict conditions, and removes the penalty for withholding tax failures. Startups pay zero turnover tax in their early years.

Significant changes have also been made to VAT – the tax added at each stage of production and sale.

Businesses can now claim VAT credit on labour and transport costs, which they previously could not, Islam said.

The process for filing VAT returns has been simplified, and a mechanism called the reverse charge – which required importers to self-assess and pay VAT on certain transactions – has been removed, cutting a layer of paperwork, he said.

VAT audits, which could previously drag on indefinitely, must now be completed within one year, he added.

Meanwhile, mandatory filing requirements have been tightened, tax audits will be more frequent, and penalties for late filing have been increased. Businesses must now submit proof that they have withheld and deposited tax on payments to suppliers and employees – a requirement that previously existed but was not strictly enforced.

“These changes are expected to reduce the cost of doing business and improve cash flow,” Islam said.

DISPUTING A TAX DEMAND JUST GOT CHEAPER

Nahidul also noted that appeals against tax decisions have been made simpler, payment requirements in certain cases have been reduced, and there has been an overall shift toward faster and more structured VAT compliance.

Under the current system, a business disputing an income tax assessment must deposit 10 percent of the disputed amount just to file a first appeal, 10 percent to go to the Tax Appeal Tribunal, and 25 percent to approach the High Court -- money that is locked up for the duration of the legal process regardless of whether the business ultimately wins.

In the proposed budget, the government has sought to cut these rates to 1 percent at the first appeal stage, 3 percent at the Tax Appeal Tribunal, and 10 percent at the High Court.

WIDENING THE TAX NET

At the same time, the budget is widening the tax net. Islam noted that VAT registration is now mandatory for mobile financial services providers, as well as businesses that provide electricity connections and vehicle registration services.

Retailers, who have largely operated outside the VAT system, are being brought in at a reduced rate of 0.2 percent. Warehouses have also been brought under VAT for the first time.

“These measures are expected to broaden VAT collection without significantly increasing tax rates,” Islam said.

However, he cautioned that some regulatory burdens remain, including no reduction in dividend tax rates, reduced rebates for individuals, and stricter record-keeping requirements of up to 12 years for companies. Increased scrutiny on expatriate employment and certain transactions may also raise compliance costs for businesses.

IMPLEMENTATION IS THE REAL TEST

CA Snehasish Barua, partner at Snehasish Mahmud and Co, said the government’s primary objective with the budget is to control inflation, and that duty reductions at the import stage were introduced with that goal in mind.

“These measures aim to provide relief to consumers, particularly as electricity and utility costs continue to rise,” he said.

But he said the main concern among practitioners is what happens at the field level. “The NBR must take practical steps to address this issue. Otherwise, revenue collection pressure will continue to fall on existing taxpayers rather than through an expansion of the tax base and the inclusion of new taxpayers in the system,” Snehasish said.

ICAB members also described the Document Verification System (DVS) -- a joint initiative between NBR and ICAB that allows tax authorities to verify the authenticity of financial documents submitted by taxpayers -- as a significant tool that has already helped curb evasion and should be expanded further.

ICAB members also noted that achieving the revenue collection target of Tk 6,95,000 crore will require comprehensive reforms and coordinated implementation efforts.

The budget projects a fiscal deficit of Tk 2,43,000 crore, of which Tk 1,12,000 crore is to be financed through domestic borrowing from the banking sector.

The institute cautioned that such reliance on bank financing could constrain credit availability for the private sector and potentially discourage private investment at a time when the government is simultaneously trying to encourage it.

The government has identified persistent inflation as the country's most pressing economic challenge, pledging a combination of fiscal and monetary measures to bring price pressures under control and ease the burden on households in the next fiscal year (FY 2026-27).

The national budget has identified high inflationary pressure as the "most urgent economic challenge", with 12-month average inflation climbing to 8.63 per cent during the period from June 2025 to May 2026.

Amid sustained price pressures, the government aims to reduce average inflation to 7.5 per cent in fiscal year (FY) 2026-27 through a range of budgetary and monetary measures.

"Curbing high inflation remains our most urgent macroeconomic challenge," Finance and Planning Minister Amir Khosru Mahmud Chowdhury said in his budget speech.

The first-ever international agreement on safeguarding digital platform workers in the gig economy was adopted on Friday at the UN’s International Labour Organization.

The Decent Work in the Platform Economy Convention is aimed at extending labour protections to hundreds of millions of people worldwide who work through digital platforms, in areas like food delivery and car services.The convention applies to “all digital labour platforms” and “all digital platform workers... whether they are in the formal or informal economy”, according to the text adopted by ILO members.

Until now, labour practices have struggled to keep pace with the dramatic shifts in the way people work.

The World Bank estimated in 2023 there were up to 435 million online gig workers around the globe who had largely fallen outside regular labour protections.

Companies behind the apps control the gig work via algorithms that assign tasks, set pay, evaluate performance and even fire workers.

Despite largely controlling the tasks and pay, the platforms typically classify the workers as independent contractors rather than employees.

This allows them in many cases to ignore things like minimum wage requirements, workplace safety and access to social security.

“The ILO now has the first convention that focuses on the impact of digitalisation in the world of work,” said the UN labour agency’s chief Gilbert Houngbo.

“This convention seeks to bring about tangible improvements in the lives of millions of workers around the world,” Brazil’s representative said at the adoption. In Brazil, “around two million workers will see their opportunities, dignity and autonomy strengthened by this convention”, she added.

Other countries, such as India, Bangladesh and the United States felt that the convention should be applied flexibly, depending on national contexts.

“We continue to urge extreme caution with respect to prescriptive binding regulations in fast-evolving areas of the economy,” said the US representative Lorenzo Riboni.

Independent contractors control their own work and “lean into an entrepreneurial spirit that makes America great”, he said.

The International Trade Union Confederation said the convention would help ensure that millions of platform workers can enjoy the rights, protections and dignity that all workers merit.

“This convention represents a major step forward,” the ITUC’s political director Jeroen Beirnaert told AFP.

He underlined, however, that the convention allows countries “to provide for certain limited exclusions from its scope”.

Therefore, “there is a risk that certain categories of workers will be excluded”, he said, but countries that choose to apply such exclusions would have to justify them.

The ITUC urged governments to ratify the convention quickly, saying the future of work had to be built on rights rather than precariousness.

The convention comes into force in member states 12 months after they ratify it, so long as two countries have ratified the text.

PAY AND SOCIAL SECURITY

Among other things, the convention calls on countries to ensure that gig workers are guaranteed fair pay and access to social security protections “on terms no less favourable than those applicable to other workers with the same classification of status in employment”.

Countries should also ensure that digital labour platforms provide workers with “timely, verifiable and easily understandable information on the terms and conditions of their employment or engagement”.

“Platform companies have built a business model that sidesteps labour protections and shifts risks and costs onto the workers,” said Human Rights Watch’s senior economic justice advisor Lena Simet.

The convention marks “a turning point for platform workers”, setting “the first global standard to protect their rights and hold digital labour platforms accountable”, she said.

The convention was adopted at the 114th annual International Labour Conference in Geneva.

The ILO is unique in the United Nations system in that its 187 member states are equally represented by governments, employers and workers.

The Bangladesh Securities and Exchange Commission (BSEC) has entered a complex legal standoff with the judiciary after issuing a fresh directive requiring the conversion or liquidation of closed-end mutual funds, despite a standing High Court status quo order on the matter.

The regulator's latest move, issued yesterday (9 June), has unsettled the asset management industry and left fund trustees in a difficult position as they weigh the risks of regulatory non-compliance against the possibility of contempt of court.

The dispute stems from a regulatory framework introduced in May 2026, under which any closed-end mutual fund trading at a discount of 25% or more to its Net Asset Value (NAV) must either convert into an open-end fund or be liquidated.

On 7 May, the BSEC instructed trustees of non-compliant funds to begin preparations for the process after 12 May, citing the need to protect small investors from persistent inefficiencies and illiquidity in the sector.

The directive was subsequently challenged in the High Court by petitioner Rashidul Islam, who argued that the regulator was unlawfully altering the tenure of existing funds.

HC issues 2-month status quo

The High Court, on 24 May, issued a two-month status quo order on the conversion or liquidation of the affected funds. It also issued a Rule Nisi, asking the finance secretary, the BSEC chairman, the managing directors of the stock exchanges, the Investment Corporation of Bangladesh (ICB), and other respondents to explain why the regulatory order should not be declared illegal.

The court also questioned the BSEC's authority to enforce premature conversion or liquidation of funds whose tenures had already been extended under a 2018 government notification.

Despite the court order, the BSEC yesterday issued a new directive reiterating that trustees should proceed with the conversion process, placing market intermediaries in a difficult position.

A senior ICB official, speaking on condition of anonymity, said complying with the latest BSEC order could be interpreted as a direct violation of the High Court's status quo. To protect itself, the ICB sent a formal letter to the commission today (10 June) seeking urgent clarification and said it would not proceed until the legal uncertainty is resolved.

The commission's internal legal discussions also appear to be under scrutiny.

BSEC's emergency meeting tomorrow

According to a senior BSEC official, yesterday's directive was issued following advice from the commission's legal experts, who believed the order would not amount to contempt of court.

However, after receiving multiple letters from concerned trustees highlighting potential judicial consequences, the regulator has reportedly sought a second legal opinion.

The commission is expected to review the matter in an emergency meeting tomorrow (11 June) in an effort to avoid a direct confrontation with the High Court.

Currently, 22 of the 36 listed closed-end mutual funds are trading at discounts of 25% or more to their NAV, making them subject to the conversion mandate. The original deadline for initiating the process expires tomorrow.

Under the proposed framework, at least 75% approval from unit holders is required for either conversion or liquidation.

BSEC spokesperson Abul Kalam defended the reform, saying it is aimed at protecting investors. He argued that open-end funds offer greater liquidity, easier redemption and a more transparent exit mechanism for investors who have remained trapped in undervalued funds for years.

He emphasised that the reform is designed to address governance transparency and ensure that the market price of a fund's units more closely reflects its underlying assets.

According to market sources, out of around 34 listed closed-end mutual funds, at least 22 are now exposed to either liquidation or mandatory conversion into open-end funds under the new regulation.

As the deadline looms, the fate of billions of taka invested in these 22 mutual funds remains in limbo.

The government has signed a loan and grant agreement with the World Bank to improve the country's health, nutrition and population services.

Under the agreement, the World Bank will provide $379 million in loan assistance, along with $25 million in grant support from the Global Financing Facility (GFF).

The financing will support two major projects under the Ministry of Health and Family Welfare, to be implemented between July 1, 2025 and June 30, 2029.

The first project, the Health and Nutrition Services Improvement and System Strengthening Project, will be implemented by the Directorate General of Health Services.

The project aims to improve the quality, accessibility and coverage of health and nutrition services across the country, with special emphasis on the Chattogram and Sylhet divisions, while strengthening the overall resilience and efficiency of the health system.

The second project, the Climate-Responsive Reproductive Health and Population Services Improvement and System Strengthening Project for Results, will be implemented by the Directorate General of Family Planning.

It aims to enhance the quality, equity and expansion of reproductive health and population services through climate-resilient systems and strengthened institutional frameworks.

The $379 million loan will be repayable over a period of 30 years, including a five-year grace period.

The financing carries a service charge of 0.75 percent per annum and an interest rate of 1.25 percent per annum on the disbursed amount.

A commitment fee of 0.50 percent per annum will apply to the undisbursed balance. However, the World Bank has refrained from collecting this fee in recent fiscal years.

Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky and Jean Pesme, division director of the World Bank Group for Bangladesh and Bhutan, signed the agreement, according to a press release issued by the ERD.

In the upcoming fiscal year, the government has set a target to utilise $13.27 billion, or Tk 1,62,000 crore, in foreign assistance through loans and grants -- an increase of 62 percent compared to the revised target for the current fiscal year.

According to the Ministry of Finance, $3.59 billion of this foreign assistance will be allocated as budget support, while the remaining amount will come in the form of project loans and grants.

The government is set to move away from its reliance on domestic borrowing to fund the budget deficit in the next fiscal year and opt for foreign borrowing in a bid to free up resources for the private sector and contain inflationary pressures, according to the finance ministry.

The overall deficit has been projected at Tk 2,43,000 crore, which is 3.6 percent of the GDP.

The outgoing fiscal year’s deficit target stands at Tk 2,00,000 crore. The government borrowed Tk 1,37,000 crore from domestic sources and Tk 58,000 crore from abroad, while about Tk 5,000 crore came in grants.

The budget plan for the next fiscal year says net domestic borrowing is expected to fall by 7.29 percent to Tk 1,27,000 crore, with bank borrowing cut by more than five percent to Tk 1,12,000 crore. Net foreign borrowing is projected to surge by over 89 percent to Tk 1,09,850 crore. The remaining Tk 6,150 crore will come from grants.

To reduce inflation and the cost of living, the government has taken an initiative to cut source tax on essential and agricultural products in the upcoming 2026–27 budget.

The new tax rate will come into effect after budget approval.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury is set to table the national budget for FY2026-27 in the House tomorrow afternoon (11 June).

According to the proposal, the existing source tax rates of 5%, 2% and 1% will be reduced to a uniform 0.5%.

Sources at the National Board of Revenue (NBR) said nearly 60 essential agricultural and consumer goods will come under this benefit.

These include rice, paddy, wheat, potatoes, livestock, ducks and chickens, fish, onions, garlic, ginger, salt, sugar, edible oil, seeds, and other daily necessities.

NBR sources said in recent years, high inflation and rising commodity prices have significantly increased the cost of living for ordinary people.

The decision to reduce source tax has been made to keep supply chains stable and ease price pressure on consumers.

The government is set to propose value-added tax (VAT) exemptions on the import of 36 raw materials used in pesticide production, aiming to boost local manufacturing, reduce reliance on finished imports and strengthen the domestic agrochemical industry.

Finance Minister Amir Khosru Mahmud Chowdhury is scheduled to unveil the national budget for the fiscal 2026-27 in the parliament today.

At present, imported raw materials for local production face a combined tax burden of 30% to 58%, including up to 15% VAT, making domestic production less competitive.

National Board of Revenue sources said a proposal is also under consideration to offer tax rebates on raw material imports for fertiliser production.

Officials also said the government is moving to support self-sufficiency in zinc sulphate fertiliser, with a proposal to reduce import duty on its key raw material, zinc ash, to zero percent.

Tax rebates are also being expanded for veterinary medicines, with plans to extend zero-duty benefits to generic categories of imported veterinary drugs instead of limiting concessions to specific branded products.

Relief for fertiliser producers

A broader package of relief is also under consideration for fertiliser and pesticide inputs to reduce agricultural production costs.

A proposal seeks to fully exempt the existing 7.5% VAT at the business level on all types of fertilisers. Separately, there is also a proposal to withdraw the 7.5% advance tax currently imposed at the import stage on all pesticides used in agriculture.

Cashew import duties likely to rise

In a move to support local cultivation and processing, the government is planning significant increases in cashew import duties.

The tariff on raw cashew nuts (in shell) is proposed to rise from 1% to 25%, while duties on processed cashew nuts (shelled) may increase from 5% to 25%.

However, to support domestic processors, a special provision is likely to be introduced, allowing raw cashew imports for local processing industries at a concessional 15% duty.

Poultry, dairy machinery to get duty waiver

The budget also proposes full duty exemptions on machinery and equipment parts used in the poultry and dairy sectors to enhance domestic production capacity.

Several items are expected to be added to the relevant statutory regulatory order (SRO), bringing import duties on them down to zero percent.

In addition, duty concessions on raw materials for poultry, dairy and fish feed industries are set to be expanded, with three additional inputs likely to be included in the SRO and brought under zero-duty coverage.

Facebook-parent Meta and Indian conglomerate Reliance Industries on Wednesday announced a deal to develop an AI-enabled data centre in the state of Gujarat, as the US tech giant scales its digital footprint globally.

The project, to be built in Jamnagar district, comes as technology giants race to expand computing capacity needed to support generative AI services in the world’s fastest-growing major economy.

Reliance will develop a 168-megawatt data centre to be delivered within two years, while Meta will lease capacity from the facility, the companies said in a joint statement.

The 168-megawatt facility will be developed by Reliance within two years, while Meta will lease computing capacity from it
The financial details of the agreement were not disclosed.

Meta chief Mark Zuckerberg said it was “proud” to partner with Reliance on its “first AI-enabled data centre in India”.

“This world-class facility in Jamnagar will help us scale our AI infrastructure globally while deepening our long-term investment in India’s economy,” Zuckerberg said.

Reliance chairman Mukesh Ambani described the announcement as India’s “first built-to-suit data centre for a global technology leader of Meta’s scale”.

India, home to more than a billion internet users, has seen a wave of investment announcements from global and domestic firms seeking to tap rising demand for cloud computing, artificial intelligence and data storage.

Google and Amazon have expanded their cloud infrastructure footprint in the country, while Indian conglomerates including Adani Group and Reliance have unveiled large-scale data centre plans.

Last week, Australian data centre operator AirTrunk said it would invest US$30 billion in India by 2030 to develop five gigawatts of data centre capacity.

Reliance is India’s biggest privately held conglomerate and its Jamnagar refinery is billed as the world’s largest.

Jamnagar is also home to what Reliance says is “one of the world’s largest wildlife rescue, care and conservation centres”.

The government has disclosed a multi-year personal income tax roadmap outlining rates over two years during the interim government period and three subsequent years under a BNP-led government, according to budget proposals presented in the latest fiscal framework.

Under the plan, the highest personal income tax rate is set to rise to 35% for individuals earning above Tk3 crore from the 2028-29 tax year, up from the existing 30%.

The additional 5% tax will apply to the "super income group," while middle-income taxpayers will remain unaffected.

"We proposed an additional 5% tax on income exceeding Tk3 crore from tax year 2028-29 to 2030-31. This higher rate will apply only to a small number of wealthy and high-income taxpayers and not to middle-income taxpayers," a draft budget speech by Finance minister Amir Khosru Mahmud Chowdhury reportedly stated, according to finance ministry sources.

The revised rate is expected to take effect on income earned in the 2027-28 fiscal year.

The proposal also includes an adjustment to the tax-free income threshold. For the 2028-29 tax year, the exemption limit is set to rise to Tk4 lakh, up from Tk3.75 lakh under earlier interim government announcements for the 2026-27 fiscal year. The threshold is projected to increase further to Tk4.5 lakh by 2030-31.

Under the proposed slab structure, income up to Tk3 lakh will remain tax-free, followed by 10% tax on the next Tk3 lakh, 15% on the next Tk4 lakh, 20% on the next Tk5 lakh, 25% on the next Tk20 lakh, and 30% on income up to Tk2.64 crore. Income above Tk3 crore will be taxed at 35%.

For the 2030-31 tax year, the top rate is expected to remain unchanged, though adjustments are likely in lower tax brackets and exemption limits.

Bangladesh's top tax rate has fluctuated over time, standing at 30% for years before being reduced to 25% during the previous Awami League government and later restored to 30%.

Economists have long argued for higher taxation on high-income groups to reduce inequality, while some tax experts caution that higher rates could discourage compliance among existing taxpayers.

Bangladesh’s economy is set to cross a historic milestone as the size of the Gross Domestic Product (GDP) is estimated to surpass the half-trillion-dollar mark in the current fiscal year (FY2025-26), according to provisional estimates released by the Bangladesh Bureau of Statistics.

The country’s nominal GDP is projected to rise to $501 billion in FY26, up from $456 billion in the previous fiscal year, marking a significant expansion in the size of the economy, according to the BBS report on Wednesday.

Alongside the higher economic output, per capita national income is estimated to increase sharply to $3,020, registering a rise of $251 or 9.06 per cent from $2,769 recorded in FY2024-25.

The latest estimates also indicate a moderate recovery in economic growth, while real GDP growth is estimated to grow by 4.14 per cent in FY26 from 3.49 per cent in FY25, although the pace remained below the pre-COVID trend.

Sector-wise performance showed mixed signals. The service sector continued to act as the main engine of growth, expanding by 4.59 per cent during the fiscal year, significantly increasing from the last fiscal year's growth of 4.35 per cent.

The agriculture sector also improved, posting 2.78 per cent growth compared with 2.42 per cent in the previous year, supported by stronger fisheries and livestock activities.

However, industrial growth slowed notably to 2.86 per cent from 3.71 per cent a year earlier, mainly due to weaker manufacturing performance and contraction in natural gas and crude petroleum extraction. 

The manufacturing sector is estimated to grow by 3.31 per cent, a significant drop from 5.83 per cent in the last fiscal. The large industry secured only 1.97 per cent of growth provisionally, with a massive fall from 5.94 per cent in the last fiscal.

The natural gas and crude petroleum sector contracted by 10.73 per cent in FY26, extending its negative growth streak for the fourth consecutive year.

Despite the expansion in GDP size, key macroeconomic indicators pointed to underlying pressure in investment and savings.

The overall investment-to-GDP ratio declined to 27.93 per cent in FY26 from 28.54 per cent in the previous fiscal year, indicating slower capital formation in the economy.

Private investment fell to 21.53 per cent of GDP, from 22.03 per cent, while public investment dropped to 6.40 per cent from 6.51 per cent in the last fiscal.

Savings indicators also weakened amid rising consumption pressure. Domestic savings dropped to 21.38 per cent of GDP from 21.98 per cent, while national savings declined to 26.93 per cent from 27.67 per cent in the last fiscal.

Consumption expenditure remained the dominant driver of economic activity, accounting for 78.62 per cent of GDP at current market prices, with private consumption alone representing nearly 73 per cent of the economy.

The government is poised to introduce a highly debated provision that would allow the investment of undisclosed income, commonly known as black money, in the real estate sector with indemnity from scrutiny regarding its source.

Officials at the National Board of Revenue told TBS that the proposed measure would permit buyers or sellers of land and property to disclose the actual transaction value if it exceeds the registered deed value without any agency questioning the source of the additional funds.

Under the proposal, individuals would be required to pay the applicable rate of tax on the previously undisclosed amount, which could be as high as 30% in the case of individual taxpayers, along with a penalty equivalent to 20% of the tax payable.

For example, if a property was registered at a deed value of Tk50 lakh but was actually purchased for Tk3 crore, and only the deed value had previously been disclosed by both the buyer and the seller, either party would be able to declare the remaining amount by paying the applicable tax and the additional 20% penalty.

In return, no authority would question the source of those funds. The same treatment would also apply to future transactions if the undeclared portion are subsequently disclosed under the proposed mechanism.

Industry scepticism

Representatives of the real estate sector said the proposed framework is unlikely to attract participation if taxpayers are required to pay tax at their normal applicable rates on the undisclosed amount.

According to industry representatives, buyers and sellers would have little incentive to regularise previously unreported funds under such a structure. They argue that a fixed-rate tax combined with protection from scrutiny over the source of funds would be more likely to encourage disclosures and investment.

Mohammed Akter Biswas, vice-president of the Real Estate and Housing Association of Bangladesh, said, "If tax is imposed based on the applicable rate linked to the deed value, nobody would want to disclose it. However, if taxpayers are allowed to pay tax at a fixed rate and no authority questions the source of the money, investment may increase."

Experts oppose indemnity for undeclared funds

Tax experts have opposed any form of indemnity that would allow undeclared money to enter the economy without investigation into its origin, arguing that such provisions could legitimise illegally earned income.

Syed Md Aminul Karim, former member for income tax policy at the NBR, said, "Allowing undeclared money to be invested through any mechanism would not be the right decision. It undermines tax justice for compliant taxpayers."

The government is set to reduce the corporate tax rate for private universities, medical colleges, dental colleges, engineering colleges, and IT-focused private colleges from 15% to 10% in the 2026-27 budget, to be presented in parliament tomorrow (11 June).

The rate had already been cut once – from 20% to 15% – in last year's budget.

Corporate tax rates for all other sectors will remain unchanged, according to Ministry of Finance sources.

Officials said the reduction reflects the government's policy support for higher education and skilled workforce development, and is intended to encourage greater private-sector investment in IT, medical, and engineering education – fields considered critical to future economic growth. If approved, the revised rate will take effect from 1 July 2026.

The measure is expected to benefit more than a hundred private universities and numerous private medical, dental, engineering, and IT institutions across the country.
Listed companies currently pay a 20% corporate tax rate, while non-listed companies are taxed at 27.5%.

Banks, insurance companies, and other financial institutions face a rate of 37.5%, while mobile telecom operators are taxed at 40% to 45%.

Export-oriented garment manufacturers enjoy preferential rates of 10% to 12%, subject to specific conditions.

Sabur Khan, president of the Association of Private Universities of Bangladesh (APUB), welcomed the move.

"The reduction is a positive step. The cost of providing quality education – particularly in technology, medical, and engineering – continues to rise. Lower tax obligations will allow institutions to invest more in infrastructure, research, and academic standards," he told TBS.

Economists note that while Bangladesh's tax-to-GDP ratio remains among the lowest in South Asia – creating pressure to boost revenue – maintaining competitive tax rates is essential for attracting investment.

The proposed relief is seen as an effort to strengthen human capital development through greater support for higher education.

The exchange rate of the US dollar has climbed back to Tk123, with several private banks purchasing dollars from exchange houses at rates ranging between Tk122.90 and Tk123 today (10 June).

Bankers attributed the increase to growing demand for dollars to open letters of credit (LCs) for key imports, including petroleum, fertiliser and fuel, coupled with relatively weaker remittance inflows at the start of the month.

The Business Standard confirmed this after speaking with several private bank officials.

According to the officials, pressure on the foreign exchange market intensified as importers sought to settle payments for essential commodities, pushing up demand for dollars.

The Bangladesh Bank data shows expatriates remitted around $980 million during the first eight days of June, lower than the more than $1.5 billion received during the same period in March and over $1 billion during the first nine days of May.

In April, remittance inflows stood at $975 million during the first eight days.

A senior private bank official told TBS remittance inflows typically decline after Eid holidays, creating temporary pressure when demand for dollars exceeds supply.

"Supply is slightly lower than demand at the moment, which has pushed up the exchange rate at the beginning of the month," the banker said, adding that the pressure may ease after mid-June.

The dollar last crossed the Tk123 mark in April, when Bangladesh Bank reportedly asked banks to buy dollars at Tk122.75 before gradually bringing the rate down.

Economists, however, said the central bank should allow the exchange rate to be determined by market forces rather than relying on informal interventions.

They argued that current market conditions do not warrant administrative measures to contain the dollar rate and that a demand-and-supply-based exchange rate would better reflect underlying economic fundamentals.

Subsidy allocation in the upcoming 2026-27 budget may decline significantly compared to the revised budget of the current fiscal year, with a cut of around Tk19,000 crore from actual spending in FY25.

According to the finance ministry officials, they expect subsidy spending to ease if global fuel and fertiliser prices fall following the end of the Iran war. The government may also further adjust gas and electricity tariffs in the coming fiscal year.

Subsidy expenditure in FY2024–25 stood at Tk108,673 crore, while the revised allocation for the current fiscal year is Tk95,031 crore. The proposed allocation for FY2026–27 is Tk89,538 crore, down from Tk88,920 crore in the original budget of the current year.

The finance ministry classifies subsidies on gas, electricity and food under the subsidy head, while agricultural subsidies are recorded under social safety net programmes. Food subsidies are partly split between both categories.

Meanwhile, incentives for exports, jute exports and remittances are expected to rise to Tk16,025 crore, up from Tk15,225 crore in the current budget.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury is set to table the national budget for FY2026-27 in the House tomorrow afternoon.

Local manufacturers of products ranging from man-made fibre and plastics to glass, steel, bicycles and paper could receive greater protection under the budget to be proposed today (11 June) through higher import taxes on competing goods, a move that may support domestic industries.

At the same time, the government is considering duty reductions on several industrial raw materials, which could lower production costs for some sectors and create room for lower prices.

However, questions remain over how much of those benefits would ultimately reach consumers.

Industry stakeholders, however, say raising import duties can be justified only when local manufacturers have sufficient production capacity and can ensure product quality. Otherwise, consumers may face higher prices without receiving adequate alternatives.

Anwar-Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, told The Business Standard, "If higher taxes are imposed on similar imported products to protect local industries, but those manufacturers have only 10% to 20% supply capacity, the policy will not produce good results. The quality of those products must also be considered."

"If import taxes are increased in the name of protection without examining these issues, consumer costs will rise. Instead of restricting imports, the government could reduce raw material costs for those industries and provide subsidies and other fiscal support," he added.

Products facing higher import duties

Several large investments have been made in polyester staple fibre production in Bangladesh in recent years.

To protect those manufacturers, a 5% customs duty is set to be imposed on imports of polyester staple fibre, a key raw material used in the ready-made garments and non-leather footwear industries.

The government is also considering raising customs duties on imported PVC and PET resins from the existing 5% to 10%. Significant investments have been made in the local production of these plastic industry raw materials over the past few years.

Similarly, imports of gypsum boards and sheets may face a 20% regulatory duty. Customs duty on imported bicycles could increase from 15% to 25%, while a new 5% regulatory duty may also be imposed.

To provide additional support to local washing machine manufacturers, a 20% supplementary duty may be imposed on imports. For the paper industry, supplementary duty on greaseproof paper and glassine paper could rise from 10% to 25%, alongside a new 5% regulatory duty.

A 10% regulatory duty may also be imposed on imports of cold-rolled coils and sheets to protect domestic manufacturers.

Imports of transformers could face an increase in supplementary duty from 10% to 25%, together with a new 5% regulatory duty.

For copper wire and copper tubes, a 10% regulatory duty may be imposed, while customs duty on copper tubes could increase from 15% to 25%. Customs duty on maize starch may also rise from 15% to 25%. In addition, a 10% regulatory duty may be imposed on DC motors with capacities below 1,200 watts.

Sector insiders say these additional taxes could increase import costs and ultimately raise consumer prices. They also note longstanding concerns that, even after receiving policy support and tax benefits, some industries do not always pass on the resulting cost savings to consumers.

Duty relief for industrial raw materials

Today's budget may also include duty reductions on a range of industrial raw materials.

Customs duty on five raw materials used in refractory cement production, including ball clay, may be withdrawn. Customs duty on five types of raw materials used in float glass manufacturing could be reduced from 25% to 15%.

For the detergent industry, customs duty on imported Linear Alkyl Benzene, a key raw material, may be reduced to 1%. Reduced import tax rates are also being considered for two raw materials used in tyre and tube manufacturing.

In the skincare and beauty products sector, supplementary duty on two raw materials could be reduced from 30% to 10%.

Meanwhile, the government is considering withdrawing the existing 5% regulatory duty on key raw materials used by the coffee processing industry.

The government is set to unveil a wide-ranging fiscal incentive package for the country's renewable energy sector in the national budget to be placed in parliament today (11 June), including duty-free imports of key solar equipment, a tax holiday for solar power generation and tax rebates for consumers using solar electricity.

According to officials at the power and energy ministry, Finance Minister Amir Khosru Mahmud Chowdhury is expected to propose a zero percent tax rate for solar power generation projects until 2035.

The budget is also likely to introduce a 5% tax rebate on payments for solar electricity bills, providing a direct incentive for households, businesses and industries to invest in rooftop solar systems.

Industry insiders say the proposed measures could significantly reduce project costs, attract private investment and accelerate Bangladesh's transition towards cleaner and more sustainable energy sources.

A central element of the package is a proposal to exempt major solar power components from customs duty, regulatory duty, supplementary duty and advance tax through a notification that would remain effective until 30 June 2031.

Officials say the long-term validity of the exemption is intended to provide policy certainty for investors and developers planning large-scale renewable energy projects.

Tax burden on solar equipment

The proposed measures come as renewable energy technologies continue to face a substantial tax burden despite the government's stated ambition to increase the share of clean energy in the national power mix.

According to industry data, most solar equipment imported into Bangladesh currently faces a total tax incidence ranging from 27.5% to 28.7%, driven by a combination of customs duty, value-added tax, advance income tax and advance tax.

Assembled solar photovoltaic modules are subject to a total tax incidence of 28.7%, while non-assembled solar panels face a burden of 27.5%. Photovoltaic generators and solar inverters are also taxed at 28.7%.

The burden is significantly higher on several supporting components essential for solar projects. Direct current cables face a total tax incidence of 61.8%, while charge controllers and monitoring systems are taxed at 39.7%.

Industry experts have long argued that these taxes substantially increase project costs and undermine the competitiveness of renewable energy technologies, particularly because a uniform 7.5% advance tax is imposed on solar equipment imports regardless of their strategic importance in supporting the country's energy transition.

Under the current tax structure, customs duty on renewable energy equipment ranges from 1% to 10%, while value-added tax is charged at 15%, advance income tax at 5% and advance tax at 7.5%.

Industry welcomes proposed reforms

"Previous attempts to accelerate renewable energy systems, particularly distributed ones like rooftop solar, remained largely fragmented due to high import duties," Shafiqul Alam, lead analyst for the Institute for Energy Economics and Financial Analysis (IEEFA) South Asian regional office, told TBS.

"The current government's attempt to waive these disproportionate duties on distributed systems will reduce overall import costs by 20% to 30%. This will significantly bring down the Levelised Cost of Energy from distributed renewable systems, enhancing interest across industries, commercial buildings, and households," he added.

Shafiqul further noted that given recent power tariff hikes, consumers with higher electricity bills will save substantially more by implementing new rooftop solar projects.

Energy experts also said the incentives could improve the competitiveness of renewable energy relative to fossil fuel-based generation, which has historically benefited from various fiscal incentives and policy support.

The proposed consumer-level tax rebate is likewise expected to encourage wider adoption of rooftop solar systems by lowering the effective cost of solar electricity consumption.

Bangladesh can become the world’s most attractive apparel sourcing destination if it can deliver faster lead times, produce more value-added products and ensure seamless collaboration across the supply chain, according to a senior executive at Inditex, one of the world’s largest fashion retail groups.

“I think it is the right time and in the right place that we should not be afraid of what the other countries are doing. We deal with India, Pakistan, Cambodia and Vietnam,” said Javier Carlos Santonja Olcina, regional head for Bangladesh and Pakistan at Inditex.
“Bangladesh has enough capabilities to overtake all of them. This is my personal opinion. My company is trying to communicate to our supply chain in Bangladesh,” he added.Olcina made the remarks yesterday at the inauguration of the 20th Bangladesh Denim Expo at the International Convention City Bashundhara (ICCB) in Dhaka.Typically, Western buyers do not disclose their sourcing plan. However, Olcina lauded Bangladesh’s potential. He identified three priorities that could help Bangladesh become the world’s most attractive sourcing destination.

First, he said, the country needs world-class logistics infrastructure.According to him, Bangladesh still does not have a deep-sea port, a modern airport, reliable energy supplies and faster customs clearance, all of which are critical for improving delivery performance.He said that both exporters and importers in the garment sector continue to suffer because of weaknesses in the logistics system.

Second, the regional head of Inditex said, Bangladesh must move further into higher value-added garment products, which will require coordinated efforts from manufacturers and other industry stakeholders.

Third, Olcina said, closer collaboration is needed among the government, global brands, multilateral organisations, manufacturers, logistics providers and industry associations to drive the sector forward.

He said the global business environment is complicated, with countries continuing to deal with the fallout from Covid-19, geopolitical tensions and broader economic uncertainty. Despite these challenges, Bangladesh remains better positioned than many of its competitors.

At the event, Mahmud Hasan Khan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh is now the largest exporter of denim to both the European Union and the United States, ahead of China.

“We are approaching LDC graduation. This is being discussed in every boardroom and every policy meeting in Dhaka,” said Khan.

He said their position at BGMEA is clear as the preferences apparel makers currently enjoy will change after graduation.

“If we are not prepared, the industry will feel it. RMG is currently the biggest beneficiary of preferential access. In the post-LDC era, without the right trade arrangements in place, the apparel industry risks becoming the biggest loser,” said the BGMEA president.

European Union Ambassador to Bangladesh Michael Miller said Bangladesh is entering a new phase of its economic development.

“The challenge now is to create decent jobs, skill the workforce, attract high-quality investments to move up value chains, help diversify the economy, ensure a clean energy transition, and prepare effectively for graduation from least developed country status,” he said.

Mostafiz Uddin, founder and chief executive officer of Bangladesh Denim Expo, said more than 50 exhibitors from over 10 countries would showcase products and innovations during the two-day event.

Uddin said, “We are not just showcasing fabric; we are displaying the entire denim value chain -- from sustainable fibres to cutting-edge, eco-friendly finishes.”

Bangladesh remains the largest denim exporter to the European Union, with a market share of around 33 percent, he said.

The country is also a leading supplier to the US market, where Bangladesh-made denim accounts for one in every three pairs of jeans sold through many major retail chains, he added.

With the global denim market projected to reach $105 billion by 2032, the objective is not only to participate in that growth but also to lead it through higher-value products and industry-leading sustainable practices, said Uddin.