The budget for the fiscal year 2020-21 has been presented amid the stagnation of country’s economy due to the pandemic situation. The Finance Minister AHM Mustafa Kamal presented the budget proposal on June 11.
The minister presented the budget for FY2020-21 in a parliamentary session chaired by the Speaker Shirin Sharmin Chowdhury with the presence of Prime Minister Sheikh Hasina.
Read previous budget for FY 2018-19 here
This year AHM Mustafa Kamal has tabled a national budget of Tk568,000 crore for the FY2020-21, the biggest in Bangladesh’s history.
Here are the nutshell of the announcements of the proposed national budget for 2020-21 fiscal year.
Tk29,247 crore for Health sector
Finance Minister AHM Mustafa Kamal has announced a total of Tk29,247 crore for overhaul of the health sector has been battered by the Covid-19 pandemic, in the budget for the 2020-21 fiscal year.
Each court to be transformed into an e-court room
Mustafa Kamal told an e-judiciary project has been taken to bring the subordinate courts in Bangladesh under the ICT (information and communication technology) network.
Power, energy sector gets Tk26,758 crore
The power and energy sector of Bangladesh is set to receive an allocation of Tk26,758 crore in the proposed national budget for the 2020-21 fiscal year.
Deficit will be 6% of GDP
The government has forecast that the overall FY2020-21 budget deficit will be Tk190,000 crore as 6% of the GDP.
Development of youth and sports
Kamal said the government is playing an important role in the development of sports and culture for the youth of Bangladesh and Tk1,478.93 crore has been proposed for the sector.
Military spending increases by Tk2,327 crore
The chunk of defence budget for the FY2020-21 has been increased by Tk2,327 crore than that of the outgoing fiscal year.
Tk66,401 crore budget proposed for education sector
The government has proposed a budget of Tk66,401 crore for the education sector in the next fiscal year, up from a budget of Tk61,114 crore in the outgoing 2019-20 fiscal year.
AIT increased for cars, SUVs
Finance Minister has proposed to raise the advance income tax (AIT) for private cars and sport utility vehicles (SUVs) for the incoming FY2020-21.
Social safety net programs to get 16.83% of total budget
The government has proposed an allocation of Tk95,574 crore for the social safety net programs for the 2020-21 fiscal year in its fight against poverty and coronavirus-related issues.
Tk10,000 crore for fight against Covid-19
In a bid to fulfill emergency requirements over the Covid-19 pandemic, Finance Minister AHM Mustafa Kamal proposed a lump sum allocation of Tk10,000 crore in budget for FY2020-21.
Prices: Up and Down
Finance Minister has offered changes to duties on different products, which will result in increase or decrease in their prices.
Kamal proposes Tk100 crore for medical research
Allocation of Tk100 crore has been proposed for the development of health services through integrated medical research.
1% additional incentives for RMG to continue
Additional 1% cash incentives against exports of apparel goods with the existing incentives will continue for the incoming fiscal year.
No VAT proposed on gold import
The government has proposed to withdraw Value Added Tax (VAT) on import of gold to boost up the gold importation through the legal routes.
60% hike in excise duty proposed for bank accounts with over Tk5crore
The government has proposed to hike excise duty on bank accounts with significant balances in an attempt to increase revenue collection for the next fiscal year, as well as pave the way for recovery of economy battered by the Covid-19 pandemic.
Mobile phone use likely to become costlier
Mobile phone use is likely to become costlier in the 2020-21 fiscal year, as the government has proposed a 5% hike in the supplementary duty (SD) on mobile phone services – voice and data – in the proposed budget.
takes up comprehensive plan with 4 key strategies
Amid the coronavirus crisis, the government has taken up a comprehensive plan with four main strategies discouraging luxury expenditures and prioritizing government spending that creates jobs.
RMG sector to enjoy 12% corporate tax for two more years
The $34 billion apparel sector of Bangladesh will continue to enjoy reduced corporate tax rate at 12% for the 2020-21 fiscal year, in a bid to help fight the Covid-19 impact.
BRTA services to cost more for private car, jeep owners
The owners of private cars and jeeps will have to pay more for obtaining different services provided by Bangladesh Road Transport Authority (BRTA).
Bangladesh aims to keep inflation under 5.4%
The government aims to keep inflation limited to 5.4% in the coming 2020-21 financial year, amid a global economy that is badly shaken because of the Covid-19 pandemic.
Tax on bank accounts with over Tk10 lakh goes up
Finance Minister Kamal has proposed raising the excise duties on bank accounts that hold over Tk10 lakh.
VAT on Covid-19 testing kits proposed to be exempted
Finance Minister Kamal proposed to exempt Value Added Tax (VAT) on coronavirus test kits to support detection and prevention of Covid-19.
50% penalty to check money laundering
The government has proposed to impose a fresh 50% tax to check trade-based money laundering and tax evasion through fake and inflated investment.
Tk2,000 rebate for taxpayers filing returns online for the first time
The government is giving the highest priority to the digitalization of the National Board of Revenue (NBR), Finance Minister AHM Mustafa Kamal has said.
Corporate tax rate remains unchanged, except for non-listed companies
The government has proposed to keep the income tax rate for company taxpayers unchanged for the FY2020-21, except for non-listed companies.
Tax-free income ceiling for individuals raised to Tk3 lakh
Finance Minister AHM Mustafa Kamal has proposed to raise the ceiling for tax-free income threshold to Tk3 lakh from the existing ceiling of Tk2.5lakh – the first time in five years.
Source tax for RMG increases to 0.5% for FY21
Tax at source for Bangladesh’s apparel sector, the $34 billion industry, increased to 0.5% from 0.25% for FY2020-21.
See the article in Bengali here
However, the government has fixed a higher borrowing target from banks for the fiscal year 2020-21, in order to finance the projected budget deficit. The growing popularity of chartered aircraft and helicopter flights might suffer a hit as the government has proposed a hike in the supplementary duty on the service by 5%. And also travel by air conditioned launch services will get costlier as the government has proposed to double the value added tax on the service and supplementary duty on local cosmetics will be increased to 10% from 5%.
Amid uncertainty and bleak future of a global economic recovery, Bangladesh government has set a target of 8.2% gross domestic product (GDP) growth for FY20-21. The cabinet approved the proposed national budget for the 2020-21 fiscal year on Thursday, during a special meeting presided over by Prime Minister Sheikh Hasina.
Source: Dhaka Tribune/The Daily Star/Daily Bonik Barta