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Budget at a glance
Deshsangbad Desk
Published : Thursday, 3 June, 2021 at 11:05 PM, Update: 07.06.2021 12:19:46 AM

The new budget is about 17.4% of the GDP and around 12% higher than the revised budget of the current fiscal year, while 6.34% higher than the main budget.

Bangladesh attains highest GDP growth in Asia

Bangladesh has been able to attain real Gross Domestic Products (GDP) growth of 5.2%, highest in Asia, Finance Minister AHM Mustafa Kamal said in his budget speech. According to IMF, Bangladesh economy will grow 5.0% in 2021 and 7.5% in 2022.

Bangladesh targets 7.2% economic growth

The new budget is about 17.4% of the GDP and around 12% higher than the revised budget of the current fiscal year, while 6.34% higher than the main budget.

Big tax cut for businesses

The finance minister proposed to reduce the tax rate for companies not listed in the stock exchange to 30% from 32.5%, and the tax rate for listed companies to 22.5% from 25% for 2021- 2022 fiscal year.

Prices up, prices down

Imported phones, alcohol, imported meat and poultry, cigarettes and soap are among commodities that are going to get more expensive, while Covid-19 test kits, ingredients to make medicines, microbus, hybrid vehicles and moped, local LPG cylinders, locally manufactured or assembled home appliances and locally produced electronic gadgets are among the commodities that are going to be cheaper.

30% income tax for corporations, NGOs

The finance minister proposed this rate saying that the entities currently enjoyed rates applicable for individuals, which was "inconsistent with our philosophy of taxation."

10-year tax exemption for agro industries, entrepreneurs

The agriculture entrepreneurs, who will process fruits, vegetables, produce dairy and dairy products, and produce child foods, will get the benefit.

Tax exemption proposed for small businesses owned by female entrepreneurs

Those enterprises that generate Tk700,000 or less in turnover would be eligible for the tax exemption.

Individual income tax remains unchanged

In the proposed budget, the finance minister said that the existing tax rate for individual taxpayers would also be applicable for third gender taxpayers.

Per capita income stands at $2,227

The per capita income was $2,064 in 2019-20 fiscal year. In 2005-06 fiscal year, the per capita income was $543.

Tk10,000 crore allocated for emergency response to pandemic

“In the last budget, we made a large allocation for the implementation of special activities under the Health Services Division to address the Covid-19 pandemic. Besides, we set aside Tk10,000 crore to meet the expenses related to unanticipated emergency requirements,” Finance Minister AHM Mustafa Kamal said during his budget proposal. “Therefore, like the budget of the last year, we also make commitment this year that the government will take all necessary measures to address the impact of the pandemic."

Health sector neglected yet again

Tk32,731 crore has been proposed in the FY2021-22 budget - which is only 0.95% of GDP - which is even less than the outgoing fiscal year's revised budget of 1.02%. The World Health Organization sets at least 5% of GDP spending on health as a minimum requirement for a country to fare well.

Revenue target set to Tk389,000 crore

The revenue target is said to be 11.3% of the country's GDP.

Tax exemption for locally manufactured goods

The finance minister proposed exempting taxes for 10 sectors yet again, including manufacturing of household items and vehicles in Bangladesh.

Analysis: Proceed with caution

Economist and former international development agency official Syed Akhtar Mahmood believes the government needs to employ a practice of linking strict performance conditions to any fiscal support provided to local industries.

Tk71,951 crore budget proposed for education sector

The proposed allocation for the incoming fiscal year is Tk5,550 higher than that in 2020-21 the fiscal year.

Cigarettes to be pricier

Prices of filtered bidi, jarda and gul sees no changes.

Inflation target set at 5.3%

In the 2020-21 fiscal year, the target was set at 5.4%.

Tax exemption for locally produced vehicles on the cards

The finance minister also proposed 10 years' tax exemption for the companies engaged in the production of certain home and kitchen appliances and light engineering products.

Govt's bank borrowing target set at Tk76,452 crore

The target is 4.13% lower than the revised target for the outgoing fiscal year.

Interest payments to increase

In the proposed budget for the upcoming 2021-22 fiscal year, expenditure based on interest payments has been fixed at Tk68,589 crore - 11.36% of the total expenditure in the budget.

Increasing taxes on mobile financial service providers proposed

"Financial inclusion, formalization of the economy and expansion of the tax net are of utmost importance to the national economy," the minister said while presenting the budget.

IT sector gets tax exemptions for 22 tech services

The tax exemption facility has been proposed to the providers of cloud service, system integration, e-learning platform, e-book publications, mobile application development service, and IT freelancing until 2024.

BGMEA: It’s a very significant budget

BGMEA President Faruque Hassan said the BGMEA board would evaluate the budget in detail on Saturday, and brief the media at 2pm on the same day.

Tax cuts for businesses with 10% or 100 third gender employees

Members of the third gender community are often deprived of the opportunity to engage in socio-economic activities and the need to engage them in mainstream society, the finance minister noted during the budget speech.

Withdrawal of surcharge on wealth with no taxable income proposed

Finance Minister Mustafa Kamal, during his presentation of the budget, also proposed to withdraw the provision of paying minimum surcharge.


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