The tax exemption for individual investors on income from zero-coupon bonds has been scrapped, after the government removed the benefit in the proposed budget for FY2026–27.

A zero-coupon bond is a debt instrument that does not pay periodic interest. Instead, it is issued at a deep discount to its face value, generating a return when the investor receives the full-face value at maturity.

With the removal of the tax benefit, individual investors who earn income from zero-coupon bonds must now include such earnings when calculating their taxable income and pay taxes accordingly, capital market analysts and investors say.

They said the tax exemption had gradually drawn individual investors toward zero-coupon bonds, and its withdrawal may discourage further investment in such instruments.

The government had earlier introduced the tax break to encourage individual participation in the zero-coupon bond market and support the broader development of the bond market. The rebate had been in place for nearly two decades.

The tax exemption on income from zero-coupon bonds was introduced for eligible investors through the Finance Act for FY2007–08, effective from 1 July 2007.

Under the sixth schedule of the Income Tax Act, subject to prescribed conditions, any income arising from a zero-coupon bond received by an individual, other than a bank, insurance company or financial institution, was excluded from the calculation of taxable income.

The conditions required that the zero-coupon bond be issued by a bank, insurance company or financial institution with the prior approval of Bangladesh Bank or the Bangladesh Securities and Exchange Commission (BSEC), or by any other institution with similar prior approval from either regulator.

For the purposes of this provision, the term "zero-coupon bond" also included zero-coupon Islamic investment certificates.

In the Finance Bill for FY2026–27, clause 25 of Part 1 of the sixth schedule, which provided the exemption, has been removed.

The issuance of various bond types including perpetual, subordinated, zero-coupon and coupon-bearing bonds has been on the rise following approvals from the capital market regulator, BSEC.

According to BSEC's annual report, 11 companies raised Tk6,675 crore through zero-coupon bond issuances in FY2023–24. However, only one company raised Tk171 crore through such instruments in FY2024–25.

In March this year, BSEC approved City Sugar Industries to raise Tk1,300 crore and Akij Food and Beverage to raise Tk500 crore through zero-coupon bond issuances.

Listed non-life insurer Global Insurance has declared a 10% cash dividend for the year ended 31 December 2025, maintaining the same payout as the previous year.

The dividend, equivalent to Tk1 per share with a face value of Tk10, was approved at a board meeting on Thursday following the adoption of the company's audited financial statements.

Despite the unchanged dividend, the insurer's earnings declined during the year. Earnings per share (EPS) fell 18.35% year-on-year to Tk1.29 in 2025 from Tk1.58 a year earlier.

However, cash generation improved significantly. Net operating cash flow per share rose to Tk1.64 from Tk0.26 in the previous year, while net asset value per share (NAVPS) increased slightly to Tk14.83 from Tk14.54.

Following the dividend announcement, the company's shares fell 2.06% to Tk38 on the Dhaka Stock Exchange (DSE), indicating a modest negative reaction from investors.

Global Insurance will hold its 26th annual general meeting (AGM) on 18 August through a digital platform to seek shareholder approval of the audited financial statements, dividend proposal and other agenda items. The record date has been fixed for 20 July 2026.

Listed on the stock exchanges in 2005 and classified under the 'A' category, Global Insurance conducts general insurance, guarantee and indemnity business, excluding life insurance.

As of May 2026, sponsor-directors held 35.32% of the company's shares, institutional investors owned 12.62%, and the general public held the remaining 52.06%.

The World Bank has revised Bangladesh's growth prospect into down trajectory as it forecast the Gross Domestic Product (GDP) growth at 4.6 per cent in the upcoming fiscal year (FY) 2026-27.
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It has also downgraded Bangladesh's GDP growth projection for the outgoing FY2026 by 0.8 percentage point to 3.8 per cent from its 4.6 per cent forecasted in January 2026 report, the Global Economic Prospect (GEP) report, unveiled by the World Bank on Friday.

Bangladesh's economic growth for the next fiscal is likely to be lowered by 1.50 percentage point to 4.6 per cent from that of 6.10 per cent, the global lender forecasted in its January GEP report.

The growth forecast by the global lender for the next fiscal has been cut to only 4.6 per cent when Bangladesh government has taken a target to achieve 6.5 per cent GDP growth in the next fiscal.

The global lender in its latest GEP report said the conflict in the Middle East is expected to slow global growth to the lowest rate since the onset of the COVID-19 pandemic amid higher energy prices, steeper inflation, and increased borrowing costs.

The global growth is forecast to slow to 2.5 per cent in 2026, down from 2.9 per cent in 2025, the WB GEP report added saying forecasts for two-thirds of economies have been downgraded relative to January this year.

Global growth is expected to improve to 2.8 per cent in 2027 but will remain 0.4 percentage point below the average during the 2010s.

The World Bank said: "The disruptions to commodity markets and international trade resulting from the conflict in the Middle East have led to shortages of energy and agricultural products and put upward pressure on energy and food prices in South Asian Countries (SAR)."Market trend analysis

Although the inflation has still generally remained within or below central banks' target ranges, but in Bangladesh the inflation has stayed elevated, alongside tight monetary policy.

"In Bangladesh and Nepal, domestic political uncertainties have waned, but private activity has been constrained by increased input costs and weaker investor sentiment. In these economies, the financial sector remains fragile, with subdued credit growth and deteriorating asset quality," the GEP report stated.

"Fiscal balances in the region are set to deteriorate in 2026. In several economies, including Bangladesh, Bhutan, India, and Maldives, fiscal deficits are anticipated to rise, partly owing to increases in subsidies intended to counteract the surges in energy prices," the WB report projected.

The World Bank said the weak growth in developing economies has stalled progress toward advanced-economy income levels. By 2028, developing economies other than China and India will have collectively experienced nearly a decade of no progress on narrowing their per capita income gap with advanced economies, the report finds.

"Developing countries have faced a series of challenges over the last decade," said Ajay Banga, President of the World Bank Group.

According to the report, the closure of the Strait of Hormuz has severely disrupted energy markets, with Brent crude oil prices projected to average $94 a barrel in 2026, 36 per cent above 2025 levels, assuming the worst disruptions abate in July.
Fertiliser prices are forecast to increase significantly this year, with knock-on effects for food prices. Together, these pressures are pushing up global inflation, which is expected to rise to 4.0 per cent this year, up substantially from 3.3 per cent in 2025, the GEP report said.

About the global economy, the WB said if energy supply disruptions prove more severe than currently assumed and are accompanied by substantial financial stress, global growth could fall to just 1.3 per cent in 2026, and inflation would rise to 4.4 per cent.

The Dhaka Stock Exchange (DSE) and the DSE Brokers Association of Bangladesh (DBA) have welcomed the proposed budget, saying its reform measures will strengthen the country's capital market, restore investor confidence and create a more investment-friendly environment.

In a statement, DSE Chairman Mominul Islam said the budget reflects the government's commitment to improving market governance and ensuring the long-term stability of the capital market.

He welcomed initiatives aimed at enhancing coordination among regulatory authorities and capital market institutions, saying the measures would improve transparency, accountability and overall market efficiency.

Mominul also appreciated the simplification of the Non-Resident Investor's Taka Account (Nita) operating process, noting that it would help attract both domestic and foreign investment while increasing market depth.

Referring to the DSE's ongoing reforms, he said the exchange has already taken steps to shift from the current T+2 settlement cycle to T+1 and eventually T+0, which would significantly improve settlement speed, safety and efficiency in line with international standards.

The DBA also termed the proposed budget timely and investment-friendly.

In a separate statement, DBA President Saiful Islam said the budget demonstrates a strong commitment to building a transparent, credible and robust capital market capable of supporting long-term investment financing, industrialisation and economic growth.

He highlighted several key initiatives, including strengthening the regulatory framework, enhancing investor protection, improving governance and accountability, expanding the bond market, promoting corporate bonds, mutual funds, green bonds and sukuk, simplifying the listing process, making disclosure systems more transparent and business-friendly, introducing municipal bonds, and encouraging equity-based financing over excessive reliance on bank lending.

According to Saiful, these initiatives could open a new horizon for the development of Bangladesh's capital market.

He added that the budget's clear policy commitment to positioning the capital market as a key driver of the economy, if effectively implemented, would attract both domestic and foreign investment, enable entrepreneurs to raise capital more easily, and accelerate employment generation and industrial growth.

Noting that the story of Bangladesh-China relations extends far beyond the fifty years of formal diplomatic ties, experts from both countries at a book launching-cum-seminar have said the next 50 years promise even greater opportunities for both nations and for the wider region with vision, patience, and continued cooperation.

Ahead of Prime Minister Tarique Rahman's scheduled visit to China later this month, the experts highlighted that understanding history is essential for shaping the future and that the friendship between Bangladesh and China, nurtured over generations, remains a bridge connecting civilisations, economies, and people.

The event marking the formal launching of the book titled "50 Years of Bangladesh-China Relations: Achievements, Challenges & Prospects" was held at Baridhara in the capital on Friday (12 June) evening as part of the Cosmos Dialogue hosted by Cosmos Foundation, the philanthropic arm of the Cosmos Group.

The seminar was chaired by Cosmos Foundation President Iftekhar Ahmed Chowdhury. The book is co-edited by Cosmos Foundation Chairman Enayetullah Khan and Professor Imtiaz Ahmed.

Air Vice Marshal (retd) Altaf Hossain Chowdhury, MP, distinguished fellow of the Centre for Policy Dialogue and eminent economist Debapriya Bhattacharya, Barrister Ahmad Bin Quasem Arman, MP, Chargé d'Affaires of the High Commission of Singapore in Dhaka Mitchel Lee, Cultural Counsellor at the Embassy of China Li Shaopeng, Executive Member (Planning and Development) of the Bangladesh Economic Zones Authority Major General (Retd) Md Nazrul Islam, Director General of the Bangladesh Institute of International and Strategic Studies Major General ASM Ridwanur Rahman, Chinese Enterprises Association in Bangladesh President Han Kun, and former deputy press secretary of the interim government Abul Kalam Azad Majumder were also present.

The speakers discussed the PM's upcoming official visit to China, as the two countries eye new investment agreements, infrastructure projects, and economic initiatives that are expected to strengthen cooperation further.

Plans for the modernisation of Mongla Port, the Teesta River Comprehensive Management and Restoration Project, and discussions on a future Free Trade Agreement were seen as important steps toward shared prosperity.

From the next fiscal year, a 15 percent capital gains tax may apply when selling gold, jewellery, digital currencies, or club memberships.

Finance Minister Amir Khosru Mahmud Chowdhury proposed the measure in the Finance Bill 2026 while presenting the national budget for the fiscal year 2026-27 in parliament on Thursday.

Under the proposal, profits from selling or transferring gold, silver, jewellery, precious stones, diamonds, coins, digital currencies, artworks, antiques, and club memberships declared in a taxpayer’s return will be treated as capital gains and taxed at 15 percent.

Capital gains from securities will also be taxed at 15 percent, including treasury bills, bonds, savings instruments, debentures, sukuk and other shariah-based securities, as well as shares or stocks issued by companies and other entities.

The government has proposed the tax on gold and jewellery at a time when prices have risen sharply in recent years.

Gold was priced at Tk 1.72 lakh per bhori on June 5, 2025. It then rose steadily to Tk 2.24 lakh per bhori on June 13, 2026. Earlier, on January 29 this year, it had reached Tk 2.86 lakh per bhori, the highest level in Bangladesh’s history.

After falling four times in a row, gold prices in the domestic market rose again yesterday, driven by higher international prices of pure gold, prompting the Bangladesh Jewellers Association to adjust local rates.

Yesterday, the price of 22-carat gold increased by Tk 6,590 per bhori, bringing it to Tk 224,940 per bhori.

Industry insiders fear the new tax may discourage formal transactions, encourage asset concealment, and create difficulties for people needing to sell gold during financial emergencies.

INDUSTRY OPPOSITION

Enamul Haque Khan, president of the Bangladesh Jewellers’ Association, has called the proposed capital gains tax on gold “illogical and unacceptable” for the industry.

“We are already preparing a response and will announce a protest programme seeking its withdrawal,” he said.

He argued that gold should not be treated like a regular financial asset for taxation, saying, “Gold is usually kept as gold, not converted into cash. Globally, it is measured by weight, not value.”

Khan warned that traders may become reluctant to sell gold if the tax is imposed.

Comparing the proposal with VAT, he said that while VAT compliance has improved over time, adding or replacing taxes with a capital gains tax would not bring major benefits and would instead make the tax system more complicated.

He also said the measure could discourage formal transactions, reduce transparency, and create unintended effects in the gold market.

Using a train analogy, he said the sector must work as a single system, adding, “All parts need to function together. If policies are applied partially, the system will not run smoothly.”

INCENTIVES FOR THE JEWELLERY SECTOR

Despite the proposed tax, the jewellery sector has also received budget incentives expected to support business growth.

The finance minister has proposed replacing the existing 5 percent VAT with a fixed VAT of Tk 2,500 per bhori of gold.

The government has also proposed reducing the tax deducted at source on purchases of gold, silver, jewellery, precious stones, diamonds and platinum from 5 percent to 0.5 percent.

Under this proposal, any individual or business buying these items will have to deduct 0.5 percent tax at source from the seller at the time of purchase.

However, Khan said these incentives would have little impact if the government proceeds with the 15 percent capital gains tax.

NBR DEFENDS PROPOSAL

Officials of the National Board of Revenue have rejected the industry’s criticism, with a senior official saying, “We have included the provision in line with global standards.”

On club memberships, the official said the rule would apply to registered clubs mainly used by higher-income groups.

The finance minister has also proposed a 10 percent tax deducted at source on fees for joining, renewing, transferring or changing club memberships.

The hike in import duties on plastic resins in the proposed national budget for the fiscal year 2026-27 will create fresh challenges for Bangladesh’s plastic industry, raising production costs and affecting a wide range of downstream sectors, industry insiders say.

The government has proposed doubling the import duty on two key plastic raw materials -- PVC (polyvinyl chloride) and PET (polyethylene terephthalate) resins -- from 5 percent to 10 percent.

Stakeholders warn that the move will significantly increase production costs in the plastic, beverage, electrical, electronics, packaging, construction and automobile sectors, with the burden ultimately being passed on to consumers.

PVC resin, one of the most important raw materials used in Bangladesh’s plastic industry, is widely used in the production of pipes, fittings, water tanks, household products, flooring materials, electrical wire and cable insulation, synthetic leather, and shoe soles.

PET resin, meanwhile, is extensively used to manufacture beverage and food bottles, containers, packaging materials and various industrial products.

Considering their widespread use, the impact of the duty hike on these two materials will extend beyond the plastic industry, affecting the construction, packaging, electricity, healthcare, electronics and automobile industries.

Bangladesh’s annual demand for PVC resin is around 5 lakh tonnes, while demand for PET resin stands at approximately 3.5 lakh tonnes, bringing total annual demand to about 8.5 lakh tonnes.

In contrast, local production capacity stands at only about 1.5 lakh tonnes for PVC resin and 1 lakh tonnes for PET resin.

Consequently, around 70 percent of the country’s resin demand is met through imports, making the industry highly dependent on foreign supplies.

Given this reliance, higher import duties will directly raise production costs.

The plastic industry is currently growing at an annual rate of 8-10 percent, driven by low production costs, competitive labour costs, easy access to raw materials and rising domestic demand.

More than 5,000 plastic manufacturing enterprises operate in Bangladesh, around 98 percent of which are small and medium-sized enterprises (SMEs). Several large companies, including Pran-RFL Group, Bengal Plastics, Akij Plastics, National Polymer, Anwar Group and ACI Limited, play leading roles in the sector.

If the duty on imported resins is increased from 5 percent to 10 percent, import costs will rise significantly, increasing the production costs of pipes, fittings, water tanks, beverage bottles, packaging materials, electrical cable insulation, synthetic leather, footwear and various everyday products. This is likely to lead to higher market prices and additional pressure on consumers.

The industry is already facing challenges due to rising global resin prices caused by geopolitical uncertainties and conflicts in the Middle East. In such circumstances, the proposed increase in duties on key raw materials could place further strain on manufacturers.

Bangladesh’s plastic industry not only serves domestic demand but is also strengthening its position in international markets.

Plastic products from the country are currently exported to around 70 countries, and export earnings from the sector have been increasing steadily. However, the industry remains heavily dependent on imported raw materials.

Industry insiders argue that increasing import duties before achieving self-sufficiency in domestic resin production could weaken the competitiveness of local manufacturers. They also note that locally produced resin currently costs around Tk 10 more per kilogramme than imported resin, suggesting that policymakers should focus on addressing the factors behind the higher domestic prices.

Until Bangladesh achieves competitive pricing and greater self-sufficiency in resin production, industry stakeholders believe, the government should reconsider its decision to increase import duties on PVC and PET resins.

Eminent economists have described the proposed national budget for fiscal year (FY) 2026-27 as 'highly ambitious', warning that financing constraints and weak implementation capacity could pose significant challenges for the newly formed government.

They cautioned that failure to mobilise adequate revenue and foreign financing could force excessive reliance on the banking sector, potentially squeezing private-sector credit and slowing job creation.

The economists stressed the need for deep institutional reforms and a stronger focus on value for money, rather than routine budget implementation.

Eminent economist Dr Mustafa K. Mujeri said the budget appears designed to "please everyone", reflecting the finance minister's earlier statement that it would cater to all sections of society.

However, he noted that this approach is typical in the early budgets of a new government.

"It can be said that attention has been given to everyone in terms of allocation," he said, adding that health, education, development, entrepreneurship, start-up capital and other areas have all been addressed.

However, he emphasised that the key issue lies in implementation.

"We can achieve the desired results only if the budget is implemented properly, keeping in mind the context in which it was formulated and the allocations were made," he said.

Dr Mujeri identified two major obstacles to implementation of the large budget -- financing and the efficient use of funds.

"The revenue target set by the finance minister is impossible," he said.

He recommended structural reforms to improve revenue collection and reduce dependence on bank borrowing to avoid crowding out private sector credit.

At the same time, he warned against excessive withdrawal of funds from the banking system, saying it could create liquidity pressures and restrict private investment.

Dr Selim Raihan, Professor at the Department of Economics, University of Dhaka, said the budget is ambitious in tone but cautious in macroeconomic design.Economics

He said it correctly identifies the economy's main challenges, including weak growth, high inflation, low revenue mobilisation, fragility in the banking sector, rising debt-servicing costs and external shocks.

He noted that the budget places emphasis on private investment, employment, social protection, education, health, energy security, deregulation and regional development, which is broadly appropriate.

Proposals on investment incentives, support for SMEs and startups, and improvements in logistics and export infrastructure indicate an intention to move beyond a narrow growth model.

However, he said the budget is stronger in diagnosis than in operational clarity.

Dr Raihan said the budget simultaneously promises stability and expansion -- lower inflation, higher investment, increased social spending, stronger revenue collection, bank recapitalisation and tax concessions -- without clearly explaining sequencing or trade-offs.

"The main challenge will be implementation," he said.
He noted that long-standing weaknesses in tax administration, public expenditure quality, procurement, project readiness, banking governance and local-level service delivery cannot be addressed through budget announcements alone.

He warned that revenue targets would be difficult to achieve without a transparent tax expenditure framework and strict performance conditions for exemptions and incentives.

Similarly, public spending in education, health and social protection would only deliver meaningful results if leakages are reduced and outcomes properly monitored.

Dr Raihan said the way forward should be disciplined and practical, with measurable reform milestones, regular progress reporting, protection of priority spending, time-bound and conditional investment incentives, stronger banking-sector governance before further recapitalisation, and safeguards against crowding out private credit.

"In short, this budget can become a useful first step, but only if it is followed by serious institutional reform rather than routine implementation," he added.

Dr M Masrur Reaz, Chairman and Founder of Policy Exchange Bangladesh, described the FY2026-27 budget as an ambitious attempt to build a welfare-oriented state and investment-led growth model, but warned that success depends on overcoming persistent weaknesses in revenue mobilisation, project implementation and governance.

In an instant reaction to The Financial Express, he said the budget outlines a broad reform agenda centred on social protection, investment promotion, deregulation and foreign direct investment, while seeking to shift the economy away from debt-driven growth.

Professor Muhammad Mahboob Ali of Bangladesh University of Business and Technology (BUBT) said the budget provides a strategic framework aimed at stabilising the economy and realigning priorities.

He said the Tk 9.38 trillion budget represents a major test for the new government, requiring a shift away from overly ambitious growth targets towards stabilisation, financial sector reform and easing inflationary pressures.

He noted that revised FY26 estimates place total revenue between Tk 5.93 trillion and Tk 7.01 trillion, while FY27 projections indicate an 18 per cent rise in income, including grants.

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

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

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

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

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

Industry scepticism

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

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

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

Experts oppose indemnity for undeclared funds

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

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

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

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

Tax burden on EVs to fall

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

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

Major relief for plug-in hybrids

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

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

Charging equipment to get zero-duty facility

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

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

Higher taxes on petrol and diesel vehicles

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.