Budget bets on growth, welfare
The proposed national budget for fiscal year 2026-27 is going to be presented as more than a conventional fiscal plan, combining business-friendly reforms with expanded social protection measures aimed at supporting economic growth while easing pressure on households.
With a total outlay of Tk 938,000 crore, the budget includes incentives for businesses, freelancers, farmers and low-income families, reflecting an effort to balance economic reform with social welfare, though experts opined that implementation may face challenges in many contexts.
A major focus of the budget is improving the business environment by reducing regulatory and compliance burdens. In response to longstanding concerns from the private sector over complex tax and VAT procedures, the government has proposed a series of reforms to simplify administration and lower compliance costs.
While VAT payments will continue to be made monthly, businesses will be allowed to submit VAT returns on a quarterly basis, reducing the number of annual filings from 12 to four.
The budget also proposes full automation of online VAT registration, fewer documentation requirements for firms using Enterprise Resource Planning (ERP) software, and streamlined customs procedures.
Business leaders say the measures could help improve the investment climate and support industrial growth.
Importers and exporters are also expected to benefit from several trade-facilitation initiatives.
To reduce delays and costs associated with customs clearance and product testing, the government plans to expand the number of institutions authorised to conduct testing.
In addition to existing facilities, laboratories accredited to international standards and approved by the Bangladesh Accreditation Board will be permitted to carry out tests.
The budget also seeks to simplify the Authorised Economic Operator (AEO) system, enabling trusted traders to clear goods more efficiently.
Among the most notable proposals is the planned withdrawal of the existing 7.5 per cent withholding tax on foreign earnings received by freelancers and digital content creators.
If approved, income earned through platforms such as YouTube, Facebook, TikTok and international freelancing marketplaces would no longer be subject to tax deduction at source.
With nearly half a million freelancers contributing to the country’s growing digital economy, the measure is expected to provide a significant boost to young entrepreneurs and technology professionals.
On the social protection front, the government has proposed a new Family Card programme targeting 4.1 million female-headed households.
Under the scheme, each family would receive Tk 2,500 per month. Authorities intend to gradually expand the programme to cover 16.1 million families over the next five years, making it one of the largest cash-transfer initiatives in the country’s history.
Farmers are also set to receive direct support through the introduction of Krishak Cards. Around 4.25 million farmers will receive annual assistance of Tk 2,500 to help offset rising production costs and support agricultural productivity.
The budget further strengthens existing welfare programmes by increasing allowances for elderly citizens, widows and persons with disabilities. The old-age allowance and widow allowance will rise from Tk 650 to Tk 700 per month, while the disability allowance will increase from Tk 900 to Tk 1,000. Educational stipends for beneficiaries are also being enhanced.
In a new initiative, unemployed workers in export-oriented industries will be eligible for temporary financial assistance of Tk 5,000 per month for up to three months, providing support during periods of job uncertainty.
The budget also proposes honorariums for workers serving religious institutions, including imams, muezzins, priests, shebaits and Buddhist religious leaders. Approximately 250,000 individuals are expected to benefit from the programme.
Additional assistance has been earmarked for the families of those killed or injured during the July movement, with eligible recipients set to receive monthly support of up to Tk 20,000.
Meanwhile, VAT exemption on Metro Rail fares is expected to remain in place for another year, helping to keep commuting costs stable for hundreds of thousands of daily passengers.
Taken together, the proposed budget seeks to combine economic reform with targeted social support, extending benefits to businesses, workers, farmers, freelancers and vulnerable communities while laying the groundwork for sustained economic growth.
