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.

The government has proposed the introduction of a fully digital e-loan that will allow individuals to obtain up to Tk 50,000 through an online process, aiming to improve access to finance and expand financial inclusion.

Finance Minister Amir Khosru Mahmud Chowdhury unveiled the proposal while presenting the national budget for fiscal year 2026-27 in parliament on Thursday.Personal finance e-book

According to the budget proposal, loans of up to Tk 50,000 may be provided for a period of 12 months through a fully digital process to simplify the receipt and disbursement of small loans.

"The introduction of e-loan has been allowed to simplify the receipt and disbursement of small loans. Loans of up to Tk 50,000 may be provided for a period of twelve months through a fully digital process," the finance minister said in his budget speech.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has welcomed the proposed national budget for the FY2026-27, describing it as broadly business-friendly and reform-oriented.

However, the apparel industry body has also urged the government to incorporate five key demands that it says were not addressed in the budget.

In a statement issued today (13 June), BGMEA said the proposed budget includes several positive initiatives such as policy stability, digitalisation of the tax system, simplification of business startup procedures, incentives for renewable energy, modernisation of the bond and VAT systems and tax benefits for SMEs and women entrepreneurs.

The association said these measures send a positive signal for industry and investment amid global and domestic economic challenges.

BGMEA noted that the ready-made garment (RMG) sector is currently facing significant pressure due to global slowdown and rising production costs.

According to the organisation, during the current fiscal year, export earnings from RMG declined by 3.41%, average unit price fell by 1.55%, and back-to-back L/C openings for raw material imports dropped by 7.93%. It also claimed that around 400 factories have shut down over the past three years.

Against this backdrop, BGMEA placed five key demands before the government.

The demands include reducing the export source tax on garments from 1% to 0.65% and keeping it stable for the next five years; fully waiving the 10% tax deduction at source on cash incentives instead of the recently reduced 5%; and removing the 1% double source tax on subcontract values, along with simplifying VAT exemption procedures for small and medium factories.

The association also called for ensuring that the 12% corporate tax rate for the garment sector and 10% rate for green factories are not increased due to other income sources.

BGMEA also demanded withdrawal of proposed additional import duties on polyester staple fibre (PSF), PVC resin and PET resin, considering the growing potential of man-made fibre-based garment exports.

The association said that after Bangladesh's graduation from the Least Developed Country (LDC) category, reducing production costs, ensuring affordable energy supply, and further simplifying customs and port procedures are essential to remain competitive in the global market.

The government is planning a Tk192.66 crore project to establish a national artificial intelligence (AI) hub and train a new generation of AI professionals, with most of the funding expected to come from a grant by the Korea International Cooperation Agency (Koica).

The project, titled "Fostering Innovative Technology Experts with a Focus on Artificial Intelligence (AI) in Bangladesh", will be implemented by the Bangladesh Hi-Tech Park Authority (BHTPA) under the ICT Division between July 2026 and December 2029.

Of the total cost, Tk159 crore will come from Koica and Tk33.66 crore from the government.

According to project documents, the initiative aims to establish a state-of-the-art AI Hub Center, develop AI curricula, strengthen industry-academia collaboration, support startups and create international employment opportunities.

The project targets training 865 AI and digital technology specialists, establishing 30 AI-based startups, publishing 10 international AI research papers and achieving an 80% employment rate for trainees. It also includes Korean language training for 230 participants and infrastructure development for the AI hub.

The ICT Division recently urged the Planning Commission to quickly approve the project's Technical Assistance Project Proposal (TAPP), warning that delays could jeopardise Koica's proposed $13 million grant.

According to an official letter, the project proposal was sent to the Planning Commission and the Economic Relations Division (ERD) on 1 December 2025, but approval is still pending. As a result, the ERD and Koica have been unable to sign the required Record of Discussion (RoD) and Terms of Reference (ToR).

The ICT Division said Koica is reviewing its project portfolio and considers signed RoDs and ToRs essential for funding decisions. The ERD has also cautioned that delays could put the grant at risk.

Project documents describe Bangladesh as being at a critical stage of digital transformation, with demand for advanced ICT and AI skills far exceeding current capacity. While AI has been identified as a strategic priority under the National AI Policy 2024, existing institutions lack the infrastructure and expertise needed for advanced training and research.

Officials said the proposed AI hub would help bridge the skills gap, support innovation and entrepreneurship, and strengthen Bangladesh's position as a destination for technology investment.

The initiative builds on the government's wider high-tech park strategy. Bangladesh has already established software technology parks in Agrabad, Chattogram and Jashore, alongside IT training and incubation centres in Natore, Rajshahi, Kuet and Cuet, while major projects such as Kaliakoir, Sylhet and Rajshahi Hi-Tech Parks are also operational or under development.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Govt borrowing could drag down growth to 6.45%

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

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

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

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

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

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

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

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

Debt scenario

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The 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.