With the target of collecting Tk 5,31,900 crore revenue in the fiscal year of 2024-25, the first budget of the fourth consecutive term of the Awami League government will be presented at the Jatiya Sangsad on June 6.
According to the Finance Ministry sources, the size of this fiscals budget may be around Tk 796,900 crore.
This is also the first budget of the new Finance Minister Abul Hassan Mahmood Ali. He will be assisted by the countrys first woman State Minister for Finance, Waseqa Ayesha Khan.
Finance Ministry sources said that the focus of this years budget of the government will be austerity. This years budget has been estimated assuming a contractionary growth in the budget every year. As a result, the size of the budget is not increasing much this time.
The target of revenue collection in the upcoming budget is Tk 531,900 crore. It is 9.4 per cent of total GDP.
The target of revenue collection in the next budget is increasing to about Tk 32,000 crore. So the overall deficit (excluding grants) could be Tk 265,000 crore.
According to the information provided by National Board of Revenue (NBR), the revised target of revenue collection for the current financial year is Tk 410,000 crore. Out of this, the target for July-March is Tk 281,745 crore, against which the income has been Tk 259,866 crore. Accordingly, the target has been achieved 92.23 per cent. The revenue in the first nine months of the current fiscal year has increased by 15.23 per cent compared to the same period last year. Out of this, there has been an increase of 10.21 per cent in customs, 15.88 per cent in VAT and 19.20 per cent in income tax.
Sources in the Ministry of Finance said that the value added tax or VAT net will be expanded in Dhaka and Chattogram to collect a large amount of revenue in the next budget. Contracts have been made with private organizations especially for setting up EFD machines. Besides, new taxpayers will also be identified. The National Board of Revenue (NBR) plans to work in coordination with BRTA, City Corporation, DPDC to bring new tax payers under the net. Besides, e-challan is being made mandatory for payment of tax of Tk 20 lakh or above.
Earlier it was mandatory for Tk 50 lakhs. Besides, the government is planning to increase revenue management efficiency, increase collection and improve service quality through the implementation of Income Tax Act-2023.
The NBR has decided to reduce corporate tax rates conditionally. The Prime Minister agreed to reduce taxes in non-listed industries in the productive sector from 27.5 per cent to 25 per cent. However, taxes in all other sectors will remain unchanged.
The Prime Minister advised against increasing duties on the import of agricultural inputs and fertilizers, meaning the cost of importing these items will not increase.
To reduce taxpayer harassment and increase revenue collection, all taxpayers, both individuals and companies, will be required to submit returns through the self-assessment method in the next budget. This method avoids return assessments, which are currently required for individual taxpayers and optionally for companies. Major changes to the income tax law are expected in the next budget.
No Increase in Tax-Free Income Limit: Despite rising inflation, the tax-free income limit for individuals will not increase in the upcoming budget. Last year, this limit was raised from Tk 3 lakh to Tk 3.5 lakh.
Sources said 10 sectors are being prioritized in the upcoming budget. These include controlling inflation, ensuring digital health and education, giving priority to fast-track infrastructure projects, food for all, developing supply chains, achieving growth, tackling climate change and global crises, expanding the reach of social security programmes and modernizing every village.
According to sources in the Finance Ministry, the size of the budget for the new fiscal year may be around Tk 796,900 crore. But it will not exceed Tk 800,000 crore. This is 4.60 per cent more than the ongoing budget for the current fiscal year 2023-24. In terms of Taka the budget of the new fiscal year is increasing by Tk 35,115, crore which is 13 per cent of the total GDP. This size is being determined through the meetings held recently with the ministries and departments. However, the matter is not finalized yet.
The main target of the next budget is to reduce inflation. And to fulfill this target, the budget will be created based on 5 pillars. These are - Bank loan interest rates may be increased to control inflation, unnecessary imports may be discouraged or reduced, unnecessary expenditure may be reduced, money supply may be reduced in some sectors, subsidy amount may be reduced in various sectors.
In this years budget, the amount of foreign aid may increase by Tk 2,000 crore. In the new fiscal year, the foreign share allocation can be estimated at Tk 96,000 crore, which was Tk 94,000 crore in the current fiscal year. This figure is Tk 2,000 crore more than the original Annual Development Programme (ADP) and Tk 12,500 crore more than the revised ADP.
The government is not increasing the size of the ADP in view of the ongoing economic pressure in the country. The total allocation in ADP for the upcoming financial year 2024-25 is Tk 265,000 crore, which is only Tk 2,000 crore more than last fiscal year.
The foreign loan or grant target of the total allocation is Tk 100,000 crore. However, this time too, transport and power sectors are being given the most importance in the development budget. There is relatively more money allocation in these two sectors.
Later, according to the instructions sent by the Finance Division, the ADP for the fiscal year 2024-25 was fixed at Tk 265,000 crore and the Operations Department was informed of it. Of this, the government funding is Tk 165,000 crore or 62.26 per cent. The target of foreign loan-grant to meet the development expenditure is Tk 100,000 crore or 37.74 per cent.
In the revised ADP for the fiscal year 2023-24, the amount of foreign debt was Tk 83,500 crore. According to that, the amount of foreign debt in ADP is increasing by Tk 16,500 crore in one fiscal year.
