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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Products facing higher import duties

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

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

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

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

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

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

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

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

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

Duty relief for industrial raw materials

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

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

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

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

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

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

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

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

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

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

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

Tax burden on solar equipment

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

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

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

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

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

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

Industry welcomes proposed reforms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tax burden on EVs to fall

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

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

Major relief for plug-in hybrids

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

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

Charging equipment to get zero-duty facility

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

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

Higher taxes on petrol and diesel vehicles

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

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

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

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

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

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

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

Industry scepticism

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

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

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

Experts oppose indemnity for undeclared funds

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dialysis costs may decline

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

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

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

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

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

VAT on cardiac stents and intraocular lenses may be withdrawn

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

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

Duty concessions proposed on raw material imports for medical equipment industry

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

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

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

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

Proposal to cut duty on mortuary imports to 1%

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

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

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

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

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

Proposal to fully exempt duties, taxes on 21 assistive devices

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

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

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

Proposal to reduce duty on sewage treatment plants to 1%

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The 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.

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

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

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

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

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

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

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

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

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

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

Protection for gypsum board, resin, transformers

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

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

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

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

Higher duties on appliances, bicycle parts

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

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

Protective measures for paper, copper, steel industries

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

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

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

Lower duties on industrial raw materials

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

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

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

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

Higher duties for maize starch, motors and polyester

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

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

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

Benefits for tyre, beauty product manufacturers

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

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

New concession notification

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

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

Duty benefits for ETP chemicals, coal imports may continue

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

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

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

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