The interim government is planning to revise the national budget for the current fiscal year urgently and cut “wasteful expenditures” in order to alleviate the pressure on the foreign currency reserves and tame persistent inflation.
Lack of proper government actions is costing citizens dearly
It will not reduce capital flight, only encourage malfeasance
The parliament today passed the Tk 7,97,000 crore national budget for the 2024-25 fiscal year with the aim of achieving 6.75 percent GDP growth rate and keeping annual inflation at around six percent
The government has moved away from its decision to raise the highest income tax rate to 30 percent and end tax holidays for investors in economic zones and hi-tech parks.
It is important to recognise that trade has been the handmaiden of Bangladesh’s development.
The share of the total allocation for spending directly on poverty reduction has come down for the upcoming fiscal year despite persistently higher inflation, deepening the uncertainties of the poor.
Despite widespread condemnation from economists, watchdogs, businesspeople and even multiple lawmakers, the government is expected to retain the amnesty allowing individuals and businesses to whiten black money without scrutiny by paying a 15 percent tax in the upcoming fiscal year.
The proposed budget for fiscal year 2024-25 offered no relief to startups and neglected their long-standing demands, in sharp contrast with the government’s vision for a Smart Bangladesh, where startups are key economic drivers.
The government’s target in the proposed budget for 2024-25 on increasing private sector investment is ambitious and will be difficult to achieve, said businesspeople and experts citing high bank interest rates and a shortage of US dollars.
The budget for the next fiscal year may not be able to end the chronic gas shortage, cut import reliance and guarantee credible supply of electricity as it has fallen short of taking up sufficient measures needed to ensure energy sustainability, the Centre for Policy Dialogue (CPD) said yesterday.
The government plans to borrow Tk 137,500 crore from the banking sector in the fiscal 2024-25 to finance the budget deficit. If the Bangladesh Bank does not provide any fund, the entire amount will need to come from the commercial banks.
Monetary policy stance should be tight, the economist said in an MCCI-PRI organised post-budget discussion
If someone receives a gift, they will have to show it in their income tax return at the end of the year. At the same time, the person who gives the present will also have to inform it in their income tax return.
The government’s overdependence on the banking sector to finance its budget deficit will affect the financial sector as well as hurt private sector investment and employment generation, according to experts.
The new budget can be described as a “crisis response”
Currently, investors in the EZs and hi-tech parks qualify for a tax break for a decade starting from the first year of their operations. They are entitled to a full tax waiver in the first three years.
Bangladesh is heading towards an economic system devoid of moral values, which is causing a breakdown in financial discipline, spoiling the business climate, and discouraging honest taxpayers, said noted economist Wahiduddin Mahmud.
Economists today expressed deep concerns over the current situation in the banking sector of Bangladesh and warned that the recovery from the current economic crisis would not be possible without addressing the sector’s vulnerability.
