The government is likely to place greater emphasis on public-private partnerships in the energy sector and adopt more investment-friendly policies to encourage private sector participation in addressing challenges, according to budget proposals expected to be unveiled today (11 June).

Finance Minister Amir Khosru Mahmud Chowdhury is scheduled to present the first budget of the BNP-led government in parliament, outlining a range of measures to tackle persistent energy and power shortages.

The budget may include plans to expand partnership initiatives, boost private investment in power generation and renewable energy and strengthen the security framework.
 channelSpeaking to The Business Standard, David Hasanat, president of Bangladesh Independent Power Producers Association, said private investors would be willing to invest in the power and energy sectors if the government introduced a genuinely investment-friendly policy environment.

The Yunus government floated tenders for solar power projects, but those efforts did not yield results. The current government has revised the policy and issued new tenders, but major investors are unlikely to come under the existing framework, he said.

"We want to invest, but nothing comes free," Hasanat said.

The budget is expected to set a target of raising power generation capacity to 35,000 megawatts by 2030 and expanding transmission lines to 25,000 circuit kilometres.

Regarding this, Hasanat noted that gas shortages currently prevent the government from generating nearly 8,000MW of electricity despite having the installed capacity.

He said expanding solar power generation would require policies that are more attractive to private investors.

The finance minister may also announce measures to identify corruption in the power sector, review capacity charge payments and power purchase agreements, modernise transmission and distribution networks, develop smart grids, promote domestic manufacturing of renewable energy equipment, and build strategic fuel reserves to enhance long-term energy security.

The government is set to propose substantial tax and duty cuts on electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and charging infrastructure in the upcoming budget, while increasing the tax burden on certain fossil-fuel-powered vehicles to promote greener transport.

The first full budget from the BNP government, under the leadership of Prime Minister Tarique Rahman, is set to be presented in parliament today at 3pm. Finance Minister Amir Khosru Mahmud Chowdhury will deliver the national budget.

Tax burden on EVs to fall

According to National Board of Revenue sources, the current overall tax incidence on imported EVs is around 93%. The FY27 budget may propose reducing the tax to 64% for EVs valued at up to $25,000 and to 80% for those priced up to $50,000.

The proposal is likely to seek to continue full duty and tax exemptions on imported electric buses used by schools, colleges, universities and similar educational institutions. For other electric buses and trucks, all duties and taxes except VAT will remain exempt until 30 June 2030.

Major relief for plug-in hybrids

Significant tax relief may also come for new PHEVs. The supplementary duty on PHEVs with engine capacities of up to 2,000cc is set to be reduced, while the regulatory duty on new PHEVs of up to 1,800cc will be fully withdrawn.

As a result, the overall tax burden on brand-new PHEVs of up to 1,800cc may fall from 93.16% to 73.44%. For brand-new PHEVs of up to 2,000cc, the tax incidence may decline from 132.36% to 96.10%.

Charging equipment to get zero-duty facility

To support the expansion of EV charging networks nationwide, the government may propose to remove all duties and taxes on imported chargers and charging stations. The current tax burden on these products stands at 39.75%.

If approved, the tax incidence on chargers and charging stations will fall to zero.

Higher taxes on petrol and diesel vehicles

Meanwhile, the government may also propose increasing the tax burden on imported internal combustion engine vehicles with engine capacities between 1,200cc and 1,600cc. The overall tax incidence on these vehicles is expected to rise from 132.36% to 155.88%.

However, tax rates on other categories of vehicles are likely to remain unchanged.

The DSE Brokers Association of Bangladesh (DBA) has formally requested Bangladesh Bank to include bond defaulters' information in its Credit Information Bureau (CIB) database.

The association highlighted that no regulatory body currently maintains a formal record of bond defaults, creating a significant information gap that exposes investors to financial risks and fosters a culture of non-repayment within the fixed-income market.

The proposal was placed during a high-level meeting between a DBA delegation, led by its President Saiful Islam, and the Bangladesh Bank Governor yesterday. Discussions focused on the capital market's current state, challenges within the banking sector, and long-term reforms needed to restore investor confidence.

Saiful Islam pointed out that while bank loan defaulters are strictly monitored through the CIB, bond issuers who fail to honour repayment obligations often escape such scrutiny. Integrating this data into the CIB, the DBA argued, would boost transparency and accountability across the financial sector, curbing corporate issuers' tendency to default on debt securities.

Beyond bond defaults, the DBA submitted a comprehensive set of policy recommendations aimed at building a more resilient financial ecosystem. A key concern was the repeated recapitalisation of troubled banks using taxpayer money, which the association argued is fiscally unsustainable. It instead recommended restructuring distressed lenders through market-based investment, mergers, and private sector participation.

The brokers also emphasised the need to reduce the banking sector's over-reliance on large corporate borrowers. The DBA suggested that big corporate houses should be mandated to raise a portion of their capital through the stock market via bonds and equity. This shift would not only deepen the capital market but also diversify the risks currently concentrated within the banking system.

To improve market liquidity, the DBA proposed expanding access for general investors and non-primary dealer banks to government securities through non-competitive bids. It also called for a shift from the current T+2 share settlement cycle to T+1, arguing that faster settlement would reduce transaction risks, accelerate fund reinvestment, and align the Dhaka bourse with international standards. T+1 settlement or Transaction plus one day means that when you buy or sell a security (such as a stock or bond), the trade is finalized—meaning the buyer gets the asset and the seller gets the cash—exactly one business day after the trade is executed

On fiscal matters, the association noted that existing tax laws impose an added burden on retained earnings and stock dividends, discouraging banks and financial institutions from strengthening their capital bases. It urged greater coordination between Bangladesh Bank and the National Board of Revenue to address these inconsistencies.

Other proposals included launching an integrated local digital payment system to reduce dependency on international gateways and lower transaction costs, and raising the investment ceiling for banks in open-end mutual funds to boost institutional participation.

The US trade deficit shrank slightly in April, government data showed Tuesday, with energy exports bolstered by a supply crunch following war in the Middle East.

The overall trade gap narrowed 1.2 percent to $55.9 billion, said the Commerce Department. Economists surveyed by Dow Jones Newswires and The Wall Street Journal had expected a $56.1 billion figure.

US exports of crude oil and petroleum products have surged since US-Israeli strikes on Iran from late February, which triggered Tehran’s retaliation in virtually blocking the Strait of Hormuz.

The strait is a key waterway for energy transit, sending prices soaring.

“Energy exports are an important factor here with the US supplying more in international markets, largely from existing inventories,” ING chief international economist James Knightley told AFP.

This has “helped keep something of a lid on global energy prices that have been under upward pressure” from the supply shock, he added.

But he warned that the deficit widened when petroleum products were excluded.

“Should we get a resolution that leads to a recovery in oil and gas supply then the US trade deficit will quickly deteriorate once again,” he said.

In April, exports rose 2.6 percent to $327.1 billion, fueled by crude oil, fuel oil and other petroleum products.

Government data showed that exports of capital goods like computers and civilian aircraft also climbed.

While the global economy appears to be managing through the war, Nationwide financial market economist Oren Klachkin cautioned that “the standoff poses a threat to the US outlook as long as the strait (of Hormuz) remains closed.” US imports, meanwhile, rose by 2.0 percent to $383 billion in April.

This was boosted by imports of products like computers and semiconductors, thanks to an ongoing demand for hardware needed in the artificial intelligence buildout.

“With demand for the AI build out still elevated, we expect capital goods imports will remain solid this year,” US economist Grace Zwemmer of Oxford Economics told AFP.

Businesses have continued spending on high-tech goods linked to data centers, a key driver of economic growth, with President Donald Trump’s tariffs excluding some of these products.

“Tariffs could still impact trade flows this year, although likely to a lesser extent than in 2025,” Zwemmer added.

This comes as the Trump administration rushes to roll out more durable tariffs on goods from various trading partners after the Supreme Court struck down a swath of the president’s global duties in February.

The BNP government is likely to propose a new legal provision requiring individuals to disclose previously undeclared investments or property transactions and pay applicable taxes, along with a 20 percent penalty on the undisclosed amount, as part of efforts to strengthen tax compliance.

The proposal will be placed in Parliament on Thursday by Finance Minister Amir Khosru Mahmud Chowdhury in his budget for the 2026-27 fiscal year aiming to advance Bangladesh’s transition towards a more investment-driven and “trillion-dollar economy” through higher growth targets, regulatory reforms and expanded fiscal measures.

The total outlay of the budget is likely to be set at Tk 9.38 trillion, the largest national budget in the country’s history.

This will be the first budget of the BNP government this time following a landslide victory in the parliamentary election held on February 12 this year.

According to Finance Division officials, the budget is being prepared under the broad theme of “Economic Democratisation and Deregulation: Bangladesh’s Journey Towards a Trillion-Dollar Economy.”

The special proposal has been incorporated into a new section titled “Disclosure of Undeclared Investment” under the Income Tax framework.

According to the draft provision, no individual will be questioned by any authority regarding the source of funds used for previously undisclosed investments or property purchases, provided they voluntarily disclose the investment and pay the required taxes.

It covers transactions involving the purchase or sale of land, buildings or apartments where the actual transaction value exceeds the value stated in official documents.

In the case of property purchases, if the actual purchase price is higher than the declared deed value, the taxpayer will be allowed to legalise the undisclosed additional amount by paying income tax under existing rules.

Similarly, where the actual sale price of land, buildings or apartments exceeds the amount recorded in documents, the seller will be required to pay income tax on the undeclared portion of the proceeds.

However, the draft law stipulates that taxpayers availing themselves of the disclosure facility must also pay an additional tax equal to 20 percent of the undisclosed excess purchase or sale amount.

The undisclosed income regularised under the provision must be reported in the taxpayer’s income tax return under the schedule relating to “sources of funds and accumulated assets.”

The proposed facility will not apply if the taxpayer is already facing legal proceedings or investigations in Bangladesh or abroad over a predicate offence, including money laundering or other criminal activities linked to the undisclosed assets.

The measure is part of the government’s broader efforts to bring untaxed wealth into the formal economy while maintaining safeguards against the legalisation of proceeds derived from criminal activities.

Gold fell over 2 percent ‌to a more than two-month low on Wednesday as fresh fighting in the Middle East dimmed hopes of a resolution to the US-Israeli war with Iran, heightening concerns about inflation and interest rate hikes.

Spot gold was down 2.1 percent at $4,172.44 per ounce ​by 0849 GMT, its lowest level since March 23. US gold futures ​for August delivery shed 2.1 percent to $4,195.60.

“Gold remains a victim of growing inflation risks despite geopolitical tensions fuelling risk aversion. Renewed US-Iran hostilities have essentially sabotaged efforts to ​end the war,” said Lukman Otunuga, senior research analyst at FXTM.

Iran’s Revolutionary Guards said ​they had carried out missile and drone attacks on US military bases in Jordan, Kuwait and Bahrain in retaliation for American strikes on Iranian targets around the Strait of Hormuz.

The clashes mark one of ​the biggest exchanges in hostilities since the two countries agreed to a ceasefire in ​April.

Bullion has fallen more than 20 percent since the US-backed war with Iran began in late February. ‌The ⁠conflict has led to a surge in oil prices, stoking fears of inflation and higher interest rates.

While gold is seen as a hedge against inflation, higher rates typically weigh on the non-yielding metal.

Traders are currently pricing in a 68 percent chance of a US interest rate ​hike in December, according ​to the CME ⁠FedWatch tool.

Investors await May Consumer Price Index data later in the day and the Producer Price Index reading on Thursday, to gauge ​the Federal Reserve’s monetary policy stance after a strong jobs report ​last week ⁠raised rate hike bets.

“The incoming CPI report may heavily influence expectations around what actions the Fed takes in second half of 2026. On the technical front, gold’s decline below the ⁠200-day SMA (Simple ​Moving Average) is a bearish signal that may ​trigger additional selling pressure, aided by fundamentals,” Otunuga said.

The indices of the Dhaka stock exchange inched down today (10 June)as cautious investors booked their profit before the upcoming budget FY2026-27.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) decreased 3 points to settle at 5,517 today. The blue-chip DS30 index dropped 0.5 points to 2,080, while the DSES Shariah Index shed 3 points to 1,114.

Market turnover stood at approximately Tk1,210 crore, 18.43% lower than the previous trading session. Of the issues traded on the DSE, 149 advanced, 178 declined and 64 remained unchanged.

Market participants said the stock market was in a consolidation phase last week after experiencing a strong rally in recent weeks. Typically, following a significant rise, investors tend to book profits, leading to a temporary correction or stabilisation in the market.

However, the appointment of a new chairman and commissioners of the Bangladesh Securities and Exchange Commission (BSEC) on the last trading day of the week boosted investor sentiment. Expectations that the new leadership would strengthen market governance, enhance transparency, and restore investor confidence prompted fresh buying interest, preventing the anticipated correction and pushing the market higher.

As a result, many cautious and short-term investors opted to lock in gains toward the end of the week, particularly in stocks that had posted sharp price increases over a short period. The resulting selling pressure contributed to the downward trend observed in the market at the beginning of this week, analysts said.

Meanwhile, the government's recent initiative to introduce a Tk20,000 crore stimulus package aimed at reviving closed and financially distressed industrial enterprises has also influenced market activity.

The announcement has fuelled speculative interest in shares of several listed companies that are either non-operational or fundamentally weak. Investors are betting that some of these companies could benefit from government support and eventually resume operations, improving their future business prospects.

However, market analysts noted that there is still no clarity regarding how the stimulus fund will be distributed, which companies will qualify for assistance, what conditions will apply, or when the funds will actually be disbursed.

They cautioned that the recent surge in the share prices of closed and weak companies is largely driven by expectations rather than confirmed developments and may not be sustainable in the long run.

Investors should therefore focus on company fundamentals, financial health, and business viability before making investment decisions, they added.

In its daily market review, EBL Securities said the capital bourse witnessed a flat session as profit-booking sentiment in recently rallied scrips offset selective buying in perceived attractive stocks, reflecting investors' cautious sentiment ahead of the upcoming national budget declaration.

According to the brokerage, the broad index opened on a brief positive note as bargain hunters remained active until mid-session; however, selling pressure emerged thereafter, wiping out the earlier gains and ultimately leading the market to close in a marginally negative territory.

On the sectoral front, the General Insurance sector dominated market turnover, accounting for 19.4% of total transactions, followed by Engineering at 12.4% and Textile at 11.7%.

Sectoral performance was mixed during the session. The Ceramic sector posted the highest gain, rising 3.5%, followed by Services with a 2.7% increase and Mutual Funds with a 2.0% gain.

On the other hand, the Miscellaneous sector suffered the sharpest decline, falling 4.2%, while Paper and Printing and Financial Institutions lost 2.0% and 1.2%, respectively.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended in negative territory. The Selective Categories Index (CSCX) fell by 44.6 points, while the All Share Price Index (CASPI) dropped by 73.5 points at the close of trading.

Bangladesh's economy has crossed a major milestone, with gross domestic product surpassing the $500 billion mark for the first time, according to provisional estimates released by the Bangladesh Bureau of Statistics today (10 June).

The latest data show that the country's GDP at current prices reached $501 billion in fiscal year 2025-26, placing the country in the half-trillion-dollar economy club. The economy was valued at $456 billion in FY25.

In local currency terms, the size of the total GDP stood at Tk61.2 trillion during the fiscal year.

The milestone comes after several years of economic challenges, including external shocks, elevated inflationary pressures and the continued depreciation of the taka against the US dollar.

Economists say the latest figures indicate that the economy is gradually regaining momentum despite lingering structural weaknesses.

According to the BBS, GDP growth rose to 4.14% in FY26 from 3.49% in the previous fiscal year. Per capita gross national income also crossed a significant threshold, rising by $251 to reach $3,020 for the first time.

Investment and savings indicators weakened during the year. The investment-to-GDP ratio declined to 27.93% from 28.54% a year earlier. Domestic savings fell to 21.38% of GDP, while national savings dropped to 26.93%.

Infographics: TBS
Infographics: TBS

Despite the increase in GDP growth, lower levels of investment and savings suggest that significant challenges remain for the economy.

Sector-wise performance showed that agriculture and services supported overall growth, while industry lost momentum.

The industrial sector recorded growth of 2.86%, down from 3.71% in FY25, largely due to a slowdown in manufacturing. Contributions from large, medium, small and cottage industries all declined.

Although the services sector expanded at a slightly faster pace, contributions from wholesale and retail trade, real estate, accommodation and food services, and financial and insurance activities weakened.

Dr AK Enamul Haque, director general of the Bangladesh Institute of Development Studies, said the 4.14% growth rate reflected a slowdown in economic activity.

He attributed the weaker momentum to post-election uncertainty, sluggish investment and broader economic pressures, noting that many entrepreneurs remain in a wait-and-see mode regarding new investments.

"The decline in industrial growth is a concern," he said, adding that prolonged Eid holidays and disruptions to production also contributed to the sector's weak performance.

Enamul noted that the final growth figure could change, as complete agricultural data, including major seasonal crops, have yet to be incorporated into the estimates.

He said despite the challenges the expansion of GDP to $501 billion signals continued economic growth and could support further job creation. Preliminary indicators suggest a gradual improvement in urban labour markets.

Looking ahead, he said the upcoming budget would be crucial in restoring economic momentum through investment-friendly policies.

Sayema Haque Bidisha, an economics teacher at Dhaka University, said, "An increase in the size of GDP and per capita income is certainly a positive development. It indicates that the economy is gradually recovering. However, we should not focus solely on the size of growth; we must also examine how widely the benefits of that growth are being distributed."

She added that political and economic stability play a crucial role in attracting investment, as investors generally seek environments that offer stability and predictability.

Sayema Haque noted that expecting very high growth in the agricultural sector is not realistic because the sector operates within natural constraints.

Expressing particular concern over the slowdown in industrial growth, especially in the manufacturing sector, she said, "For a country's structural economic transformation, the manufacturing sector is extremely important. A significant share of future growth is expected to come from this sector. Therefore, a slowdown in manufacturing growth should serve as a warning sign for us."

The economics teacher further noted that the sluggish pace of private-sector investment and the negative trend in manufacturing deserve serious attention from policymakers, as these sectors serve as the primary driving forces of the economy.

She said future policymaking should prioritise forms of growth that generate employment opportunities and help reduce income inequality.

Meanwhile, Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh, described the country's entry into the half-trillion-dollar GDP club as a significant milestone achieved through decades of economic progress.

He said that governance weaknesses had prevented the economy from achieving even stronger growth.

While agriculture and services continue to contribute positively, the weakness in manufacturing remains a key risk for a labour-intensive economy, Masrur said.

To sustain the momentum and eventually move toward a trillion-dollar economy, he said Bangladesh would need to redefine its growth drivers and undertake major reforms in trade, investment and revenue administration.

The FY2026-27 budget, scheduled to be placed in parliament today (11 June), is expected to bring wide-ranging changes to the import duty and tax structure to support local industries, encourage import-substitute production and improve the competitiveness of domestic manufacturers, according to finance ministry and National Board of Revenue (NBR) sources.

The expected measures include duty relief on raw materials for several industries, alongside higher import duties on a range of products to protect local producers.

Under the proposals, the existing 45% supplementary duty on imports of float glass – a key raw material used in the production of washing machines, electric ovens and microwave ovens – may be fully withdrawn.

The proposal also seeks to extend existing concessional and duty exemption facilities on raw material imports used in the production of LPG cylinders, auto tanks, valves and bungs until 30 June 2027.

In another move, the existing 10% supplementary duty on imports of synthetic woven fabrics may be withdrawn.

Overall, these expected measures aim to strengthen protective tariff support for local industries while reducing production costs through duty concessions on essential raw materials.

Abul Kasem Khan, chairperson of Business Initiative Leading Development, told TBS that rational reductions in duties and taxes help encourage local production and improve industrial competitiveness.

"When the government reduces duties on raw materials and inputs used in value-added production, it creates positive impacts on local industries, employment generation and the broader economy," he said.

Bangladesh needs a business-friendly tariff structure to support industrial growth and attract new investment amid current economic realities, he said.

"These expected measures will boost entrepreneurs' confidence and encourage production expansion. We hope to see such measures reflected in the budget," he added.

Protection for gypsum board, resin, transformers

To protect the local gypsum board and sheet manufacturing industry, a new 20% regulatory duty has been proposed on imports of those products.

The proposal also includes raising the existing 5% import duty on PVC resin (polyvinyl chloride) and PET resin (polyethylene terephthalate) to 10% to support domestic manufacturers.

Domestic producers say the measures would help reduce reliance on imports and encourage investment and production expansion in local industries.

To strengthen the domestic transformer industry, the government is also considering increasing the import duty on transformers with capacities of up to 1kVA from 10% to 25%, along with a new 5% regulatory duty.

Higher duties on appliances, bicycle parts

To protect the local washing machine industry, a new 20% supplementary duty has been proposed on imports of all types of household washing machines.

The proposal also recommends increasing the import duty on freewheels, a locally produced bicycle component, from 15% to 25%, along with an additional 5% regulatory duty to protect the domestic market.

Protective measures for paper, copper, steel industries

To support local paper manufacturers, import duty on greaseproof paper and glassine paper may be increased from 10% to 25%, with an additional 5% regulatory duty.

The proposal also includes a 10% regulatory duty on imported copper wire and an increase in import duty on copper tubes from 15% to 25%.

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

Lower duties on industrial raw materials

Import duty on five raw materials, including ball clay, a key input for the refractory cement industry, may be reduced to 5%.

The proposal also includes a 1% import duty on linear alkyl benzene (LAB), one of the main raw materials used in detergent production.

Import duty on five raw materials used by the local float glass industry may be reduced from 25% to 15%.

To encourage domestic coffee processing, the government may fully withdraw the existing 5% regulatory duty on bulk imports of coffee extract, essence and preparations.

Higher duties for maize starch, motors and polyester

Import duty on maize starch may be increased from 15% to 25% to support local producers.

A new 10% regulatory duty may be imposed on imported DC motors with capacities below 1,200 watts to strengthen local manufacturing.

The proposal also includes a 5% duty on imports of polyester staple fibre to encourage domestic production of the import-substitute product.

Benefits for tyre, beauty product manufacturers

The government is considering concessional import facilities for two raw materials used by local tyre and tube manufacturers.

For skincare and beauty product manufacturers, the existing 30% supplementary duty on imports of two raw materials may be reduced to 10%.

New concession notification

The government is also considering issuing a new notification on concessional import facilities for industrial raw materials to support industrial expansion and job creation.

Hospitals, universities and other public service institutions may also receive advance tax exemption facilities on imports of capital machinery and spare parts similar to those available to manufacturing industries. Officials expect the move to help reduce costs in the health and education sectors.

Duty benefits for ETP chemicals, coal imports may continue

To encourage environmentally friendly industrialisation, the government is considering extending the existing duty exemption facility on imports of chemicals used in effluent treatment plants (ETPs) until 30 June 2027.

The proposal also seeks to continue existing duty and tax concessions on coal imports for power plants until 30 June 2030.

Md Shaheen Ahmed, president of the Bangladesh Tanners Association (BTA), told TBS that continuing the duty exemption on ETP-related chemicals would help reduce environmental management and operating costs for industries, making it easier to maintain production in line with environmental regulations.

He said the measure could encourage environmentally friendly investment, particularly in leather and other export-oriented industries.

Bangladesh needs strong cooperation among the government, development partners and the private sector -- alongside adequate financing -- to achieve its development goals, Akira Matsunaga, deputy country director of Asian Development Bank’s (ADB) Bangladesh Resident Mission, said yesterday.

“Bangladesh’s development ambitions will require not only financing, but also strong partnerships and effective implementation,” he said at the “Business Opportunities Seminar 2026” in Dhaka, organised by the ADB to highlight opportunities arising from projects funded by it and the World Bank.

“Forums such as today’s seminar help strengthen collaboration among government, development partners and the private sector to deliver sustainable development outcomes,” he added.

The ADB official also reiterated the multilateral lender’s commitment to supporting private-sector participation and strengthening partnerships to advance Bangladesh’s sustainable, inclusive and resilient development.

Jean Pesme, division director for Bangladesh and Bhutan at the World Bank, also underscored the importance of cooperation among development partners, government institutions and the private sector to support Bangladesh’s next phase of development.

SM Jakaria Huq, additional secretary and ADB wing chief at the Economic Relations Division (ERD), reaffirmed the government’s commitment to transparency, fair competition and effective implementation of development-financed projects.

The seminar brought together more than 800 representatives from government agencies, development partners, the private sector, contractors, consultants, suppliers and financial institutions to promote collaboration and enhance participation in development projects.

Among others, SM Moin Uddin Ahmed, chief executive officer of the Bangladesh Public Procurement Authority, and Sangita Ahmed, senior vice-president of the Bangladesh Women Chamber of Commerce and Industry, also attended the programme.

US consumer inflation likely increased at its fastest pace in three years in May as the Middle East conflict raised prices of energy products, which would provide more ​ammunition for the Federal Reserve to keep interest rates unchanged this year.

The anticipated third straight month of strong year-on-year Consumer Price Index readings from the Labor Department ‌on Wednesday is expected to highlight mounting pressure on households as evidence suggests more consumers are dipping into savings to finance their spending. Inflation is likely to outpace wage growth in May for a second straight month, a development that could weigh on overall economic growth.

The soaring cost of living is a political liability for President Donald Trump and his Republican Party, seeking to retain control of Congress in the midterm elections in November. Trump won the 2024 presidential election in ​large part because of his promise to lower inflation, but has seen his approval rating tumble as frustration mounts over his handling of the economy.

“The top-line increase in inflation will outpace ​wage growth for the second consecutive month,” said Joseph Brusuelas, chief economist at RSM. “What that means is Americans are seeing their paycheck decline in real terms, which, if it were sustained, would tend to suggest we’re going to have a challenge around household consumption in the second half of the year.”

The Consumer Price Index likely increased 4.2 percent in the ​12 months through May, a Reuters survey of economists predicted. That would be the largest annual rise in the CPI since April 2023 and would follow a 3.8 percent advance in April. The CPI increased 3.3 percent ​year-on-year in March. It is expected to have increased 0.5 percent on a monthly basis in May after advancing 0.6 percent in April.

The US central bank tracks the Personal Consumption Expenditures Price Indexes for its 2 percent inflation target. All inflation measures are running well above the Fed’s target.

The national average gasoline price increased 8.8 percent in May to $4.60 a gallon, data from the US Energy Information Administration showed. At one point, gasoline prices had jumped by more than 50 percent since the ​US and Israel attacked Iran at the end of February.

Prices have retreated in recent weeks amid a ceasefire, leaving some economists cautiously hopeful that May could mark the peak in the CPI. Though restricted ​shipping in the Strait of Hormuz has raised fertilizer prices, that has not yet significantly pushed up food prices.

“There is a good chance that the year-over-year advance in headline inflation peaks for the moment in May, though, ‌of course, oil prices could surge again depending on the course of events in the Middle East,” said Stephen Stanley, chief US economist at Santander US. Capital Markets.

The report would follow on the heels of news last week that the economy posted a third straight month of above-expectations job growth in May.

The unemployment rate remained at 4.3 percent for a third consecutive month. Though financial markets have started pricing in a rate hike, economists continued to believe that the bar remained high for the central bank to tighten monetary policy.

Some argued that outside high airfares, there were no strong signs of the oil price shock ​bleeding into the services sector.

Excluding the volatile food ​and energy components, core CPI was forecast to have increased 2.9 percent year-on-year in May after rising 2.8 percent in April. The so-called core CPI was projected to have gained 0.3 percent on a monthly basis after rising 0.4 percent.

“If the core was to show some signs of pass through, higher energy costs being reflected into other categories as well, then that would ​be the story that would trigger the Fed rate-hike narrative,” said James Knightley, chief international economist at ING. “We’re in an environment where we’ve got ​a central bank that still considers the monetary policy stance to be somewhat restrictive.”

Part of the anticipated moderation in the monthly CPI rate reflects the fading boost from a one-time adjustment to rent measures after last year’s shutdown of the government prevented data collection. While the artificial intelligence spending boom is driving up prices of computers and software, those have a smaller weighting in the core CPI basket. The weighting is larger in the core PCE inflation basket.

A surprising used cars ​and trucks deflation has also helped to curb goods inflation. Economists were divided on import tariffs, with some viewing the ​pass-through as largely over while others said the duties continued to raise prices, especially those of apparel.

“The economy is nearing the end of the tariff pass-through phase,” said Diego Anzoategui, an economist at Morgan Stanley. “Our estimates suggest tariffs have lifted prices by ​about 63 basis points so far, with total pass-through closer to 70 basis points. We saw early signs of deceleration in March and expect that trend to continue.”

A business-friendly environment is being created where everyone can operate businesses smoothly and generate employment opportunities, says Prime Minister Tarique Rahman while also pledging investment-acceleration measures.

"We want to create opportunities for everyone to do business in a conducive environment and create jobs. The current budget has been prepared with that objective in mind," he told parliament Wednesday.

The Prime Minister says the government has undertaken a series of measures to simplify investment procedures and attract both local and foreign investors.

He made the remarks while responding to a question from Cumilla-10 lawmaker Md Mobasher Alam Bhuiyan during the question-answer session on the fourth day of the second session and first budget session of the 13th parliament. The sitting, which began at 3:00pm, was chaired by Speaker Hafiz Uddin Ahmad Bir Bikram.

The Prime Minister notes that restoring economic discipline and fostering business-friendly environment are essential for building a stronger economy.

He mentions that import-and export-registration services are now being provided online within a shorter timeframe through the Office of the Chief Controller of Imports and Exports.

To strengthen the investment climate, the government has updated the export policy and is in the process of revising the Import Policy Order 2026-2029 to enable foreign investors to enter the market more easily.

The government has also taken steps to remove non-tariff barriers to imports for export-oriented industries. The scope of free-of-charge (FOC) imports is being expanded for both bonded and non-bonded enterprises.

Also, import-payment procedures are being simplified, while importers will be allowed to import goods through contractual arrangements without letters of credit (LCs), irrespective of value limits.

Bangladesh has also adopted trade-facilitation measures in line with international standards to ensure faster and more transparent trade processes through the implementation of World Trade Organisation agreements.

The Prime Minister further says the Bangladesh Investment Development Authority is implementing a range of policy and institutional reforms to attract domestic and foreign investment, improve the ease of doing business and accelerate industrialisation.

Among the key initiatives, the government has moved to integrate the Bangladesh Investment Development Authority, Bangladesh Economic Zones Authority, Public-Private Partnership Authority and Bangladesh Hi-Tech Park Authority to reduce institutional complexities and improve service delivery for investors.

To make Bangladesh a more attractive investment destination, the government has also initiated reforms to simplify capital-and profit- repatriation procedures.

At present, foreign investors often face delays and uncertainty in remitting capital and earnings abroad following share sales, business transfers or closures due to complex valuation requirements and extensive documentation.

A national committee on capital repatriation, formed in coordination with Bangladesh Bank, has reviewed the existing framework and prepared a package of reform proposals. It is now at the final stage of approval.

"The government has also launched a comprehensive overhaul of licensing and approval procedures to make investment processes faster, simpler and more predictable," adds the Prime Minister.

The government is set to propose significant tax concessions on the import of pharmaceutical raw materials in the FY2026-27 budget to enhance the export competitiveness of Bangladesh's pharmaceutical industry.

The budget is also expected to include several measures aimed at reducing dialysis costs for kidney patients. In addition, VAT at the supply stage on cardiac stents and intraocular lenses may be withdrawn to reduce out-of-pocket healthcare expenses.

According to sources at the National Board of Revenue (NBR), the proposal includes adding 17 new basic raw materials to the existing concessionary import facility and reducing their import duty to zero. Stakeholders believe this will help Bangladeshi pharmaceutical products remain competitive in international markets.

To further strengthen the domestic pharmaceutical industry, the budget is also expected to propose zero-duty and zero-VAT treatment for the import of nine new raw materials used in the production of anti-cancer medicines.
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At the same time, the government plans to fully exempt import duties on an additional 51 raw materials used in the production of Active Pharmaceutical Ingredients (APIs). The primary objective is to boost local API production and reduce dependence on imported pharmaceutical ingredients.

Dialysis costs may decline

To lower treatment expenses for kidney patients, the government is considering a proposal to completely withdraw the existing 15% value-added tax (VAT) and 5% advance income tax on imported dialysis filters.

According to NBR sources, if the proposal is implemented, the combined VAT, tax and duty concessions could reduce the cost of each dialysis session by up to Tk800.

The government is also considering a full exemption from the existing 7.5% advance tax imposed on imports of blood tubing sets used in haemodialysis treatment. This measure is expected to significantly reduce dialysis expenses for kidney patients.

Physicians estimate that around 3.8 crore people in Bangladesh suffer from some form of kidney disease. Each year, between 30,000 and 40,000 patients develop kidney failure and require dialysis or transplantation.

A study by the Bangladesh Institute of Development Studies (Bids) found that 92% of families with dialysis patients in Bangladesh face significant financial hardship in covering treatment costs.

VAT on cardiac stents and intraocular lenses may be withdrawn

To reduce high out-of-pocket healthcare expenditure in Bangladesh, the budget is expected to propose the complete withdrawal of the existing 10% VAT at the supply stage on cardiac stents and intraocular lenses.

According to NBR sources, if implemented, the measure could reduce the price of each cardiac stent by up to Tk20,000. Similarly, the price of each intraocular lens used in eye treatment could fall by approximately Tk5,000.

Duty concessions proposed on raw material imports for medical equipment industry

The upcoming budget is expected to propose duty concessions on raw material imports to support the development of Bangladesh's medical equipment and components manufacturing industry.

According to sources at the National Board of Revenue (NBR), the proposal includes setting import duties at 15% on certain essential raw materials and 5% on several other raw materials used in the sector. The government is also considering extending the validity of the related notification until 30 June 2030.

Industry stakeholders say the country's medical equipment industry is still in a developing stage. Duty concessions on raw material imports would help boost local production, reduce import dependence and potentially lower healthcare costs.

According to the Bangladesh Association for Medical Devices and Surgical Instruments Manufacturers and Exporters, the domestic market for medical devices is worth around Tk15,000 crore and is growing at an annual rate of 15%. About 90% of total demand – from syringes to imaging and surgical equipment – is currently met through imports.

Proposal to cut duty on mortuary imports to 1%

The FY2026-27 budget is also expected to propose a significant reduction in import duties on mortuary equipment used for preserving dead bodies.

NBR sources said the existing 25% import duty on mortuary equipment may be reduced to 1%.

Stakeholders noted that mortuary facilities are essential equipment for hospitals, medical colleges and other healthcare institutions. High import duties increase procurement costs and place additional pressure on the healthcare system.

If implemented, the proposal would make mortuary equipment more affordable, enhance hospitals' capacity and improve the management of body preservation facilities.

The issue has gained attention recently after refrigeration units at the morgue of Dhaka Medical College Hospital became inoperative, resulting in the decomposition of around 20 bodies, including unidentified newborns, and causing foul odours.

Proposal to fully exempt duties, taxes on 21 assistive devices

The budget is expected to propose a complete exemption from all duties and taxes on the import of 21 categories of assistive devices used by persons with disabilities.

According to NBR sources, the proposal would fully exempt these special assistive devices from import duty, regulatory duty, supplementary duty and advance income tax.

Stakeholders believe the tax relief would improve mobility and independence for persons with disabilities, enhance their quality of life and reduce the financial burden on families and society.

Proposal to reduce duty on sewage treatment plants to 1%

The upcoming budget is also expected to include a proposal to reduce import duties on sewage treatment plants (STPs) to support modernisation of waste management systems in Dhaka, divisional cities and industrial facilities.

According to NBR sources, the current 5% import duty on STPs may be reduced to 1%.

Stakeholders say the proposed duty reduction would make it easier to establish wastewater treatment infrastructure and play an important role in implementing a circular economy model, particularly in industrial and urban waste management.

Amir Khosru walks a tightrope in making ends meet as he presents today his maiden national budget suiting the BNP-led government's economic priorities amid persistent inflationary pressure, sluggish private investment and weak employment generation.

The fiscal 2026-27 budget also happens to be the first of the BNP-led administration that assumed office following the February-12th general election held against the backdrop of political upheavals and uprising.Politics

The Finance and Planning Minister, Amir Khosru Mahmud Chowdhury, is set to place in parliament at 3:00pm the national budget with a record-high outlay.

It will also be the party's 17th budget since fiscal year 1976-77 and Bangladesh's 55th since independence.

The proposed budget is estimated at Tk 9.38 trillion which is equivalent to around 14 per cent of the country's projected gross domestic product (GDP) for FY2027.

Policymakers are expected to use the budget as key instrument for reviving economic activity, attracting investment and generating employment following a prolonged period of economic challenges from within and without.

The BNP government has repeatedly pledged to restore business confidence by addressing structural bottlenecks and reviving closed industrial units and creating a more investment-friendly environment.

The budget is, therefore, expected to contain a range of fiscal and policy incentives aimed at encouraging both new and existing private-sector enterprises.

Business leaders and economists are closely watching the budget for measures that could stimulate domestic and foreign investment, support entrepreneurship and strengthen industrial production.

Many expect tax incentives, regulatory reforms and sector-specific support programmes to feature prominently in the budget proposals.

At the same time, the government faces a difficult fiscal challenge.

The revenue target for FY2027 is projected at around 10.2 per cent of the GDP, a level many economists believe will be difficult to achieve given the country's historically low tax-to-GDP ratio.

Economists argue that broadening the tax base and revamping tax administration could help increase revenue collection.

However, they caution that achieving a significant jump in revenue within a single fiscal year may prove difficult without comprehensive reforms.

"To my mind, the tax picture might be some brighter once the tax base is widened," says Dr Zahid Hussain, an independent economist.

He also says that borrowing from the banking sector might lead to higher interest rate and crowding-out effect.

While policy measures aim at easing supply-side constraints could help boost investment and employment, "the benefits are unlikely to materialise immediately".

Structural reforms often require time before translating into higher private-sector activity, stronger job creation and sustainable economic growth.

"The budget's broader significance lies in whether it can balance the government's growth ambitions with the need to contain inflation, maintain macroeconomic stability and strengthen public finances," he notes.

The leading economists also say the effectiveness of the proposed measures, rather than their scale alone, will determine whether the government succeeds in reviving business confidence and accelerating economic recovery.

The Bangladesh Bank yesterday appointed a new observer at Islami Bank Bangladesh PLC amid deepening unrest at the country’s largest private bank.
The observer, Md Ashraful Alam, is also a BB executive director. He was appointed under powers vested in it by the Bank Companies Act, 1991, the central bank said.
Mohammad Shahriar Siddiqui, director and assistant spokesperson of BB, confirmed the development, saying the appointment had been made to closely monitor the bank’s overall operations, safeguard the interests of the institution, protect depositors and ensure the greater public interest.

As an observer, Alam will participate in board meetings and other relevant activities, and report his observations on the bank’s operations back to the central bank, added Siddiqui.

Earlier, in December 2022, BB had first appointed an observer at the country’s largest shariah-based bank.

Siddiqui said the banking regulator remains committed to ensuring stability, good governance, transparency, and accountability in the banking sector.

Alam’s appointment is expected to further strengthen confidence and discipline in Islami Bank’s operations, he added.

The development comes as unrest, triggered by the appointment of Md Khurshid Alam as Islami Bank chairman, has gripped the bank. Since the protest started, customers withdrew over Tk 4,240 crore in deposits from the bank within seven days.

Due to the ongoing turmoil, the bank, which had staged a turnaround during the interim government’s tenure, is facing mounting pressure from deposit withdrawals.

On Monday, the bank sought a special liquidity support facility of Tk 10,000 crore from Bangladesh Bank as the country’s largest Shariah-based lender reeled from a surge in deposit withdrawals.

Earlier in the day, the Association of Bankers, Bangladesh (ABB), a forum of bank executives, met with BB Governor Md Mostaqur Rahman over the issue.

After the meeting, Mashrur Arefin, chairman of ABB, said the growing unrest at Islami Bank had taken on a political dimension, raising serious concerns among bankers about its potential impact on the wider financial sector.

He said the situation was eroding confidence in the banking industry and could pose risks to overall financial stability.

On May 24, the eve of the nearly week-long Eid-ul-Azha holiday, the BB appointed Khurshid Alam, a former deputy governor, as chairman of Islami Bank, just hours after the previous chairman resigned.

Khurshid was among the senior BB officials who were forced to leave the central bank by more than 100 protesting officials on August 6, 2024, a day after the fall of the Sheikh Hasina government in the face of a mass uprising.

The appointment has sparked unrest at the bank since June 1, and the situation remains unresolved.

Yesterday, a delegation led by the Conscious Customers’ Forum went to the Ministry of Finance to submit a memorandum demanding the resignation of Khurshid Alam.

The BNP government is set to unveil a series of tax measures in the new budget for fiscal year 2026-27 today, offering incentives for green industries, digital entrepreneurs and technology manufacturers, while imposing higher taxes on tobacco products, conventional fuel-powered vehicles and selected imports.

The budget is also expected to reduce duties and taxes on essential commodities and healthcare-related products, while raising the tax-free income threshold for individuals, according to finance ministry officials familiar with the matter.

Finance Minister Amir Khosru Mahmud Chowdhury will place the Finance Bill 2026 in parliament in his first budget, setting a revenue target of Tk 604,000 crore for FY27, up from Tk 554,000 crore in the current fiscal year.Budget of big ambition

Budget of big ambitionThe budget is expected to outline broader tax reforms for businesses and introduce stricter compliance requirements, including measures to widen the tax net through greater use of Business Identification Numbers (BINs) and Taxpayer Identification Numbers (TINs).

As part of efforts to expand the tax base, the government may propose a 0.20 percent advance tax on the supply of goods to retailers. The amount collected would be small, at Tk 2 for every Tk 1,000 of goods supplied.

The government also plans to continue tariff rationalisation ahead of Bangladesh’s graduation from least developed country (LDC) status.

Import duty may be reduced on 69 product categories, regulatory duty withdrawn on 113 items and supplementary duty reduced or removed on nine products.

Value-added tax (VAT) has also been proposed on 20 previously exempt imported products, while customs valuation and protective measures could increase on a range of consumer and industrial goods.

RENEWABLE ENERGY, EVS AMONG BIGGEST BENEFICIARIES

Renewable energy equipment appears set to be one of the biggest beneficiaries in the new budget.

Import duty and other taxes could be waived or reduced on solar inverters, lithium-ion batteries, battery pack housing, solar photovoltaic modules, and steel and aluminium mounting structures.The proposals would complement plans to keep solar power generation tax-free until 2035 and offer a 5 percent tax rebate to solar electricity users.The electric vehicle (EV) ecosystem could receive similar support.Tax concessions have been proposed for EV manufacturing, battery production, charging infrastructure, and electric buses and trucks. Advance income tax on EV registration may also be reduced significantly.

The total tax on imported electric cars valued at up to $25,000 would fall from 93 percent to 64 percent, while import duties on EV chargers and charging stations would drop from 39.75 percent to zero.

To encourage consumers to switch to cleaner vehicles, the budget may increase the tax on petrol and diesel cars with engine capacities between 1,200cc and 1,600cc to 155.88 percent from 132.36 percent.

Nearly all major duty exemptions proposed for green and manufacturing sectors, including semiconductors, batteries, computers, consumer electronics, EV components and electric buses, would remain in place until 2030 or 2031.

The aim is to give investors a longer planning horizon.

FREELANCERS, CONTENT CREATORS AND STARTUPS

Among the most notable proposals is an expansion of tax benefits for freelancers. Until now, incentives have largely been limited to IT-enabled services.

The government may propose extending those benefits to all categories of freelancing income.

Content creators would also enjoy a full income tax exemption, reflecting the growing importance of Bangladesh’s digital creator economy.

Startup ventures and technology-based businesses could receive a zero percent turnover tax and full VAT exemption on local transactions, service imports and space rental until 2035.

Small and medium-sized enterprises (SMEs) may benefit from higher tax-free income thresholds, with turnover limits rising to Tk 50 lakh for general entrepreneurs and Tk 70 lakh for women and disabled entrepreneurs.

TECHNOLOGY AND SEMICONDUCTOR PUSH

Technology manufacturers also stand to gain. Existing incentives for mobile phone, computer, consumer electronics and digital device manufacturing could be extended until 2030.

The government may propose new benefits for semiconductor design, testing and packaging, signalling an ambition to position Bangladesh in higher-value segments of the global technology supply chain.

The SIM card tax of Tk 300 per connection is likely to be scrapped entirely.

Finance ministry officials estimate the move would reduce revenue by Tk 1,200 crore in the coming fiscal year, but expect the loss to be offset by wider digital inclusion and increased mobile usage.

RELIEF FOR HOUSEHOLDS, HEALTHCARE

The budget’s most immediate impact may be felt by households.

Source tax on rice, wheat, potatoes, onions, garlic, ginger, edible oil, fish and dozens of other staples would be cut to 0.5 percent from rates of up to 5 percent.

It is the government’s most direct intervention yet to ease inflationary pressures that have strained household budgets in recent years.

In healthcare, the proposals are targeted.

The withdrawal of VAT and advance tax on imported heart stents is expected to reduce the price of each unit by up to Tk 20,000.

Kidney dialysis costs could fall by Tk 800 per session following the removal of duties on dialysis filters, while intraocular lenses used in eye surgery could become cheaper by up to Tk 5,000 each.

The pharmaceutical sector could benefit from a further series of duty reductions aimed at lowering production costs and strengthening local manufacturing capacity.

The excise duty exemption threshold on bank balances is also proposed to rise to Tk 4 lakh from Tk 3 lakh, offering some relief to small depositors.

PROTECTION FOR LOCAL INDUSTRY CREATES LOSERS

The new budget may seek to provide greater protection for domestic industries through higher duties and other measures on imported products that compete with local manufacturers.

One key proposal is to increase import duty on raw and processed cashew nuts to 25 percent from the current 1 percent and 5 percent, respectively, with the aim of encouraging local cultivation and processing.

Higher protective measures are also expected on imports of ceramic tiles, sanitary ware, wash basins, cotton and rayon fabrics, PVC-coated textile products, curtain fabrics, cosmetics, foam products, honey and betel nuts.

Tobacco consumers are also likely to face a heavier tax burden.

Taxes and duties on cigarettes and other tobacco products are set to increase, pushing up retail prices.

Imported cigarettes and nicotine-related products may face additional levies as part of efforts to discourage tobacco consumption while boosting government revenue.

Importers of fossil fuel-powered vehicles could emerge as another affected group.

While the budget is expected to offer extensive incentives for electric vehicles, batteries and charging infrastructure, conventional petrol and diesel vehicles are unlikely to receive similar support, signalling a shift towards cleaner transport.

Towfiqul Islam Khan, additional director (Research) at Centre for Policy Dialogue (CPD), said the budget reflects an attempt to balance several politically important and fiscally demanding priorities at a time when revenue mobilisation remains the government’s biggest constraint.

He said persistent pressure on the operating budget continues to limit fiscal flexibility, while the need to finance electoral commitments further narrows room for discretionary spending.

According to him, although the budget signals an intention to stimulate private investment and provide some relief to consumers, these competing objectives also expose underlying tensions in the government’s fiscal strategy.

Khan added that the real test of the budget would not be the measures announced, but the government’s ability to strengthen tax governance, improve the efficiency of public spending and advance long-delayed reforms in public financial management.

Finance Minister Amir Khosru Mahmud Chowdhury today (9 June) said the government may lead to nearly Tk42,600 crore in additional subsidies for the oil, gas, power and fertiliser sectors this fiscal year due to recent tensions involving Iran and instability in the global energy market.

Replying to a question in parliament today, the finance minister said the situation has created additional pressure on the government's subsidy expenditure.

He said the estimated additional subsidy requirement includes around Tk10,258 crore for fuel oil, Tk11,170 crore for gas, Tk19,821 crore for electricity and nearly Tk1,350 crore for fertiliser.

Despite the growing fiscal burden, the government has continued its policy and financial support to protect the general public, agriculture and the production sector, he added.

Amir Khosru said the recent instability in the Middle East, including in Iran, has created both immediate and potential risks for Bangladesh's economy.

"So far, the impact has been most visible in the areas of energy, fertiliser, import costs, transport expenses, inflation, foreign currency management, remittance inflows and overseas employment," he said.

However, he noted that a reliable assessment of sector-wise losses would require coordination of data from the relevant ministries and agencies.

The finance minister said rising international prices of fuel oil, LNG and fertiliser have increased pressure on import and production costs.

Higher energy prices could also raise costs in the electricity, transport, agriculture and industrial sectors, which may indirectly affect market prices and inflation, he said.

He further warned that prolonged instability in the Middle East could pose risks to overseas employment and remittance inflows, as the region remains a major destination for Bangladeshi migrant workers.

The government is closely monitoring the situation, Amir Khosru said, adding that several measures are being taken, including diversifying energy import sources, expanding domestic gas exploration, ensuring the supply of essential commodities, maintaining caution in foreign exchange management and exploring alternative labour markets.

He said the government would take necessary policy and administrative measures once reliable sector-wise damage assessments become available.

Bangladesh Bank (BB) has formed a new Tk 100 billion (Tk 10,000 crore) refinancing scheme from its own funds to boost agricultural production, ensure food security, and create employment opportunities in rural areas.
Under the five-year scheme, farmers will be able to access low-interest loans capped at an 8 percent interest rate.The Agricultural Credit Department of the central bank issued a circular in this regard last night (Monday night), sending it to the chief executives of all scheduled banks.The initiative aims to financially empower genuine farmers and rural entrepreneurs. Small, marginal, sharecroppers (Borga chashi), and women farmers will receive top priority under this fund.To identify genuine beneficiaries, banks will utilise information from the local departments of agriculture, fisheries, and livestock, or the government-issued Farmer Cards.In an effort to ease access, small and marginal farmers will be eligible to secure collateral-free loans of up to Tk 5 lakh solely against the liability of their crops and produce.

Furthermore, instead of immovable property, personal or group social guarantees will be considered as acceptable collateral for women and marginal farmers.

According to the central bank circular, any farmer or client who is a loan defaulter with any bank or financial institution will be disqualified from receiving loans under this scheme.

Additionally, the central bank strictly specified that these loans cannot be used to repay or adjust any existing or past debts.

An individual beneficiary will be permitted to avail themselves of the facilities under this refinancing scheme a maximum of three times.

Tokyo has officially confirmed it will provide Dhaka with $312 million to increase economic resilience and ensure a stable energy supply.
The Economic Relations Division (ERD) signed two documents related to the soft loan with Japan on Tuesday, the Japanese Embassy in Dhaka said in a media statement.

With this, Bangladesh is set to receive the first loan from the Japanese government's announcement of $10 billion in emergency aid for Asian countries in the energy sector following the war in West Asia.
ERD Secretary Md Shahriar Kader Siddiky and Japanese Ambassador to Bangladesh Saida Shinichi signed the “exchange of notes” involving economic resilience and energy sector.

After that, Siddiky and Chief Representative of Japan International Cooperation Agency (JICA) Bangladesh Office Takahashi Junko inked the loan agreement.

When the global energy market saw a growing crisis after the Iran war spread to West Asia, Japanese Prime Minister Takaichi Sanae organised the “Asia Zero Emission Community (AZEC) Plus Online Summit” on Apr 15.

At the conference, she pledged $10 billion in assistance under the “Partnership On Wide Energy and Resources Resilience (POWERR Asia)” initiative.

Addressing the event virtually, Prime Minister Tarique Rahman sought a $2 billion fund from development partners to meet Bangladesh’s immediate energy needs and safeguard economic stability.

On the loan to Bangladesh, the Japanese embassy said: “This timely support, in conjunction with Asian Development Bank, aims to address the socio-economic impacts in the context of recent global challenges, including rising energy prices and uncertainty in energy supply amid the deteriorating situation in the West Asia.”

Through this loan, Japan will support Bangladesh in financial management, improving the investment climate, and ensuring stable energy supply, the statement reads.

These sectors are essential for maintaining economic stability, the pace of reform, and long-term resilience, it adds.

Although most measures proposed in this year's budget have been welcomed as business- and taxpayer-friendly, economists and business leaders say some provisions could increase compliance burdens for businesses and ultimately place additional pressure on consumers.

Among the proposals is a new advance tax collection mechanism under which dealers would collect Tk2 in advance tax for every Tk1,000 worth of goods purchased by retailers.

The government's objective is to bring more small businesses under the tax net. Under the proposed system, a portion of a retailer's annual earnings would effectively be collected in advance.

At the end of the financial year, retailers would be able to adjust the amount against their income tax liability when filing tax returns or seek a refund if they have no taxable income.

However, experts argue that the policy may not work as intended.

They point out that, with a few exceptions, most small retailers do not have Taxpayer Identification Numbers (TINs). As a result, many are unlikely to file tax returns or go through the process of claiming adjustments or refunds for the advance tax deducted from them.

Instead, they may simply add the extra cost to the prices of goods sold to consumers.

For example, if a retailer purchases goods worth Tk5,000 from a dealer, the dealer would collect Tk10 in advance tax under the proposed rate. Although the value of the goods remains Tk5,000, the retailer may effectively treat the purchase cost as Tk5,010 and incorporate that additional expense into the final selling price.

If a business pays Tk1,000 in advance tax over the course of a year, experts believe that amount could ultimately be recovered through higher prices charged to consumers.

The government is also planning to broaden the VAT net by introducing a specific tax regime for relatively small businesses, similar to the previous package VAT system. Details of the collection mechanism will be outlined in a separate regulation after the budget is announced.

According to officials at the National Board of Revenue, businesses under each VAT zone would initially be divided into five categories based on their size and estimated profitability. Monthly VAT payments ranging from Tk1,000 to Tk10,000 would then be imposed.

Business leaders fear that this measure could also lead to higher prices for goods and services.

For example, a business required to pay Tk10,000 in VAT each month would face an annual VAT bill of Tk120,000. To maintain profit margins, businesses may seek to recover at least part of that cost through higher prices, they argue.

A business leader, speaking to The Business Standard on condition of anonymity, said, "If tax is collected from retailers at the dealer level, they may simply add that amount to their purchase costs and pass it on through higher prices. Although the government intends to impose the tax on business income, in reality the burden will fall on consumers."

The same concern applies to the proposed VAT collection system, he said, arguing that it could add both costs and compliance burdens for businesses.

Abdul Wahed, president of the Chapai Nawabganj Chamber of Commerce and Industry, told TBS, "If VAT is collected in this way, it could increase both complications for businesses and opportunities for corruption. Instead of reaching the government treasury, some of the money could end up in the pockets of officials.

"However, we will be able to comment in more detail after seeing the final budget proposals."

Consumer advocates have also expressed concern about the potential impact on households.

AHM Shafiquzzaman, chairman of the Consumer Association of Bangladesh, said any tax or VAT collected from businesses would eventually be passed on to consumers.

"The amount recovered from consumers could be many times higher than the amount collected by the government," he said.

He noted that some traders earn substantial daily incomes and therefore should be brought into the tax net.

"A trader selling eggs at Karwan Bazar can earn Tk10,000 in a single day. So it is reasonable that such businesses pay tax, and that may be why the government is trying to expand the tax base," he said. "But businesses will ultimately pass those costs on to consumers."