The Bangladesh Association of Banks (BAB) has welcomed the government’s effort to recapitalise banks by spending over Tk 40,000 crore in the current fiscal year, but said the move needs to be matched by swift legal recovery of misappropriated assets for lasting effects.

Finance Minister Amir Khosru Mahmud Chowdhury disclosed the figure in his budget speech on Thursday, saying the government had committed the funds to restore the financial health of weak banks.

In a statement on the proposed budget, the BAB, which represents bank sponsors, demanded decisive enforcement against wilful defaulters and transparent treatment of shareholdings acquired through irregular means.

“Depositors’ confidence rests on accountability. Further, there should have been a dedicated budgetary allocation for establishing an Asset Management Company (AMC) to clean up the balance sheets of weak banks, reduce their non-performing loan burden and ease capital shortfall challenges across the sector,” said BAB Chairman Abdul Hai Sarker.

The association of private commercial banks stressed the need to match ambition with discipline and accountability.

“This is a budget of ambition and direction -- one that rightly understands a simple truth: there can be no strong economy without strong banks, and no strong banks without trust,” the association said.

It also welcomed risk-based supervision, the removal of undue influence, the development of bond markets, and the move towards a digital, cashless economy.

The proposed bank resolution framework should include clear safeguards to ensure that parties whose conduct contributed to the distress of financial institutions cannot re-enter the system, it added.

The association stressed that government borrowing from the private banking system should remain disciplined so that it does not crowd out private-sector credit, on which investment, exports and employment depend.

“Private credit must be protected,” the BAB chairman said.

The association called for fiscal policy to reinforce capital rebuilding and prevent its erosion, and said dividend taxation should not discourage institutional investment in the capital market.

The trade body further demanded that provisioning shortfalls should, over time, be treated outside taxable income and that the transition to a cashless, digitally inclusive economy must receive adequate fiscal support.

US and Iranian officials said they had agreed on a framework to end their war, halt the US blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Iran's nuclear program to further negotiations.

"The Deal with the Islamic Republic of Iran is now complete," US President Donald Trump wrote on his Truth Social platform around 5:30 p.m. ET local time in Washington (2130 GMT) on Sunday. His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.

The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.

The precise terms were not immediately known. Sharif said in a post on X that the pact called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."

Lebanon has been a sticking point in negotiations, with Israel and Hezbollah ignoring calls from Trump and others to stop their attacks on each other in recent weeks.

In a statement, the secretariat of Iran's Supreme National Security Council said war and military operations on all fronts, including Lebanon, would end permanently starting on Monday night.

Iran's deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period, including sanctions relief for Iran.

The fate of Iran's nuclear program, another thorny issue, will also be addressed in those later talks, sources previously told Reuters.

There was no immediate reaction to the announcement from Israel, which has said it was not party to the US-Iran talks.

STRAIT TO REOPEN
Trump said the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut down for months, would open on Friday, and that he had ordered the end of the US blockade of Iranian ports.

"Ships of the World, start your engines. Let the oil flow!" Trump wrote.

Oil prices fell on the news. Brent crude futures fell 4% in early trading on Monday, while ​US ⁠West Texas Intermediate slid more than 4.6%. Stock markets in Asia jumped.

Former Biden administration State Department spokesperson Matthew Miller said Trump had made important concessions to Iran to achieve the status quo that existed before he launched the war.

"We have no assurances the nuclear program will ever be addressed, but Iran has shown the world it can take the global economy hostage and get something from the US in return," said Miller.

Thousands of people have been killed, mostly in Iran and Lebanon, since US and Israeli forces first attacked Iran on February 28. Iran has struck Israel and Gulf states hosting US bases and has effectively blockaded the Strait of Hormuz, pushing up global energy prices. US forces have blocked Iranian ports in response.

The Iran war has become a political liability at home for Trump and his fellow Republicans in Congress, with public opinion polls showing Americans deeply frustrated by rising gas prices ahead of November's midterm elections. But Trump has also faced pressure from members of his own party who insist that Iran's nuclear program must be completely shut down.

Republican Senator Lindsey Graham, a leading Iran hawk, praised the deal but said he would be "watching closely" the coming negotiations on Iran's nuclear program.

"Under our law, any nuclear deal with Iran will be sent to Congress for review and a vote," he said. "Congratulations to all in getting us to this point."

During his first term, Trump withdrew the US from a 2015 multilateral Iran deal, negotiated by Democratic President Barack Obama, that lifted sanctions on Tehran in exchange for limits on its nuclear program, including international inspections.

Iran responded by ramping up its enrichment of uranium, producing ​more than 400 kg (around 900 pounds) of material at close to bomb-grade purity. The eventual fate of that uranium is likely to be a key negotiating point during the upcoming talks.

'A VERY DIFFICULT GUY'
The agreement was sealed despite an Israeli strike on Lebanon on Sunday that drew criticism from both Iran and Trump.

Prime Minister Benjamin Netanyahu has differed with Trump over American demands that Israel curb its military action in Lebanon to allow the United States to reach a deal with Iran.

Israel has said it will retain freedom of operations in Lebanon, while Iran has made a full ceasefire there an important component of its demands.

Trump updated Netanyahu on the progress toward a peace deal during a phone call on Sunday, Israel's N12 reported, citing a senior official.

In an interview with the New York Times, Trump called Netanyahu "a very difficult guy" and argued the Israeli leader should thank him for saving Israel from a nuclear-armed Iran.

Leaders outside the Middle East, who have kept a wary eye on the conflict, welcomed the announcement.

In a joint statement, the United Kingdom, Germany, France and Italy said they were prepared to lift sanctions on Iran in response to "clear, verifiable steps" to limit its nuclear program.

"We are clear that ​toll-free freedom of navigation must now be restored in the Strait of Hormuz," British Prime Minister Keir Starmer said. "Iran must never have a nuclear weapon."

Before the deal was announced, a senior Iranian official told Reuters that, under the terms of the draft, the United States would agree to release $25 billion of frozen Iranian assets. The Trump administration has previously said any release of Iranian money would only take place once Iran has fulfilled certain conditions under a peace deal.

A US official, also speaking before the announcement, said the agreement would ultimately lead to the dismantling of Iran's nuclear program, with its stockpile of highly enriched uranium to be destroyed and removed. The senior Iranian official said the draft deal would allow Iran, which denies seeking a nuclear bomb, to dilute its enriched uranium inside the country.

The Chittagong Stock Exchange PLC (CSE) today (Sunday) welcomed the proposed national budget for fiscal year 2026-27, describing it as a timely and bold initiative aimed at economic recovery and building an inclusive economy.Global economy podcast

Speaking at a post-budget press conference held at its headquarters, CSE Chairman AKM Habibur Rahman said the historic inclusion of capital market strategies in the national budget reflected the government's growing recognition of the sector's role in economic development, BSS reports.

He praised the government's emphasis on modernizing market infrastructure and enhancing digital capacity, particularly the initiative to operationalize the country's first commodity exchange.

He said the CSE has already completed the necessary technological and regulatory preparations for launching the commodity exchange and stands ready to support the initiative.

It also welcomed measures aimed at diversifying financial products, including the introduction of Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs) and index hedging instruments.

According to the CSE chairman, the exchange's Next Generation Trading System is fully prepared to accommodate these products, while the proposed transition of the settlement cycle from T+2 to T+0 would significantly improve market liquidity.

While expressing overall support for the proposed Tk 9.38 trillion budget presented by Finance Minister Amir Khosru Mahmud Chowdhury, the CSE put forward several recommendations to further accelerate capital market development.Market trend analysis

Among its key proposals, the exchange sought a five-year tax holiday for the commodity exchange segment, citing the substantial investment required to establish and operate a world-class commodities market.

The CSE also recommended increasing the tax rate gap between listed and non-listed companies from the proposed 7.5 percent to 10 percent to encourage more quality companies to enter the capital market.

To boost new listings, it proposed tax-free income facilities for newly listed companies during their first three years after listing.

In support of the government's digitalization agenda, the exchange suggested reducing withholding tax on technical services provided by non-residents from 20 percent to 10 percent and lowering VAT on software maintenance services from 15 percent to 5 percent.

The CSE further urged the government to retain the existing 20 percent tax rate on dividend income earned by institutional investors, arguing that removing the cap could negatively affect market growth.

Expressing concern over the withdrawal of tax exemptions for zero-coupon bonds, the exchange also called for a policy target to expand the corporate bond market to at least 2 percent of the country's GDP.Personal finance e-book

CSE Managing Director M Saifur Rahman Mazumdar said the proposed budget acknowledged the need to reduce excessive dependence on the banking sector and promote a balanced financial system where the capital market can play a greater role in financing long-term investments and infrastructure projects.

He reaffirmed the exchange's commitment to working closely with the government and regulators to develop a transparent, modern and internationally competitive capital market in Bangladesh.

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.
FE

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 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 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.

Bangladesh must engage global-scale port operators to modernise its ports, improve logistics performance and remain competitive in international trade, Bangladesh Investment Development Authority (Bida) Executive Chairman Ashik Chowdhury said today (13 June).

He made the remark while presenting a paper at the conference titled "Roadmap for Trade, Growth and Economic Diplomacy 2026 – Navigating Risks: Leveraging Resilience" at a hotel in Dhaka.

The conference was jointly organised by the International Trade, Investment and Technology Wing of the Ministry of Foreign Affairs and the Bida.

Referring to the World Bank's global container port ranking, Ashik said Bangladesh ranked 364th among 400 ports worldwide, underscoring the urgent need to improve port efficiency and logistics capacity.

"This tells us our work is cut out, and we are a very proud nation," he said, adding that engaging international-scale operators in port management has become essential to boosting competitiveness.

He said the ranking reflects the scale of challenges facing Bangladesh amid rapidly changing global trade dynamics and stressed that the country must adapt to the pace of change in the global economy.

Acknowledging concerns raised by businesses, Ashik said investors frequently point to gas shortages, logistics bottlenecks and excessive regulation as key obstacles.

He said the government is addressing these challenges through a broader reform agenda and described the proposed FY2026-27 budget as one of the most investor-friendly budgets in recent years, with a strong focus on deregulation.

The Bida chief also highlighted sector-specific reforms, pointing to recent policy changes in the shrimp export sector as an example of targeted efforts to improve competitiveness.

On energy, he said reliable and uninterrupted power supply remains one of the most critical requirements for investors, particularly in a manufacturing-led economy like Bangladesh.

To address the issue, he said the government plans to expand renewable energy generation by allocating unused public land for large-scale solar projects and simplifying rooftop solar installation policies.

Ashik also stressed the need to diversify Bangladesh's energy sources, noting that a dedicated government team is working on long-term solutions in the oil and gas sector.

He acknowledged that Bangladesh is lagging behind by five to ten years in energy infrastructure development and said priority is being given to projects including additional floating storage and regasification unit (FSRU) capacity, a land-based LNG terminal and the expansion of the Eastern Refinery Limited's second unit (ERL-2).

The benchmark index of the Dhaka Stock Exchange (DSE) closed slightly higher on Thursday as investors positioned themselves ahead of the national budget announcement, amid expectations of market-friendly measures and regulatory reforms.

The newly reconstituted Bangladesh Securities and Exchange Commission (BSEC) on Monday withdrew the floor price restrictions imposed on the two companies, marking the end of a controversial market intervention that had remained in place for nearly four years.Regional business directory

Finance Minister Amir Khosru Mahmud Chowdhury unveiled the FY2026-27 national budget in parliament on Thursday afternoon, with investors closely watching for initiatives aimed at revitalising the capital market and supporting broader economic growth.

Investor sentiment also received a boost as the newly reconstituted Bangladesh Securities and Exchange Commission (BSEC) recently lifted the floor price restrictions on Beximco and Islami Bank Bangladesh PLC, bringing an end to a controversial market intervention that had remained in place for nearly four years.

The DSEX, the benchmark index of the premier bourse, increased by 3.57 points, or 0.06 per cent, to close at 5,520.

The DS30 index, comprising leading blue-chip companies, decreased by 7.18 points to 2,072, while the DSES index, which tracks Shariah-based stocks, increased by 0.53 points to 1,114.

On Thursday, market participation improved, with turnover on the DSE rising to Tk 12.39 billion, compared with Tk 12.10 billion in the previous session.

Although Beximco shares hit the lower circuit breaker for a third straight session, Islami Bank rebounded sharply after two days of correction following the withdrawal of the floor price. Their impact on the broader market remained limited.Market trend analysis

Beximco was excluded from the benchmark index in the latest annual rebalancing, while around 88 per cent of Islami Bank's shares are held by sponsor-directors, reducing the stocks' influence on overall market movements.

Market operators said investors are increasingly hopeful that the reconstituted BSEC will prioritise transparency, strengthen corporate governance and restore confidence in the capital market. Repeated government assurances regarding stock market development have also encouraged investors to increase their exposure to equities.

Losers outnumbered Gainers on the DSE floor. Of the 391 issues traded, 157 closed higher, and 189 ended lower, while 45 remained unchanged.

The Chittagong Stock Exchange also ended higher, with its All Shares Price Index (CASPI) declining by 48.50 points to 15,196, while the Selective Categories Index (CSCX) declined by 45.6 points to 9,320.

The highest annual tax rebate on investments in listed securities will be reduced by one-fourth, or 25 per cent, to Tk 0.75 million if the draft Income Tax Act 2027 is approved by parliament.

Under the proposed act, the maximum eligible investment will be capped at Tk 7.5 million a year, with 10 per cent of that amount rebated.

At present, taxpayers are allowed to invest up to 20 per cent of their taxable income or Tk 6.67 million, whichever is lower, to enjoy tax rebates of as much as 15 per cent of investments made in eligible instruments.

The proposed act, however, raises the investable portion to 30 per cent of taxable income while lowering the rebate rate to 10 per cent.

For instance, an investor with a taxable income of Tk 25 million will be able to invest a maximum of Tk 7.5 million in listed securities to avail of a rebate worth Tk 0.75 million. If the taxable income is Tk 5 million, the eligible investment will be Tk 1.5 million - 30 per cent of the income - yielding a rebate of Tk 0.15 million. In other words, only investors with a taxable income of Tk 25 million or above can claim the maximum rebate of Tk 0.75 million by investing Tk 7.5 million in listed companies.

Separate investment ceilings apply for other instruments. Eligible investments in government securities will be capped at Tk 0.5 million, as will investments in mutual funds, while the ceiling for deposit schemes will be Tk 0.12 million.

Under this structure, an investor who has already put Tk 0.5 million into government securities can show a further Tk 7.0 million in listed companies to claim the highest rebate of Tk 0.75 million against aggregate eligible investments of Tk 7.5 million.

However, the proposed act stipulates that investors will not be entitled to a tax rebate if they encash instruments before maturity. A senior official of LankaBangla Securities said this provision may make investors prefer listed companies as a vehicle for claiming tax rebates.

The finance minister's budget for FY27 proposed adopting a digitalised and time-bound initial public offering (IPO) process, but stopped short of offering any new tax incentives to encourage fresh listings - a long-standing demand of market participants.Personal finance e-book

The country's stock market has seen no new listings for the past two years.

Ahead of the budget, stakeholders had submitted a range of fiscal and policy proposals designed to encourage corporate listings, attract investors and deepen market liquidity.

The Bangladesh Merchant Bankers Association (BMBA), for instance, recommended reducing the corporate tax rate for listed companies to 18 per cent and introducing a 15 per cent tax rate for newly listed firms during their first five years in the secondary market. The proposed budget, however, left unchanged the existing five-percentage-point tax gap between listed and non-listed companies.

The budget falls short of addressing a key stakeholder demand by not offering any tax incentives for new listings, said Sumit Podder, secretary general of the BMBA.

He added, however, that tax benefits alone are not sufficient to attract quality companies to the market. "Fair valuation mechanisms and supportive policy incentives remain crucial for attracting good companies to the stock market," said Mr Podder, who also serves as CEO of MTB Capital.

"Many profitable firms continue to stay away from the market due to concerns over pricing restrictions," he said, adding that firms with paid-up capital above Tk 5 billion, annual turnover over Tk 10 billion, or bank borrowings exceeding Tk 5 billion should be classified as "deemed-to-be listed."

Finance Minister Amir Khosru Mahmud Chowdhury proposed a number of measures viewed as broadly positive for the capital market, including tax reliefs, market reforms and sector-specific incentives expected to support corporate profitability, improve cash flows and encourage investment.Regional business directory

One significant shift in tax administration proposed in the budget is the transformation of tax deducted at source (TDS) from a minimum tax settlement mechanism into an advance tax system.

The move is expected to provide substantial relief to brokerage houses and other businesses that have long faced liquidity constraints due to non-refundable deductions at source.

According to BRAC EPL Stock Brokerage, brokerage firms had been trapped in a liquidity crunch under the previous regime, as taxes deducted at source were treated as final settlements, reducing working capital and limiting operational flexibility. The policy change is expected to benefit stockbrokers, merchant banks, asset management companies (AMCs), the Central Depository Bangladesh Limited (CDBL) and stock exchanges. Market participants believe the impact could become more pronounced over the medium term if new listings increase and secondary market turnover improves.

The minister also outlined a roadmap for introducing T+0 settlement in phases, a move expected to boost market efficiency and liquidity. The budget further proposes allowing foreign investors to repatriate profits and transfer proceeds from shares purchased through non-resident investor taka accounts within one working day.

Mr Chowdhury also proposed static and predictable corporate tax rates for the next five years through 2031, providing businesses with greater policy certainty.Business strategy consulting

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, said the overall budget framework is supportive of the capital market.

"Banks, telecom operators, pharmaceutical companies, ICT firms, fuel distributors, power companies, electronics manufacturers and automobile producers are likely to emerge as the biggest beneficiaries of the proposed measures.

A major relief for businesses also came through reductions in withholding tax (WHT) and advance income tax (AIT) on various business inputs and essential commodities," said Mr Shawon.

The telecommunications sector received a boost as the budget proposed reducing withholding tax on mobile network services to 10 per cent from 12 per cent and withdrawing withholding tax on revenue sharing and licence fees paid to the telecom regulator. "The measures are expected to improve earnings prospects for listed operators," Mr Shawon added.

The information and communications technology (ICT) sector stands to gain from the government's push for high-speed internet expansion, 5G rollout and a Tk 5 billion startup fund, with broadband and technology-related companies expected to benefit from increased digital infrastructure spending.Personal finance e-book

Healthcare and pharmaceutical companies emerged as another major winner. The budget prioritised the active pharmaceutical ingredient (API) industry and medical device manufacturing while offering VAT and tax relief on selected healthcare products. Increased public spending on health is also expected to support sector growth.

Fuel distribution and power generation companies are expected to gain from reductions in withholding tax rates on fuel oil supply and electricity purchases, which will improve liquidity and operational cash flows.

The proposed budget further extended VAT exemptions until 2030 for local electronics and appliance manufacturers and maintained protective duties aimed at supporting domestic industries. Automobile and electric vehicle manufacturers also received support through the continuation of VAT benefits and a significant reduction in advance income tax on electric vehicles.

However, not all sectors fared equally well. The tobacco industry may face pressure as the government increased cigarette prices while maintaining high corporate tax rates and surcharges. The introduction of a Track and Trace system is also expected to strengthen tax compliance and curb illicit trade.

The steel sector could also come under pressure following an increase in specific VAT on mild steel products at the production stage, potentially raising costs for manufacturers.Market trend analysis

Textile and garment-related companies received mixed signals. While measures to simplify bond issuance are viewed positively, higher duties on certain synthetic fibre inputs may increase costs for some manufacturers.

The finance ministry has identified revenue shortfall as the biggest domestic risk to Bangladesh economy, warning that persistent revenue gaps could push government debt up by more than Tk12 lakh crore over the next three fiscal years to Tk33.78 lakh crore.

Although the debt is expected to remain within 39% of GDP due to an expanding economy, the ministry said the situation could still pose risks considering the tax-to-GDP ratio.

In its Medium-Term Macroeconomic Policy Statement, the ministry said if the current trend of revenue shortfalls continues, development spending could decline by around Tk96,000 crore by 2029. Private investment could also fall short by about Tk85,700 crore.

Published with the budget documents, the policy statement said the government plans to introduce short-term Islamic Treasury Bills next fiscal year alongside Sukuk bonds to lengthen debt maturity and reduce refinancing risks.

However, the report acknowledged that implementing the strategy would be challenging due to liquidity shortages in the financial sector. It also suggested attracting foreign investment into the domestic debt market to address the issue.

The government on Thursday announced a budget based on a revenue target of Tk6.95 lakh crore for the next fiscal year, a figure that has drawn scepticism among economists.

Centre for Policy Dialogue (CPD) distinguished fellow Debapriya Bhattacharya described the target as "unrealistic" in comments to The Business Standard.

CPD fellow Mustafizur Rahman said mobilising such a large volume of revenue within a single year would be extremely challenging.

He warned that if revenue collection falls short while public expenditure remains unchanged, pressure on both domestic and foreign borrowing would increase.

"In particular, higher external borrowing targets and repayment obligations could have adverse macroeconomic implications," added Mustafizur.

Finance Minister Amir Khosru Mahmud Chowdhury at a post-budget press briefing yesterday said that reforms would be introduced in the National Board of Revenue, including its restructuring, staffing with competent officials, and digitisation.

He added that corruption would be curbed and businesses, including shops and restaurants across the country, would be brought under the tax network to boost revenue collection.

Finance Secretary Khairuzzaman Mozumder said the government would gradually move away from bank borrowing, with a focus on increasing public investment, which is expected to generate higher revenue over time.

Govt borrowing could drag down growth to 6.45%

The Fiscal Risk Assessment Statement chapter of policy statement said that in the past five years, revenue has fallen short of targets by an average of 16%. The gap has been widening and if this trend continues, the budget deficit could rise to nearly 5% of GDP.

The most concerning issue is that the government may need to rely more on borrowing to cover the revenue shortfall, which could in turn squeeze credit flow to the private sector.

According to the Finance Division, this could reduce private investment by around Tk85,700 crore by 2029, dragging down economic growth to 6.45% instead of the projected 7.5%.

To mitigate these risks, the report recommends expanding the tax net, rationalising tax exemptions, digitising tax administration, and strengthening accountability.

It also flags global energy price volatility, high inflation, financial weaknesses in state-owned enterprises, and climate-related disasters as key risks for the economy through 2029.

The economy may be able to absorb these risks individually, the chapter said. However, a combination of shocks could place pressure on growth, budget deficit, and debt situation.

The government plans to maintain its policy of keeping the budget deficit within around 5% of GDP in an effort to avoid excessive borrowing and preserve macroeconomic stability.

However, depreciation of the taka against the US dollar and rising global interest rates could increase the real cost of external debt, said the assessment.

Debt scenario

According to official data, external debt principal repayments stood at $2.61 billion in FY25 and are projected to rise to $3.20 billion in FY26. The finance ministry forecasts that this will further increase to $4.28 billion by FY29.

The repayment burden is expected to rise sharply as grace periods on loans expire, maturities are reached, and the impact of currency depreciation accumulates.

At present, around 91% of Bangladesh's external debt is denominated in US dollars, Special Drawing Rights (SDR), and Japanese yen, with dollar- and SDR-based borrowing is 71%.

As a result, any depreciation of the taka against the dollar could significantly increase debt servicing costs. To address this risk, the finance ministry has indicated plans to explore hedging or exchange rate protection mechanisms in the future.

By 2029, 55.7% of total debt is projected to come from domestic sources, while 44.3% will be external. Although Bangladesh's public debt remains within IMF-recommended safe thresholds, the low tax-to-GDP ratio is increasingly straining repayment capacity, prompting concerns among economists over potential debt vulnerability.

Government projections show the net fiscal deficit reaching Tk3.20 lakh crore by FY29, while remaining within 3.5%-3.7% of GDP.

A significant portion of this financing will come from domestic sources. Net domestic financing stood at Tk1.35 lakh crore in FY25 and is expected to rise to Tk1.84 lakh crore by FY29, though it is projected to remain near 2% of GDP.

Meanwhile, net external financing is projected to increase from Tk55,600 crore to Tk1.36 lakh crore over the same period, while remaining broadly stable at around 1.6% of GDP.

Welcoming the proposed budget, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said it will help restore economic stability and boost investment and the private sector, as the government has prioritised improving the business environment and strengthening energy security.

In its reaction to the Tk 9.38 lakh crore budget, the FBCCI said the targets of 6.5 percent GDP growth and reducing inflation to 7.5 percent can be achieved if sustainable discipline is maintained in the economy.

However, it said achieving the revenue target of Tk 6.95 lakh crore, including Tk 6.04 lakh crore assigned to the National Board of Revenue (NBR), will be challenging due to current domestic and global economic conditions.

The apex trade body said reforms in the NBR are necessary to meet the revenue target while ensuring economic stability, better revenue management and a more investment-friendly environment that supports growth.

It also warned that heavy borrowing from the banking sector could reduce the flow of loans to the private sector, potentially affecting job creation.

The FBCCI added that the government should, as far as possible, rely on low-cost foreign funding to meet its expenditure needs.

It noted that the government will face challenges in raising funds to pay Tk 1.05 lakh crore in bank loan interest and Tk 22,500 crore in interest on foreign borrowing.

High inflation, a low tax-to-GDP ratio, a large volume of defaulted loans, pressure from external debt and an unstable geopolitical situation could also make budget implementation difficult.

To address these challenges, the FBCCI suggested prioritising the operationalisation of investment-friendly economic zones, diversifying exports and markets, developing human resources in the IT sector, reducing the cost of doing business, strengthening the capital market, and ensuring quality and accountability in implementing the Annual Development Programme.

The FBCCI said the government’s plan to sign trade agreements with major trading partners and introduce necessary customs rules is positive, as Bangladesh is set to graduate from the least developed countries (LDC) category to a developing nation in November this year.

It also welcomed the proposal for zero duty on imports for the renewable energy sector and the introduction of a Tk 60,000 crore stimulus package for the private sector.

The trade body said simplifying online VAT return submission, shifting to quarterly returns, enabling online income tax filing and payments, and introducing a national single window will help attract both domestic and foreign investment.

The FBCCI welcomed the proposal to set the corporate tax rate for five years, but said it would have been better if it could be reduced further to 2.5 percent.

It also appreciated treating source tax as advance income tax, but said the minimum tax should be reduced to 0.5 percent from 1 percent.

The trade body further welcomed the proposal to reduce source tax on imports of 60 essential commodities, including rice, wheat, potato, onion, garlic, salt, sugar and edible oil, from 5 percent to 4 percent.

Garment exporters have welcomed the proposed national budget for the fiscal year 2026-27, describing it as a balanced and reform-oriented roadmap aimed at strengthening macroeconomic stability, improving the business climate and supporting long-term economic transformation.

In its reaction to the proposed budgetary measures, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) praised the finance minister for pursuing policy continuity and maintaining economic discipline amid persistent global uncertainties and domestic challenges.

BGMEA, the main trade body representing the country’s largest export earning sector, said proposed budget reflects a shift from a purely growth-driven strategy toward a broader development agenda that places greater emphasis on education, healthcare and social protection.

It said the government sets economic growth target of 6.5 percent for the next year and has outlined 10 strategic priorities, including investment-led employment generation, promotion of a production-oriented economy, deregulation, financial sector stability and energy security.

These priorities are expected to play an important role in supporting industrial expansion, export growth and Bangladesh’s smooth transition from least developed country status, said the BGMEA.

The proposal to maintain tax policy consistency for at least five years and gradually reduce reliance on statutory regulatory orders through the introduction of a risk-based audit system is expected to strengthen investor confidence and encourage fresh investment, it added.

BGMEA appreciated several measures aimed at improving revenue administration and reducing compliance burdens.

These include the introduction of an automated and faceless tax refund system, treatment of withholding tax as advance tax rather than minimum tax, and simplified tax procedures. Such reforms are likely to improve transparency and ease cash-flow pressures for businesses.

It said mandatory online-based single-window services, issuance of licenses within seven days and company registration within 48 hours are expected to reduce bureaucratic hurdles and lower the cost of doing business.

The association also welcomed initiatives to facilitate profit repatriation and expedite work permits for foreign professionals.

The trade body further welcomed the reduction of tax on recycled products from three percent to one percent and the continuation of duty exemptions on effluent treatment plant chemicals, measures that are expected to encourage environmentally responsible manufacturing.

It also urged the government to withdraw the proposed 5 percent import duty on polyester staple fibre, along with additional duties on PVC resin and PET resin, citing the growing export potential of man-made fibre-based garments.

The government has announced a wide-ranging deregulation programme aimed at cutting red tape, lowering compliance costs and improving Bangladesh’s business climate as the country prepares for graduation from least-developed country (LDC) status.

The reform package, unveiled in the budget speech of Finance Minister Amir Khosru Mahmud Chowdhury on Thursday, covers investment approvals, company registration, taxation, customs, banking, capital markets and construction permits.

Businesses have long complained about lengthy approval processes, overlapping regulations and cumbersome compliance requirements that delay investment decisions and raise operating costs.

SEVEN-DAY DEADLINE FOR APPROVALS

A key feature of the reform package is the introduction of strict timelines for government approvals and licences.

The government plans to make the online Single Window platform mandatory for business approvals and licensing. From application submission to licence issuance, all procedures will have to be completed within seven days.

If a government agency fails to provide a required opinion, clearance or no-objection certificate within the stipulated period, the application may be processed on the assumption that consent has been granted, where applicable.

Authorities also plan to introduce “plug-and-play” facilities in selected industrial and economic zones, allowing investors to set up factories and begin production more quickly.

FASTER BUSINESS START-UP SERVICES

The government intends to simplify company registration by moving name clearance, application submission, fee payments and certificate issuance online. Company registration is expected to be completed within 48 hours.

Small and new businesses may be allowed to start operations with provisional approvals and complete remaining compliance requirements within six to 12 months.

Work permits for foreign experts and skilled professionals are set to be issued within seven days, while investor visas will be processed within 10 days. The government is also considering five-year multiple-entry visas for eligible investors and project personnel.

To facilitate large investments, agencies such as Bida, Beza, Bepza and BSCIC will assign dedicated support teams and case managers. A grievance redress mechanism and a 24-hour investor help desk are also planned.

TAX ADMINISTRATION GOES DIGITAL

The deregulation drive includes measures to simplify tax and VAT compliance. From the next fiscal year, corporate taxpayers will be able to file returns online, while excess tax deducted at source will be refunded directly to bank accounts through an automated system.

Tax and VAT audit selection will be automated using risk-based software, while tax residency certificates for foreign investors will be issued online through the National Single Window.

For VAT, online filing will become mandatory, simplified returns will be introduced for small businesses, and the government is considering quarterly instead of monthly VAT submissions.

CUSTOMS PROCEDURES TO BE SIMPLIFIED

Several reforms target customs administration and bonded warehouse facilities.

The government plans to extend bond facilities beyond the readymade garments sector to other export-oriented industries. Annual bond audits for compliant garment exporters may be withdrawn, while bond validity periods in some sectors will be extended.

Ten sectors, including motorcycles, speedboats, fish processing, handicrafts, diversified jute products and sanitary products, may be allowed to import raw materials against bank guarantees without obtaining bond licences.

Authorities also plan to reduce customs paperwork, expand self-assessment facilities and allow accredited private laboratories to conduct product testing alongside government facilities to reduce port congestion and delays.

EASIER PROFIT REPATRIATION

To improve investor confidence, the government intends to simplify rules governing profit repatriation and capital transfers.

Applications related to the repatriation of profits from foreign investments will be processed within 30 days. Requirements for share transfers and capital repatriation in unlisted companies will be eased, while certain transactions will no longer require prior approval from Bangladesh Bank.

The reform package also proposes simplifying foreign trade payments, expanding digital lending and cashless transactions, and easing regulatory requirements for banking services.

CAPITAL MARKET AND CONSTRUCTION APPROVALS

The government plans to streamline IPO approvals through digital platforms, reduce documentation requirements and review the possibility of direct listing for eligible companies.

Measures are also proposed to expand the corporate bond market and strengthen participation by institutional investors.

Construction, environmental and fire-safety approvals will be integrated into a single online platform. A risk-based approval system will be introduced so that low-risk projects receive faster clearances while higher-risk projects continue to undergo detailed scrutiny.

HIGH-LEVEL TASK FORCE

The government says a high-level task force will oversee implementation of the deregulation programme. A dedicated website will also be launched to track progress and allow businesses to report delays or irregularities in service delivery.

Commenting on the government’s deregulation initiatives, M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the new government appears to be treating deregulation as a key reform tool for creating a more business-friendly environment.

He welcomed the approach, noting that Bangladesh’s business environment is burdened by unnecessary and outdated regulations, as well as red tape arising from weak regulatory enforcement.

Reaz said deregulation-driven reforms could involve removing redundant rules, simplifying existing regulations and allowing greater self-regulation by industry bodies such as the Bangladesh Garment Manufacturers and Exporters Association.

Such measures, he said, would reduce the time, cost and procedural burden of regulatory compliance for businesses, making government services faster, easier and more competitive.Bangladesh Chamber of Industries President Anwar-ul-Alam Chowdhury Parvez also welcomed several of the proposed measures, but questioned whether they could deliver results without deeper structural reforms.

Manufacturers remain more concerned about uninterrupted gas supply and a stable banking sector than fiscal incentives, he said.

Persistent energy shortages, rising non-performing loans, weak investor confidence and the absence of a clear roadmap for banking reforms continue to weigh on business sentiment, he noted, adding that success would ultimately depend on implementation capacity and institutional reforms.

The finance minister said in his budget speech that the government wants to make the capital market vibrant. But a number of proposed tax changes could push institutional and retail investors away from shares and into safer investments such as government securities.

Under the proposed budget for fiscal year 2026-27, corporate investors would lose the preferential 20 percent tax rate on dividend income from shares and instead pay tax at their regular corporate rates.

For banks, that could mean paying 37.5 percent tax on dividend income instead of 20 percent.

The second proposed change affects individual investors. Retail investors currently receive a 15 percent tax rebate on stock market investments, but the budget proposes reducing that to 10 percent.

The maximum investment eligible for the rebate would also be lowered to Tk 7.5 lakh from the current Tk 10 lakh.

Moreover, income or discounts earned from zero-coupon bonds, a type of debt instrument purchased at a discount and redeemed at full value at maturity, are currently exempt from income tax for all investors. The FY27 budget proposes scrapping that exemption.

According to market analysts and asset managers, these proposed tax measures could send the wrong signal to investors at a time when the government is trying to revive the capital market.

“Both of the proposed tax measures for corporates and retail investors are negative for the capital market,” said Ali Imam, managing director and chief executive officer of Edge Asset Management.

However, he said the proposed tax on corporate dividend income would have a greater impact because institutional investors are already limited in the market. The additional tax would further discourage them from investing.

CORPORATE TAX CHANGES ON DIVIDEND INCOME

At present, corporate investors pay a 20 percent tax on dividend income earned from stock market investments. If the provision is abolished, they will instead pay tax according to their respective corporate tax rates.

For example, if Bank A invests in a listed company, Company B, and receives Tk 100 in cash dividends, the bank currently pays Tk 20 in tax on that dividend income, even if its corporate tax rate is 37.5 percent.

If the provision is removed, the bank would have to pay tax at 37.5 percent on the same dividend income.

Banks currently make up the bulk of institutional investors in the stock market and are therefore likely to be the hardest hit by the measure.

Moreover, with treasury bond yields remaining attractive, banks and other institutions may choose risk-free government securities over stock market investments.

Edge Asset Management CEO Ali Imam said dividend income represented a distribution of profits paid from earnings that had already been taxed.

“Therefore, imposing an additional tax on dividend income is illogical in itself, as the underlying profits have already been taxed. Increasing the tax rate further amplifies the negative impact, effectively creating a double burden on investment returns,” he added.

Iftekhar Alam, president of Bangladesh Merchant Bankers Association (BMBA), said investors could shift their funds if returns on other securities are higher.

However, he said the country lacks sufficient investment vehicles.

Alam said there has been positive sentiment in the market since the new commission took office recently and expressed hope that investors would remain in the stock market.

Saiful Islam, president of the DSE Brokers Association (DBA), urged the authorities to retain the tax benefits currently available to stock market investors for at least another couple of years, as the market is undergoing a transformation and rebuilding.

BUDGET OTHERWISE WINS MARKET APPRECIATION

In his budget speech, Finance Minister Amir Khosru Mahmud Chowdhury said the government would work to reduce the private sector’s excessive dependence on bank financing and make the IPO process time-bound and digital.

According to a budget analysis by Sheltech Brokerage Ltd, these steps would strengthen the role of the capital market within the financial system, resulting in greater market depth and improved liquidity.

It says the digital IPO process would reduce approval times, lower compliance costs, increase the attractiveness of listing and potentially expand the IPO pipeline.

The budget also outlines plans to modernise market infrastructure by gradually shifting from the existing T+2 settlement cycle to T+0 settlements. Non-Resident Investors’ Taka Accounts (NITA) accounts would also be simplified.

Sheltech Brokerage said these measures could facilitate foreign investment inflows and improve liquidity, although they might also increase market volatility.

Meanwhile, the Dhaka Stock Exchange (DSE) welcomed the national budget, saying the measures would help develop the country’s capital market and create a more investment-friendly environment.

In a statement issued on budget day, DSE Chairman Mominul Islam expressed gratitude to the government for prioritising the restoration of investor confidence, strengthening market governance and addressing long-standing concerns of market stakeholders, saying these steps reflected a strong commitment to the sustainable development of the capital market.

He said the proposed measures to improve coordination among regulatory agencies and institutions linked to the capital market would enhance efficiency, transparency and accountability, helping build a stronger and more integrated market infrastructure.

The government aims to raise the creative economy’s contribution to the country’s gross domestic product (GDP) to 1.5 percent, viewing the largely untapped sector as a potential source of growth, jobs and export earnings, according to Finance Minister Amir Khosru Mahmud Chowdhury.

Speaking at an economic diplomacy conference in Dhaka yesterday, he said Bangladesh should invest more in culture, arts, entertainment and design to diversify its economy.

Drawing a comparison with the United Kingdom’s thriving creative industries, the minister said creative products and services generate significant economic value and serve as an important source of soft power.

According to UNCTAD estimates, the global creative economy accounts for about 3 percent of world GDP, or around $2.25 trillion. In India, the sector contributes around 1.5 percent of GDP.

“Bangladesh possesses strong creative talent but has yet to adequately protect, promote and commercialise it,” said Khosru at the conference, titled “Roadmap for Trade, Growth and Economic Diplomacy”, jointly organised by the foreign ministry and the Bangladesh Investment Development Authority (Bida) at Pan Pacific Sonargaon Dhaka.

In his proposed budget for fiscal year 2026-27, the finance minister outlined the 1.5 percent target, alongside a 10-year investment strategy and time-bound action plans aimed at creating 5 lakh new jobs in the creative economy.

Currently, there is little data available on how many activities such as performing arts, design, stand-up comedy and other creative pursuits contribute to the economy.

The finance minister said there are plans to establish a dedicated “theatre district” on 150 acres of land. Such a hub would create new opportunities for spending and economic activity while strengthening the country’s cultural influence.

He highlighted the budget’s focus on developing the creative economy by supporting artisans, designers, performers and cottage industry entrepreneurs through financing, skills development, branding support and access to digital marketplaces.

“We have to protect it, promote it and monetise it,” he said.

He also spoke about streamlining business approvals and deregulation. Khosru said deregulation is central to the government’s efforts to create a more business-friendly environment.

Responding to concerns from foreign investors about higher taxes on compliant businesses, Khosru said the government’s priority is to expand the tax net rather than increase the burden on existing taxpayers.

He added that reforms, including separating tax policy formulation from tax administration, are aimed at improving efficiency and making tax collection more predictable.

He called for a rethink of Bangladesh’s public finance architecture, citing rising borrowing costs and growing interest payments.

Khosru urged greater reliance on the capital market for large investments and said state-owned enterprises should raise funds independently.

He also pledged financial sector reforms and faster regulatory simplification to improve the business environment.

Foreign Minister Khalilur Rahman said Bangladesh must redesign its international economic engagement to cope with slowing global trade and growth, geopolitical tensions, climate risks, rising protectionism and supply chain disruptions.

He cautioned that weaker demand in major export markets, high borrowing costs, climate vulnerability and the global energy crisis pose significant challenges.

Developing countries, he noted, face much higher financing costs and remain vulnerable to volatility in global financial markets.

Rahman said the government’s strategy focuses on stabilisation, reforms and economic transformation, while assuring investors and development partners that Bangladesh remains open for business.

Bida Executive Chairman Ashik Chowdhury said Bangladesh’s biggest achievement over the past year was restoring democratic accountability through a free and fair election, which had strengthened policy stability and investor confidence.

He outlined reforms to support an investment-led growth strategy aimed at creating more than 1 crore jobs, including reducing factory permit approval times to 14 days, expanding digital services and streamlining regulatory procedures.

Acknowledging energy and logistics constraints, he said Bangladesh would accelerate solar power projects, diversify energy sources and fast-track LNG infrastructure development.

He also announced plans to privatise or develop partnerships for around 20 underperforming state-owned enterprises.

“The biggest challenge is execution,” he said.

LGRD and Cooperatives Minister Mirza Fakhrul Islam Alamgir said the government is committed to building a self-reliant and resilient industrial economy in which every citizen could share in prosperity and dignity.

He described the proposed budget as a roadmap towards that goal and said small and informal businesses would be promoted as important drivers of growth.

NBR Chairman Md Abdur Rahman Khan said Bangladesh must raise domestic revenue to support economic transformation, but cautioned against tax policies that could undermine business growth and employment.

He said reforms are focused on lowering compliance costs, simplifying procedures and helping businesses expand. Exporters would receive broader bonded warehouse facilities, while automation is being expanded across tax administration.

More than 45 lakh taxpayers filed returns online last year, while more than 12 lakh users obtained licences and permits through the National Single Window platform, he said.

Among others, Shama Obaed Islam, state minister for foreign affairs; Humayun Kabir, foreign affairs adviser to the prime minister; Mahadi Amin, adviser to the prime minister; Jahrat Adib Chowdhury, member of parliament; Asad Alam Siam, foreign secretary; and M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, spoke in separate sessions.

Senior government leaders, diplomats, development partners and private sector representatives attended the event.

SpaceX jumped 23% in its Nasdaq debut on Friday, as investors piled in to the world's largest ​IPO and bet on Elon Musk's sprawling empire spanning rockets, internet service and AI.

The stock was last trading at $166 a share after opening for trading at $150, making SpaceX ‌the sixth-largest US company, with a market value above $2 trillion.

The company's debut is widely viewed as a dress rehearsal for a new generation of mega-listings, with market participants watching for signals on investor appetite ahead of forthcoming IPOs for AI heavyweights Anthropic and OpenAI.

SpaceX's stock performance was being closely scrutinized in part because some bankers said the IPO market could face difficulties if SpaceX shares close below Thursday's pricing level of $135 a share.

The landmark listing cemented Musk's status as ​the first trillionaire ever - even though the firm posted a loss of nearly $5 billion last year and generated only a fraction of the revenue brought in by similarly valued tech ​giants.

"Elon deserves an extreme premium because of his track record and his vision for calling technology trends early," said Shaun Maguire, a Sequoia Capital partner ⁠who led the firm's investment in SpaceX. At the IPO price its $2 billion investment would be worth over $20 billion, a person familiar with the matter told Reuters.

SpaceX President Gwynne Shotwell and Chief ​Financial Officer Bret Johnsen rang the Nasdaq opening bell earlier on Friday.

World's largest IPO

The IPO is a culmination of Musk's long-held ambitions in space and technology, and has stood out for rewriting Wall Street's IPO ​playbook and drawing legions of retail investors into the market.

At $75 billion, the deal's proceeds were more than double those of Saudi Aramco's record-setting 2019 IPO.

The valuation could rise further should underwriters exercise their right to sell additional shares, a decision typically made within 30 days after the offering.

Although SpaceX may have to wait for entry into the S&P 500, its expected fast-track inclusion in the Nasdaq 100 will soon make it a major holding for passive funds ​and ETFs that track the index, creating a fresh source of demand for its shares.

"We have to go back 100 years to get comparable entrepreneurs. He's a visionary unlike others, and he executes ​extremely well," said Joel Shulman, CEO of ERShares, which manages an ETF that has an exposure to SpaceX.

It will take about a month before it gets added to that index under Nasdaq's new fast-entry rules, as ‌opposed to a ⁠typical wait of as much as a year.

Some analysts expect SpaceX's debut to trigger a reshuffling of investor portfolios, creating selling pressure on other technology heavyweights as funds rotate into the stock. On Friday, shares of other space firms and satellite companies declined sharply, reversing gains spurred by SpaceX's April IPO filing, with Planet Labs down 8% and EchoStar down 14%.

A $28.5 trillion market opportunity

For all the excitement surrounding the IPO, determining what SpaceX is actually worth remains a difficult valuation exercise.

SpaceX said its market opportunity spans $28.5 trillion, a figure it called the largest in human history. With its leading position in space - ​the firm says its operation is responsible for ​more than four-fifths of the mass launched into ⁠orbit over the past three years - and revenues from Starlink, some investors said it has a strong foundation upon which to build.

John Belton, portfolio manager at Gabelli Funds, said the best comparable to SpaceX is Musk's electric vehicle company Tesla, as each has an established business and "a moonshot opportunity on ​the other side."

"For Tesla, that's things like humanoid robotics and other future applications. For SpaceX, it's the AI business," he said.

With revenue of $18.7 ​billion in 2025, the company's ⁠market cap puts its price-to-revenue ratio at a lofty 94. Some analysts have already issued positive ratings on the company. Morningstar analysts this month said it is more fairly valued at around $780 billion, and CFRA on Friday started coverage with a sell rating.

"This is not a name you're buying based on fundamentals. For me, the analogy is Amazon. This was a company that changed the way we live," said Nancy Tengler, CEO ⁠and CIO ​of Laffer Tengler Investments. "If the stock drops to $100, that's not ideal, but it wouldn't change our long-term view. We want ​to participate."

Bangladesh may need two years to take off from the present miasma and make the economy get full stability and prosperity, says Finance Minister Amir Khosru Mahmud Chowdhury.

"The country's economy will need two years from where it stands now. After that, the economy will stabilise and fully turn around in the fourth and fifth years."

He came up with the optimism a day after presenting in parliament an upscale Tk 9.38-trillion national budget replete in projected upgraded macroeconomic parameters and a wide recipe of reforms to get to the goal.

At a post-budget press conference held Friday in Dhaka, the finance and planning minister highlighted government intent to reform the country's public-finance architecture and explore alternative sources of funding to lower borrowing from banking sector.

"This year we have reduced bank borrowing by Tk 60 billion, and once the new public finance is fully designed, alterative sources will have significant contributions to the funding," he told journalists.

The minister in his budget speech Thursday said that Tk 1.12 trillion (net) will be borrowed from the banking system, down by Tk 60 billion from the revised budget of the current year (2025-26)Regional business directory

He notes that the proposed budget for fiscal year 2026-27 has been designed as an inclusive one aimed at bringing all sections of society into the economic mainstream.

"No class, profession, religion or caste is outside the scope of the budget this time," he told the press about the maiden budget of the Tarique Rahman-headed government that assumed office amid uprising-spurred popular aspirations for sociopolitical and economic recast.

Mr. Khosru says preparing the budget has been particularly challenging because of severe time constraints and resource constrains.

"Normally, the budget-preparation process takes at least six months. We had only one and a half to two months. Despite that, we completed the task with the cooperation of all concerned, including the journalists."

He notes that this budget has been prepared in a fundamentally different political and economic environment. "By budget, we basically mean a reflection of the will of the people."

The minister says the new government's objective is to build a more people-oriented economy rather than one benefiting only a limited group of individuals or businesses.Global economy podcast

He claims the budget includes targeted allocations, programmes and implementation plans for different social and professional groups despite resource constraints.

Mr Khosru also highlights shifts in the global economic landscape, saying that the world is gradually moving away from a rules-based system towards greater protectionism. "This year's budget has been formulated keeping those global changes in mind."

Responding to questions on inflation, the finance minister said effective policies, improved management and lower business costs would be more effective than administrative crackdowns in controlling prices.

"There is no alternative to strengthening the supply system, reducing inefficiencies and implementing reforms."

He links the recent inflationary pressures to a combination of international and domestic factors, including global conflicts, higher import prices, shortages of capital in the banking sector and money laundering which have increased the cost of funds.

"High borrowing costs, port inefficiencies and logistical expenses continue to raise the cost of doing business," he told the journalistsPersonal finance e-book

"It can take six months to a year to establish a company or obtain the necessary approvals. Businesses ultimately pass those costs on to consumers," he further explains the price hikers.

The government has already initiated regulatory reforms aimed at lowering business costs and improving efficiency.

Mr Khosru stresses the importance of maintaining an efficient supply chain and building strategic reserves of key commodities.

Long-term planning and stronger buffer stocks for fuel, food and fertiliser are underscored and that Bangladesh should maintain at least three months' energy reserves to strengthen energy security.

In the past, he says, excessive reliance on spot purchases often left the country exposed to volatile prices.

"With long-term planning, adequate storage facilities and strategic stocks, costs can be reduced substantially."

The minister announces plans for deregulation, overseen by a high-powered taskforce.Politics

"A dedicated online platform will allow businesses and citizens to report licensing and regulatory obstacles, enabling authorities to respond quickly."

The custodian of exchequer had a word on corruption, an incendiary issue in all quarters. He thinks implementing new pay scale for the government officials and employees could help reduce incentives for corrupt practices.

"When people face shortages, there is naturally a tendency to resort to corruption. There is no point in denying this reality."

The finance minister says pressure on living standards, particularly among low-income households, has prompted the government to allocate the largest-ever amount for social protection and welfare programmes.

Significant resources have been earmarked for family-support schemes, agriculture, universal healthcare and primary healthcare services.

He mentions that employment generation and skills development remain central priorities of the budget.Entrepreneurship resources

Major investments are being planned in education, technical training and vocational programmes to help workers secure higher-paying jobs both at home and abroad.

To support the rural economy, the government plans to provide financing, training, design support, and market access to traditional occupations under a new "Creative Economy" initiative.

This administration places greater emphasis on employment creation and quality-of-life improvements rather than pursuing large-scale megaprojects.

"Value for money and employment generation are being considered in every project," he says.

A major component of the government's strategy involves developing Bangladesh's creative economy as a new growth driver.

Mr. Khosru mentions plans for an integrated creative centre on 160 acres in Purbachal, bringing together theatre, arts, design, entertainment and cultural activities.

The project aims to create jobs, attract visitors and transform culture into an economically productive sector.Regional business directory

"We have to monetise creativity."

The government is launching an investment programme worth around Tk 8.0 billion to support the initiative.

The minister argues that Bangladesh possesses significant cultural assets, including music, folk traditions and performing arts, but has yet to commercialise them effectively.

He points to the global success of Korean music and drama industries as examples of how cultural products can generate export earnings and international influence.

Thousands of artists, musicians, actors and other creative professionals currently lack sufficient income opportunities, he says, adding that the new programme would help create sustainable livelihoods.

Responding to questions about tourism, Mr. Khosru said domestic tourism offers substantial untapped potential.

While foreign tourist arrivals remain limited, he argues that stronger entertainment and tourism infrastructure could stimulate economic activity and improve quality of life.Personal finance e-book

"Bangladesh is also lagging behind in soft power," he says. "Our goal is to create opportunities through culture and entertainment that generate employment, support growth and strengthen the country's global presence."

Present at the news conference were Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmud Tuku, Information and Broadcasting Minister Zahir Uddin Swapan, Education Minister Dr. ANM Ehsanul Haque Milon, Agriculture, Fisheries and Water Resources Minister Mohammad Amin Ur Rashid, Health Minister Sardar Mohammad Sakhawat Hossain and State Minister for Finance and Planning Jonayed Saki.

Also present were Prime Minister's Adviser Mahdi Amin, Posts, Telecommunications and Information Technology Adviser Rehan Asif Asad, Cabinet Secretary Dr. Nasimul Ghani, Bangladesh Bank Governor Md. Mostaqur Rahman, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan and Prime Minister's Special Assistant on Investment and Capital Market Tanvir Ghani.