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Import duty may be reduced on 69 product categories, regulatory duty withdrawn on 113 items and supplementary duty reduced or removed on nine products.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

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.

A litmus test comes for a BNP regime after 19 years as the new government prepares to present tomorrow a hugely deficit budget after return to power through the much-hyped February-12th polls.

A BNP-led government had last presented its budget for the nation for the fiscal year 2006-07 under then finance minister M. Saifur Rahman.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury is expected to place his maiden budget for FY2026-27 in parliament tomorrow, against the backdrop of political upheavals and economic disruptions.

The proposed budget size has been set approximately at Tk 9.38 trillion with a projected deficit of Tk 2.43 trillion, according to some officials at the finance division.

To finance the deficit, the government pins hope on mobilising Tk 1.27 trillion, or about 52 per cent of the gap, from domestic sources, mostly from banking sources. The remaining Tk 1.16 trillion, or around 48 per cent, is expected to come from foreign loans and grants.

Of the domestic financing target, Tk 1.12 trillion is likely to be borrowed from the banking system while Tk 150 billion will be raised through savings certificates and other sources.Politics

The budget is expected to be presented under the theme 'Economic Democratisation and Deregulation: Bangladesh's Journey towards a Trillion-Dollar Economy'.

The proposed budget will be the first full-fledged fiscal plan of the BNP-led administration and is expected to be presented in the presence of Prime Minister Tarique Rahman and other MPs-mostly new to the parliamentary business and budget-making.

The government has set GDP-growth target at 6.5 per cent for FY2026-27 and aims to bring inflation down to 7.5 per cent.

However, inflation remained elevated at 9.42 per cent in May, according to the latest data from Bangladesh Bureau of Statistics (BBS).

Total revenue mobilisation which has an ambitious target of Tk 6.95 trillion is also anticipated to remain a major concern.

Data from the National Board of Revenue (NBR) show that the revenue shortfall reached Tk 1.045 trillion during the first 10 months of FY2025-26.

Against a revised target of Tk 4.31 trillion, revenue collection stood at Tk 3.27 trillion through April, highlighting the difficulty of achieving fiscal targets "amid a challenging economic environment", economists predict.

They say curbing inflation, strengthening revenue collection and reducing reliance on bank borrowing will be among the government's key economic priorities in the coming fiscal year.

"The budget will be closely watched for signals on whether the government intends to continue its reform agenda or not," says Dr Mustafizur Rahman, distinguished fellow of the CPD.

Private investment, which believed to remain at the bottom, could gain momentum if the budget includes measures to stimulate investment activity, Dr Rahman said recently.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday identified the volatile global situation, US reciprocal tariffs, high bank interest rates, poor port operations, and LDC-related issues as the main reasons for the decline in garment exports over the past year.

"Both domestic and international factors are responsible for the slowdown," said BGMEA President Mahmud Hasan Khan after an emergency board meeting on the export slowdown held at the BGMEA office in Dhaka.

In the July–May period of the 2025–26 fiscal year, garment exports totalled $35.31 billion, posting a 3.41 percent year-on-year fall, according to the Export Promotion Bureau.

Khan said weakening global demand had prompted Western retailers and brands to hold back orders, as unsold inventory piled up on their shelves.

Uncertainty over US President Donald Trump's reciprocal tariffs — which were revised several times — compounded buyers’ hesitation.

The US–Israel war involving Iran disrupted shipment routes, raised air freight costs, extended lead times, and reduced buyer visits to Bangladesh, Khan said.

Small and medium enterprises were hit hardest as brands grew cautious about placing orders.

On the domestic front, high bank interest rates have eroded slim profit margins, discouraging entrepreneurs from expanding operations. An energy crisis has also forced factories to run at 60 to 70 percent capacity.

Bangladesh's impending graduation from least developed country (LDC) status has added further uncertainty, as buyers remain unsure whether the government's application for a three-year deferment will be granted.

Studies suggest Bangladesh could lose $17.5 billion in annual exports — 73 percent of which is LDC-induced. The country also lacks GSP Plus access to the European Union, where 49.15 percent of its apparel is destined.

Khan said he plans to prepare a policy paper and consult stakeholders, trade analysts, and economists before engaging the government on remedial measures.

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."

The Directorate General of Drug Administration (DGDA) has revised the prices of cardiac stents, a critical medical device used in the treatment of heart disease, reducing the cost of several commonly used products.

The revised prices were announced in a notification signed by DGDA Director General (Additional Secretary) Md Alamgir Hossain today (9 June).

A cardiac stent is a tube-shaped device inserted into the coronary arteries to keep them open and maintain blood flow to the heart in patients suffering from coronary artery disease.

According to the notification, the prices were re-fixed based on recommendations from a committee formed under the Health Services Division of the Ministry of Health and Family Welfare.

The revised list shows price reductions ranging from around Tk3,000 to Tk5,000 for several widely used stents. For example, some stents previously priced at Tk60,000 will now cost Tk57,000, while stents priced at Tk55,000 and Tk53,500 have been reduced to Tk52,000 and Tk50,000 respectively.

The largest price cut was applied to the Silene Covered Stent manufactured by InSitu Technologies Inc of the United States. Its maximum retail price has been reduced from Tk109,800 to Tk62,000.

The updated price list covers stents imported by companies including Advanced Meditech, Asia Pacific Medics Ltd, Alliance Medicare and others, with products manufactured in countries such as Poland, Germany, France, Italy, Switzerland, Japan and the United States.

The DGDA has directed all hospitals to display the updated stent price list prominently on their notice boards for public awareness. Hospitals and healthcare providers have also been instructed to ensure that stents are sold strictly according to the approved maximum retail price (MRP) and are not bundled into treatment packages.

The notification further states that separate cash memos must be issued for stent purchases, clearly mentioning the stent's name, MRP and manufacturer's name. Hospitals must also provide patients with the packaging of the stent used during their treatment.

The DGDA urged all hospitals providing cardiac care to comply with the approved pricing structure and related directives.

More than 30 per cent of food produced in South Asia is lost or wasted every year, enough to feed nearly 300 million people, according to a World Bank report.

Prevention of food loss or waste is one of the key measures that holds the key to the future of South Asia's food economy beyond production alone, it says, adding that by transforming food systems from farm to market, the region can generate millions of jobs, reduce food loss, improve nutrition, attract investment and strengthen exports.

The report says South Asia's agriculture sector, valued at more than USD 700 billion annually, has the potential to unlock millions of jobs and billions in investments through food systems transformation, according to the World Bank.

With millions of young people entering the workforce every year, creating sustainable jobs has become one of the region's most pressing priorities. The World Bank says transforming food systems beyond the farm can unlock significant opportunities for employment, investment, economic growth and poverty reduction.

The report by the World Bank-led South Asian Policy Leadership for Improved Nutrition and Growth (SAPLING) was presented at a high-level regional policy dialogue in Ahmedabad today.

The region's agriculture sector employs nearly 43 per cent of the workforce. However, despite its scale, agriculture contributes only around 16 per cent of the region's GDP, the report says.

Experts emphasised that the next phase of agricultural transformation lies not merely in increasing production but in expanding food processing, storage, logistics, marketing and value addition. These activities can create millions of productive jobs while reducing food losses and increasing farmers' incomes, the report says.

According to the World Bank report, South Asia possesses strong fundamentals to emerge as a global leader in food systems. Rapid urbanisation, a growing middle class, rich agro-biodiversity and rising demand for safe and high-quality processed food are creating new opportunities for investment and innovation.

To accelerate this transformation, the World Bank Group is advancing a combined approach through AgriConnect and SAPLING.

AgriConnect, a global platform, aims to connect 300 million farmers to markets by 2030 through investments in infrastructure, policy reforms and private capital mobilisation. The initiative is already supporting projects and reforms across countries including India, Bangladesh and Sri Lanka.

SAPLING serves as a regional platform that brings together governments, investors, development partners and innovators to promote policy reforms, develop investment pipelines and scale successful solutions across the region.

Participants at the SAPLING High-Level Policy Dialogue highlighted the importance of coordinated action by governments, businesses, investors and development institutions in the region.

Investors were encouraged to support cold chains, warehousing, logistics hubs, processing clusters, agro-industrial parks and emerging agri-enterprises. Companies were urged to build integrated value chains, adopt digital technologies for traceability and quality assurance, and invest in workforce skills and capacity building.

The report suggests policymakers promote food processing zones, improve logistics infrastructure, simplify food safety and certification systems, strengthen public-private partnerships and create a more investment-friendly business environment.

It says international financial institutions can play a catalytic role by expanding blended finance mechanisms, supporting policy reforms linked to investment opportunities and reducing risks associated with private sector investments in food systems.

The two-day South Asian dialogue brings together around 200 participants, including policymakers, industry leaders, development partners, innovators, researchers, start-ups and representatives from South Asian countries, to deliberate on strengthening food processing ecosystems and building resilient, inclusive and sustainable food systems in the region.

The Bangladesh Bank's Board of Directors has decided to appoint administrators at five non-bank financial institutions (NBFIs) as a step towards closing or winding them down following years of widespread irregularities and scandals during the tenure of the previous government.

The decision was made at a board meeting held at the Bangladesh Bank head office yesterday (9 June), chaired by Governor Mostakur Rahman.

According to meeting sources, discussions covered nine financially distressed institutions. For the five earmarked for closure or liquidation, boards will be dissolved and administrators appointed, similar to the process followed for merged banks. The remaining four have been given three months to recover.

The five institutions marked for closure are FAS Finance, Far East Finance, Aviva Finance, Peoples Leasing and Financial Services, and International Leasing and Financial Services, according to Bangladesh Bank sources.

The four NBFIs given three months to recover are Bangladesh Industrial Finance Company (BIFC), Premier Leasing and Finance, GSP Finance, and Prime Finance.

A Bangladesh Bank official said the five institutions earmarked for closure hold deposits of approximately Tk2,700 crore from 27,000 individual depositors.

"Our first task is to dissolve the boards of these institutions. After that, administrators will be appointed in a similar process followed for the merged banks. Once administrators are in place, the process of returning depositors' funds will begin. Each individual depositor will receive up to Tk10 lakh."

He said only individual depositors at the five institutions will receive up to Tk10 lakh each, while corporate depositors will receive nothing for now but they will get back their funds only when non-performing loans of the institutions are recovered.

"Institutions are given a three-month timeframe to demonstrate the ability to repay individual depositors' principal within that period, or face the same resolution or liquidation process," he further added.

As of last December, non-performing loan rates stood at 99.99% for FAS Finance, 98.50% for Far East Finance, 93.93% for Aviva Finance, around 95% for Peoples Leasing, and 99.44% for International Leasing, according to a Bangladesh Bank report.

In May last year, Bangladesh Bank issued notices to 20 NBFIs asking why they should not be shut down due to high non-performing loans and failure to return deposits. Of these, nine institutions submitted recovery plans deemed unsatisfactory, prompting moves to close or wind them down. However, in January this year, three institutions were removed from the list, narrowing it to six. At that stage, GSP Finance, Prime Finance, and BIFC were excluded. More recently, the Bangladesh Bank board made a preliminary decision to close or wind up five institutions, dropping Premier Leasing from the list.

Sector insiders say the surge in non-performing loans at these institutions was largely driven by widespread irregularities and scandals during the tenure of the ousted Awami League government. As a case in point, PK Halder, former managing director of NRB Global Bank (later renamed Global Islami Bank), is accused of embezzling at least Tk3,500 crore from four NBFIs: Peoples Leasing, International Leasing, FAS Finance, and BIFC.

The broader NBFI sector has been grappling with severe liquidity shortages, high default loans, and weak governance for several years, prompting Bangladesh Bank to act under its resolution framework.

Finance Minister Amir Khosru Mahmud Chowdhury says the government is preparing the budget for the next fiscal year with interests of people from all sections of society in mind.
"We are preparing the budget taking all relevant issues into consideration," he told reporters when asked about the persistently high rate of inflation that has been putting pressure on people for a prolonged period.The minister was responding to questions at his office at the Bangladesh Secretariat in the capital, preceding an elaborate statement in parliament on economic and revenue situation, and banking-sector reforms later in the day.Mr Chowdhury, who is scheduled to place a Tk 9.38-trillion budget in parliament tomorrow (Thursday), says that despite limited resources, the budget seeks to cover all citizens of the country."No one has been left out. The circumstances of all people, their advantages and disadvantages, and their living standards have been taken into account," he told the reporters.

Responding to another question, he added: "Had we had more resources, we could have undertaken even more welfare- oriented measures for the people."

While addressing parliament on Tuesday, the finance minister said political uncertainty, weak investment, sluggish trade and industrial activity, and supply-chain disruptions were among major factors behind government's failure to meet revenue targets over the past two fiscal years.Politics

He apprised the parliament of the deficient revenue situation and also banking-sector woes and remedies being applied now.

He notes that a gamut of 11 economic deceleration factors, including declining purchasing power, business losses, lower industrial output and falling corporate profits, had weighed on revenue collection in fiscal years 2024-25 and 2025-26.

Replying to a question from reserved-seat lawmaker Nilofar Chowdhury Moni during a question-answer session in the Jatiya Sangsad, the minister said revenue collection up to April in FY2025-26 had come to Tk 3.27 trillion (326,928.16 crore) against a target of over Tk 4.31 trillion (Tk 431,461.27 crore), which accounts for 75.77 per cent of the target.

The National Board of Revenue (NBR) was assigned a revenue target of Tk 5.03 trillion (Tk 503,000 crore) for the fiscal year.

In FY2024-25, revenue collection stood at over Tk 3.71 trillion (Tk 370,875.04 crore) against a target of Tk 4.63 trillion (Tk 463,500 crore).

Mr Chowdhury, who is also in-charge of the planning ministry, says economic activity remained subdued following the political transitions, while supply-chain bottlenecks, high production costs and weak business confidence further constrained revenue growth.

He says prolonged high inflation, which hovered near double digits for an extended period, eroded consumers' purchasing power and reduced the taxable surplus income of middle-income earners and salaried employees.

Disruptions in industrial production, weakened supply chains and sluggish wholesale and retail trade also reduced business earnings, hurting corporate-tax collection.

The minister says shortages of gas and electricity prevented many industries, including the ready-made garment sector, from operating at full capacity, leading to lower production and profitability.

Higher lending rates and the depreciation of the taka against the US dollar further increased operating costs, squeezing profits of large corporate taxpayers, one of the government's major sources of income-tax revenue.

On the trade front, imports of goods subject to 25-percent and 10-percent customs duties fell by 18 per cent and 37 per cent respectively in FY2025-26 compared with the previous year, reducing customs revenue.

Mr Chowdhury also says government measures aimed at keeping fuel prices stable -- including cuts in duties and taxes on petroleum products and the withdrawal of VAT on imported liquefied natural gas (LNG) -- had affected revenue collection.

Tax incentives for capital-machinery imports and a decline in luxury-vehicle imports also contributed to the shortfall.

The finance minister further states that the economic disruption caused by the July-August 2024 student-led mass uprising and the subsequent change in government led to prolonged stagnation in economic activities, disrupted supply chains and weakened business operations, resulting in lower corporate earnings and tax payments.

However, he says, ongoing automation of tax administration and stronger anti-evasion measures by the NBR were helping improve revenue collection and narrow the gap in recent months.

Meanwhile, the finance minister said, the government has intensified banking-sector reforms, strengthened deposit protection and tightened measures against loan defaulters in an effort to restore public confidence and improve financial stability.

Responding to a question from Cox's Bazar-3 lawmaker Lutfur Rahman in the Jatiya Sangsad, the minister says the reforms are being implemented under a comprehensive bank-resolution framework established through the Bank Resolution Act 2026.

He says the framework was first introduced through the Bank Resolution Ordinance 2025 and operationalised under the Bank Resolution Scheme 2025 before being enacted into law this year.

As part of the resolution process, five troubled Islamic banks have been merged to form Sommilito Islami Bank PLC, "a key step aimed at strengthening the banking system and addressing longstanding weaknesses in the sector".

The minister says depositor protection has also been expanded under the Deposit Protection Act 2026, with the maximum protected deposit amount doubled to Tk 200,000 from Tk 100,000.

In a significant policy shift, depositors of non-bank financial institutions (NBFIs), who were previously outside the safety net, have also been brought under the protection framework.

"A clear legal framework, transparent resolution mechanisms and stronger depositor safeguards will play an effective role in rebuilding confidence among depositors and stakeholders," Mr Chowdhury told the House.

The finance minister says the government and Bangladesh Bank have simultaneously stepped up efforts to recover defaulted loans and curb the accumulation of non-performing loans (NPLs).

The measures include policy support for recovering overdue loans, special resolution strategies for banks burdened with high levels of classified loans and stricter action against willful defaulters.

Banks have been instructed to strengthen their legal divisions and recover at least one per cent of outstanding default loans in cash through alternative dispute- resolution mechanisms by June 30, he says.

Bangladesh Bank has also updated credit-risk management guidelines, while the recovery progress from top 20 defaulters is being reviewed regularly at bankers' meetings.

Banks with classified loans exceeding 10 per cent of their portfolios have been directed to form dedicated recovery-monitoring teams.

To strengthen credit discipline, the central bank is implementing Expected Credit Loss (ECL)-based loan classification and provisioning under IFRS 9, a move aimed at improving governance and reducing lending risks.

The minister says licensed collateral valuation firms have also been authorised to independently assess pledged assets alongside banks' own valuations.

Mr Chowdhury says the government's broader reform agenda includes updating agricultural loan-rescheduling policies, publishing lists of defaulters and willful defaulters, revising incentives for regular borrowers and setting sector-wide borrowing limits for individual clients.

"Legal reforms are also being pursued to impose tougher penalties on habitual defaulters."

The government is considering including experienced bankers on the jury board of the Artha Rin Adalat and introducing measures to prevent defaulters from delaying recovery proceedings through writ petitions.

The minister says large companies seeking financing above Tk 10 billion would be encouraged to raise funds through bond issuance instead of relying heavily on bank borrowing, helping ease pressure on the banking system.

He also discloses that legislation is being prepared to facilitate the establishment of private-sector asset-management companies (AMCs) to help resolve distressed assets and strengthen long-term financial-sector stability.

Commercial solar power generation is likely to receive a zero percent income tax benefit in the upcoming budget, while the government is considering a five percent rebate on electricity bills for retail consumers who use solar power.

Besides, the proposed budget for the 2026-27 fiscal year may exempt imports of raw materials used to manufacture lithium-ion batteries, sodium-ion batteries and lithium-ion battery packs from duties and taxes until 2030.

These batteries are widely used in solar power systems. Imports currently face a total tax incidence of about 60 percent.

Finance ministry officials familiar with the matter said a significant share of customs tax incentives in FY27 could be directed towards the solar sector as the government seeks to reduce dependence on conventional energy sources amid volatility in global fuel markets.

As part of its broader green energy agenda, the BNP government is also considering lowering advance income tax on electric vehicles (EVs) during registration and renewal.

The current levy of Tk 2 lakh would be reduced to Tk 25,000, Tk 50,000, Tk 75,000 and Tk 1 lakh, depending on vehicle capacity.

The proposed rates would apply to EVs with capacities of up to 200kW, 300kW, 400kW and above 400kW, respectively.

The government is also considering extending concessional import benefits to local EV parts makers, alongside manufacturers and assemblers.

“Duties on charging stations for e-bikes and EVs may also be reduced in the budget,” said one of the officials.

Finance Minister Amir Khosru Mahmud Chowdhury is expected to announce the measures when he presents the national budget in parliament on June 11.

Officials said the proposals have already received in-principle approval from Prime Minister Tarique Rahman at a high-level meeting last month.

Feroz Kabir, senior general manager of Runner Motors, which sells imported electric scooters, welcomed the proposals, saying they were in line with the global shift towards cleaner transport.

However, he said charging infrastructure remains a major concern.

“Government action will largely shape how EV demand grows,” said Kabir, adding that while most users still rely on home charging, a structured charging network will be crucial for wider adoption.

He said consumer acceptance is rising as vehicle range, comfort and practicality have improved. Although EVs cost more upfront, buyers focus on savings in day-to-day use.

Zakir Hossain Khan, chief executive officer of the Change Initiative, said the government’s green transition efforts should be accompanied by a broader overhaul of renewable energy and EV policies.

He argued that the current tax regime creates distortions and inefficiencies, noting that even low tariffs can lead to complex customs assessments and the risk of misclassification.

“We should move towards zero duty. This already exists in the garment sector.”

Khan also criticised the wide disparity between the taxation of fossil fuels and clean energy.

“For fossil fuel, when the government is giving zero or 1 percent duty, but here they are charging up to 65 percent. That is tax injustice,” he said.

He argued that energy taxation should be based on consumption rather than supply chains.

Last week, the Centre for Policy Dialogue (CPD) proposed a package of fiscal reforms to accelerate Bangladesh’s green energy transition.

The think tank called for the removal of advance tax on solar and wind equipment, lower customs duties on lithium-ion batteries, the elimination of supplementary duty on energy storage systems and reduced taxes on electric vehicles.

CPD recommended scrapping the existing 7.5 percent advance tax on solar and wind equipment, which raises total tax incidence to between 28 and 31 percent and increases project costs.

It also proposed reducing customs duty on lithium-ion batteries from 25 percent to 5 percent and eliminating the 20 percent supplementary duty on energy storage systems. According to the think tank, these measures would significantly lower tax burdens and support renewable energy integration.

On electric vehicles, CPD called for the removal of the 20 percent supplementary duty and the three percent regulatory duty, while reducing customs duty from 25 percent to 10 percent.

CPD said EVs currently face the highest tax burden among all energy-transition technologies.

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.

Japan will provide Bangladesh a concessional loan of around $312 million to help bolster energy security and economic resilience as the conflict in the Middle East places growing strain on the country’s finances.

To that end, officials from both sides signed the “Emergency Support Loan for Enhancing Economic Resilience and Stable Energy Supply” agreement in Dhaka yesterday, according to a press statement.

Md Shahriar Kader Siddiky, secretary of the Economic Relations Division (ERD), and Takahashi Junko, chief representative of the Japan International Cooperation Agency (Jica) Bangladesh Office, signed the documents on behalf of their respective sides at the ERD in Sher-e-Bangla Nagar.

The loan -- equivalent to 50 billion yen and to be co-financed by the Asian Development Bank (ADB) -- is intended to help Bangladesh address socio-economic pressures stemming from higher energy prices and supply uncertainties linked to the Middle East conflict involving the US, Israel and Iran.

The signing comes as Bangladesh faces mounting fiscal pressure from the conflict. Finance Minister Amir Khosru Mahmud Chowdhury told parliament yesterday that preliminary estimates suggest the country will require an additional Tk 42,600 crore in subsidies for the oil, gas, electricity and fertiliser sectors by June of FY2025-26.

Preliminary estimates suggest the country will require an additional Tk 42,600 crore in subsidies for oil, gas, electricity and fertiliser sectors by June, finance minister said in parliament yesterday
He said the conflict has already affected fuel and fertiliser prices, import and transport costs, inflation, foreign exchange management, remittances and overseas employment. The Middle East also remains a key destination for Bangladeshi migrant workers, the minister noted, warning that prolonged instability could threaten remittance inflows and job opportunities abroad.

The Japanese loan is part of a broader push for external budget support.

The Daily Star reported on May 3 that Bangladesh expects around $3 billion from five multilateral and bilateral lenders by mid-June, including $500 million from Jica. The effort followed a government assessment estimating that an additional $4 billion in emergency budget support would be needed between May and June to offset higher fuel and fertiliser import costs resulting from the conflict.

The loan also marks the first Japanese official development assistance (ODA) project under POWERR Asia, a regional initiative launched by Japanese Prime Minister Takaichi Sanae in April. The initiative aims to strengthen energy and resource resilience across the region through emergency support and longer-term cooperation in energy procurement, supply-chain stability, diversification and industrial resilience.

According to the Japanese Embassy, the financing will also support the government’s efforts to strengthen fiscal management, improve the investment climate and maintain a stable energy supply -- areas considered critical to sustaining economic stability and long-term growth.

Speaking at yesterday’s signing ceremony, Japanese Ambassador Saida Shinichi, who exchanged notes for the loan with Siddiky, described the agreement as a reflection of Japan’s enduring commitment to Bangladesh at a critical juncture.

He called Bangladesh an important strategic partner and reaffirmed Japan’s support for the country’s stability, prosperity and sustainable development.

Bangladesh is considering the possibility of joining alternative international payment systems beyond dollar-dominated networks as discussions take place on China's Cross-Border Interbank Payment System (CIPS) alongside potential Panda Bond financing.

A delegation from China's state-owned Export-Import Bank held discussions with Bangladesh Bank officials today (9 June) regarding CIPS integration and Panda Bond issuance. Central bank officials said there is no policy objection if any commercial bank shows interest in joining the CIPS platform independently.

The CIPS is a China-backed cross-border payment and settlement system launched in 2015 to facilitate renminbi (RMB) transactions and expand the global use of the Chinese currency.

Bangladesh Bank officials described it as an additional international payment channel alongside existing systems such as SWIFT, saying it could broaden options for trade and business payments.

A senior Bangladesh Bank official said, "The more channels available for international payments, the more opportunities it creates for trade and business."

He added that banks interested in joining would need to express their intent and proceed independently, with no immediate regulatory barriers or separate approval requirements at this stage. "Once a bank begins the actual process, the necessary issues will become clearer. But for now, our stance is positive," he said.

Central bank officials said China had earlier proposed linking Bangladesh to its payment network, and the idea gained traction after Western sanctions on Russian banks highlighted the need for alternative global financial infrastructure.

In March 2024, China's Ambassador to Bangladesh, Yao Wen, met the then Bangladesh Bank governor to discuss CIPS, with officials suggesting it could serve as a parallel global payment channel alongside SWIFT.

However, officials stressed that the effectiveness of CIPS would depend heavily on the internationalisation of the renminbi. One official said, "If the use of RMB in international trade increases, the usage of this platform will also expand."

They added that Bangladesh's trade with China remains heavily import-oriented, limiting immediate benefits unless Chinese investment, loans, and project financing increase substantially to generate RMB-based financial flows.

Panda bond financing

Panda Bonds also featured in the discussions as a potential tool for diversifying financing sources. These are yuan-denominated debt instruments issued in China's domestic bond market by foreign governments, international financial institutions, or multinational corporations, allowing them to raise funds directly from Chinese investors in RMB.

While participation is primarily led by Chinese institutional investors, foreign investors may also take part in certain cases. Sovereign-level decisions on issuance would be led by the Ministry of Finance, according to the central bank officials.

Bida meeting with Chinese delegation tomorrow

A separate meeting between the Bangladesh Investment Development Authority (Bida) and a delegation from China Exim Bank is scheduled for tomorrow (10 June), where investment-related issues are expected to be discussed, according to officials.

Bida Executive Member and Head of Business Development Nahian Rahman Rochi said the meeting would focus on broader investment cooperation with the Chinese delegation.

Experts said CIPS could emerge as a long-term strategic option for Bangladesh but cautioned that its benefits would depend on deeper economic integration.

Chairman of Research and Policy Integration for Development (RAPID) Mohammad Abdur Razzaque said, "If Chinese investment, loans, and project financing increase, cross-border settlements will become easier using those financial flows. Otherwise, Bangladesh may again have to rely on the US dollar for transactions."

He added, "This could open up a window of opportunity. However, the extent of real benefits will depend on how deeply Bangladesh-China economic relations and transaction flows develop in the future."

The amount of money Bangladesh collects in government revenue each year relative to the size of its economy is among the lowest in the world, ranking just above war-torn Yemen and Sudan, according to data from the International Monetary Fund (IMF).

The shortfall leaves the government with less money to invest in health, education, infrastructure and other public services, while limiting its ability to respond to economic shocks.

This measure, known as the revenue-to-GDP ratio, stood at 8.34 percent in 2024, the lowest among Asian countries and many of Bangladesh’s peer economies.

There are at least half a dozen reasons why the government’s revenue compared with the size of the economy has remained low for such a long time.

According to the London-based International Growth Centre (IGC), Bangladeshis have weak trust in government spending because of high levels of corruption, which reduces willingness to pay taxes. Tax compliance also depends on the quality of public services people receive.

Meanwhile, economists say the low revenue-to-GDP ratio is also the result of a narrow tax base, the dominance of the hard-to-tax informal sector, generous tax exemptions and holidays, weak compliance and enforcement, and heavy reliance on indirect taxes instead of broad-based income and property taxes.

“Due to the country’s low revenue-to-GDP ratio, the government’s fiscal space remained limited over the years. It had negative consequences for development,” said Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID).

As an example, the economist pointed to long-standing underinvestment in the health and education sectors.

He said Bangladesh’s spending on health and education is among the lowest in the world. As a result, the country has not achieved the expected growth in human capital. Other infrastructure projects that should have been developed also failed to materialise.

The RAPID chairman said the low revenue-to-GDP ratio supported economic growth up to a certain point because it benefited the private sector.

“With lower tax collection, people paid less tax and retained greater purchasing power, helping private sector growth,” he added.

HOW BANGLADESH COMPARES WITH ITS PEERS

In neighbouring India, the revenue-to-GDP ratio stands at 20.48 percent. It is at 12.67 percent in Pakistan and 13.68 percent in Sri Lanka. In Bhutan, government revenue amounts to 26.97 percent of GDP.

Among countries graduating from the least developed country (LDC) club, data for Lao PDR and Nepal were unavailable. Even so, Bangladesh ranked lowest within the group.

The IMF data showed that the Solomon Islands recorded a revenue-to-GDP ratio of 32.7 percent, while the figure stood at 14.58 percent in Cambodia and 20.13 percent in Senegal.

Internationally, a tax-to-GDP ratio of 15 percent is often regarded as a minimum benchmark. Falling below that level can hamper economic growth and development.

Below this threshold, government effectiveness, financial development and economic growth tend to stagnate. Yet more than 70 developing economies still collect less than 15 percent of GDP in taxes, constraining development and leaving governments vulnerable to economic shocks.

War-torn Sudan and Yemen recorded tax-to-GDP ratios of 2.93 percent and 6.44 percent, respectively. The figure was 7.55 percent in Ethiopia, which has faced prolonged political instability.

While these countries collect less than 10 percent of GDP in revenue, several countries, such as Austria, Belgium, Denmark, Dominica, Finland, France, Kiribati, Kuwait, Lesotho, Norway and Ukraine, collect more than 50 percent, according to IMF data.

HIGH TAX RATES, WEAK RETURNS

Razzaque said that despite weak tax collection, Bangladesh’s corporate tax rate is among the highest in the world. However, corporate tax is only one component of total government revenue.

He added that not only is revenue collection low, but part of the revenue that is collected is also wasted through inefficient spending, reducing the quality of public goods and services.

In a report, the International Growth Centre said corruption has significant negative effects on revenue collection. “Corruption, especially extreme levels of corruption, can significantly erode people’s trust in the system leading to tax evasion,” it said.

“The push to raise taxes in Bangladesh is contemporaneous with these excesses in government spending. Unsurprisingly, people are reluctant to forgo their earnings only to see them squandered, pushing taxpayers to seek out ways to evade taxes,” it added.

Jean Pesme, the World Bank’s division director for Bangladesh and Bhutan, wrote in a blog that although Bangladesh collects relatively little tax, some of its tax rates are higher than those of peer countries.

He said the real problem lies in a complex and distortionary tax system marked by multiple tax rates and large, regressive exemptions on value-added tax (VAT) and income taxes.

Pesme said, “Worryingly, tax exemptions are estimated to be nearly as large as the actual tax collection. Such distortions result in significant leakage of revenues, opportunities for corruption, and a relatively low share of individuals and businesses paying taxes.”

“Also, Bangladesh’s heavy reliance on trade-related taxes discourages trade, a key driver of economic growth, through high tariffs and supplementary duties that create an anti-exports bias.”

Bangladesh urgently needs bold and comprehensive tax reforms, combining policy changes with institutional restructuring and capacity building, he said.

An immediate priority is to rationalise tax exemptions and incentives and reform the VAT system. Expanding digital automation is also central to transforming tax administration, Pesme added.

BROADENING TAX NET THE KEY

Razzaque said the level of tax rates was not the main issue. Instead, expanding the tax net should be the priority.

He said many growth centres, such as rural bazaars and peri-urban industrial hubs, remain outside the tax system. These should be brought under tax coverage.

“As the tax net has not expanded, a large portion of our economy has still not been formalised,” said the economist.

According to Razzaque, Bangladesh also has significant gaps in income taxation. For example, land values are often underreported, reducing tax payments and depriving the government of revenue.

He said wealth has accumulated rapidly in Bangladesh. Citing a RAPID research, he noted that more than 50 percent of the country’s wealth is concentrated in the hands of just 1 percent of the population.

This has widened inequality, he said. “Policymakers should consider taxing wealth transfers between generations rather than focusing solely on a wealth tax.”

Tax collection must be digitalised to minimise evasion, he said. Greater emphasis should also be placed on direct taxes rather than indirect taxation.

Bangladesh has set itself an ambitious objective: developing a creative economy that can generate jobs, exports and investment through media, entertainment and digital content.

Policymakers increasingly recognise that film, television, streaming platforms and digital creators can become important drivers of economic growth, employment and global reach of Bangladeshi content.

For this ambition to succeed, Bangladesh must also address a growing challenge that threatens the long-term sustainability of the media and entertainment ecosystem.

A creative economy can only thrive when creative assets have value.

When intellectual property is routinely copied, redistributed and consumed without authorisation, the incentives that drive investment, innovation and content creation begin to erode.

Piracy is therefore no longer merely a copyright issue -- it is a direct challenge to Bangladesh's creative economy ambitions.

In Bangladesh today, illegal access to broadcast and entertainment content is no longer confined to obscure websites. It is becoming increasingly normalised.

What is often described as “piracy” reflects a broader shift in content distribution.

Content is increasingly accessed through a mix of illicit streaming services, social media streams and unlicensed platforms that carry broadcast signals over IP-based networks outside established licensing frameworks.

It is the emergence of an unregulated digital distribution layer operating alongside, and increasingly replacing the formal system.

As internet penetration rises and streaming becomes mainstream, piracy is expanding rapidly.

Bangladesh, with its growing appetite for sports, entertainment and digital content, is entering a critical phase where piracy risks becoming deeply entrenched across the content ecosystem.

While the immediate impact falls on broadcasters, rights holders and content distributors, the broader implications extend across the creative economy.

For a country seeking to expand the global reach of its content and attract investment into media and entertainment, ensuring that those who create, distribute and invest in content can capture its value becomes increasingly important.

Every successful creative economy is ultimately built on intellectual property.

Whether through long-form, short-form or creator-led content, the underlying asset is content that can be licensed, monetised and exported.

That value chain also depends on broadcasters, Pay TV operators, streaming platforms and licensed distribution networks that invest in acquiring, distributing and monetising local and international content.

Piracy directly undermines this model.

When it becomes widespread, legitimate revenues decline, weakening incentives to invest in new content and reducing the broader economic contribution of the formal media ecosystem.

Investors become more cautious, content budgets shrink, and creators struggle to capture the value of their work.

The consequence is not merely lost revenue today but less content, less innovation and fewer opportunities tomorrow.

Over time, this can also limit job creation across the broader media and entertainment value chain, from production and distribution to creative and technical professions.

Ambitions to increase the global reach of Bangladeshi films, television programmes and digital content will be strengthened by a regulatory environment that gives creators, investors and distributors confidence that intellectual property rights are effectively protected. Bangladesh already has a legal framework.

The Copyright Act 2023 prohibits unauthorised distribution and retransmission of broadcast content, including digital distribution over IP networks.

The law provides both civil and criminal remedies against infringement. Yet piracy continues to thrive because the challenge is not legal absence but enforcement.

As broadcast and internet-based distribution increasingly converge, regulatory responsibilities are spread across multiple authorities, including the Ministry of Information and Broadcasting (MoIB), the Bangladesh Telecommunication Regulatory Commission (BTRC) and relevant authorities responsible for digital governance and cybersecurity.

Addressing piracy in its current form therefore requires coordinated enforcement rather than isolated action.

Piracy itself is evolving as content distribution becomes increasingly digital and interconnected.

It increasingly occurs through digital and IP-based platforms operating outside established licensing and regulatory frameworks, creating new challenges for enforcement. The implications extend beyond lost revenue.

These networks often operate outside regulatory visibility, relying on foreign-hosted infrastructure and opaque payment channels, while exposing consumers to cybersecurity risks and weak protections.

Piracy is therefore not only a content issue but also a broader question of digital governance and ecosystem integrity.

Digitalisation is often presented as an important solution to piracy, but not all digital systems are equal.

To be effective, digitalisation must be supported by technologies and systems that enable traceability, content protection, compliance and accurate subscriber reporting.

Without these safeguards, digital platforms can simply make unauthorised redistribution more efficient. Effective digitalisation should strengthen visibility, accountability and enforcement.

The challenge facing Bangladesh is therefore not one of legislation but of execution.

Two priorities stand out. First, more effective enforcement of existing laws, supported by stronger coordination between broadcasting, telecommunications and digital governance authorities to address increasingly complex digital distribution models.

Second, a structured approach to digitalisation that prioritises transparency, traceability and system-wide accountability.

As Bangladesh seeks to strengthen its position in media and entertainment, the protection and commercialisation of creative assets will become increasingly important to attracting investment, supporting innovation and fostering sustainable growth.

In this context, piracy should be viewed through a broader lens of economic competitiveness and digital governance.

Bangladesh's creative economy will increasingly depend on its ability to create, monetise and export intellectual property.

As media, entertainment and digital content become more important drivers of growth, ensuring that creators and investors can realise the value of their work will be essential.

Ultimately, the success of the creative economy will depend not only on producing more content, but also on creating the conditions that allow that content to generate lasting economic value.

While an established legal framework exists, the opportunity now lies in strengthening enforcement, improving coordination across institutions and building a digital ecosystem that supports innovation, investment and accountability.

Doing so can help create the conditions for a more vibrant media and entertainment sector and support the continued growth of Bangladesh's creative economy.

The country’s steel manufacturers yesterday urged the government to reverse the recent electricity tariff hike, warning that it will increase production costs, push up steel prices and slow economic activity.

The government raised electricity tariffs for industrial consumers by about 17 percent, effective from June. Industry leaders said the move comes at a time when steelmakers are already struggling with weak demand, high borrowing costs, a weaker taka, gas shortages and difficulties in opening letters of credit.

“The new tariff alone will increase steel production costs by around Tk 1,785 per tonne,” said Mohammad Jahangir Alam, president of the Bangladesh Steel Manufacturers Association (BSMA), at a press conference at the Jatiya Press Club in Dhaka.

He added that when VAT, port charges, fuel, transport costs and higher raw material prices are included, the total additional cost could reach Tk 3,560 per tonne, while overall production costs have already increased by nearly Tk 5,000 per tonne.

Industry leaders also called for a review of capacity payments, power contracts and reserve margins, saying lower electricity costs, better energy efficiency and diversified energy sources are essential for sector growth and competitiveness
Alam warned that the price of 60-grade MS (mild steel) rod, the most widely used steel product in construction, is currently Tk 91,000 to Tk 92,000 per tonne at the retail level and could rise to at least Tk 97,000 per tonne.

“The burden will fall directly on the construction and infrastructure sectors. Higher project costs could slow both public and private investment and ultimately weigh on overall economic growth,” he said.

The BSMA said the sector has attracted over Tk 1 lakh crore in investment and employs around 10 lakh people.

It added that Bangladesh has about 40 modern steel mills and over 150 re-rolling mills, with a combined annual production capacity of around 1.22 crore tonnes, while domestic demand is only about 50 lakh tonnes a year, meaning mills are operating at less than half of their installed capacity.

Alam also said steelmakers have made significant investments in their own power infrastructure, including 230kV, 132kV and 33kV substations, allowing them to receive electricity directly and avoid adding to distribution losses.

Referring to a recent public hearing by the Bangladesh Energy Regulatory Commission, he said the Bangladesh Power Development Board admitted that high-voltage consumers like steel mills face almost no system losses and are profitable customers.

Despite this, electricity tariffs have increased by around 60 percent to 70 percent over the past five years.

Alam urged the government to withdraw the latest tariff hike and gradually reduce annual capacity payments of Tk 40,000 to Tk 50,000 crore, warning that further cost increases could threaten the sustainability of the steel industry.

BSMA Secretary General Sumon Chowdhury also called for a review of recent electricity price hikes and a reduction in capacity payment burdens, saying these measures are weakening the competitiveness of local industries.

“Reducing electricity costs is essential for sustaining industrial growth,” he said.

According to Chowdhury, capacity payments to power producers rose from Tk 32,000 crore in the fiscal year (FY) 2023-24 to nearly Tk 42,000 crore in FY2024-25.

He suggested reviewing these costs and renegotiating power contracts to reduce pressure on both industries and consumers.

Chowdhury also proposed revising or cancelling costly power sector agreements, phasing out expired rental and quick-rental power plants, and reducing the country’s reserve generation margin to below 25 percent.

He further called for greater energy diversification, including higher investment in renewable energy and reduced dependence on imported fuels and LNG.

He also urged greater transparency in public spending and stronger engagement between policymakers and business leaders to support industrial growth and protect the economy.

BSMA Vice President Maruf Mohsin said ferroalloy is a key raw material used in steel production and has been manufactured locally for the past 17 years, helping the country save millions of dollars in foreign exchange by reducing import dependence.

He said the production process is highly electricity-intensive, and any further rise in power costs would significantly reduce profitability, putting ferroalloy producers under severe financial pressure and potentially forcing some plants to shut down.

Former BSMA president Manwar Hossain, former vice president Sk Masadul Alam Masud, and BSRM adviser Kazi Anwar Ahmed were also present at the conference.