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Budget FY22: All stories

  • Published at 05:02 pm June 3rd, 2021
WEB_Finance Minister AHM Mustafa Kamal in parliament FY2021-22
FILE PHOTO: Finance Minister AHM Mustafa Kamal presents the proposed national budget for 2021-22 fiscal year in parliament, June 3, 2021 Focus Bangla

A quick access to all stories related to the proposed national budget for 2021-22 fiscal year, tabled at parliament on June 3

Kamal presents Tk603,681 crore budget for 2021-22 fiscal year

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.

Something for everyone leads to large deficit

All these measures clearly demonstrate the government’s intention to win over people’s hearts through a populist budget during the trying times of a prolonged pandemic.

Health allocation lacks vision, experts say

An overall increase in the allocation is misleading as the increase in the allocation for health services is marginal, and it was imperative that systemic leakages were addressed to ensure the money was spent efficiently. 

Budget widens social safety net to alleviate pandemic woes

The finance minister sets aside Tk107,614 crore for FY 2021-22.

A budget of tax cuts and exemptions

The finance minister proposed a reduction of tax for non-listed companies to 30% from 32.5% and for listed companies to 22.5% from 25%, aiming to boost the ratio of private investment to GDP and incubate rapid growth of trade and commerce.

Dependency on banks to meet deficit risky

The overall budget deficit for the fiscal year 2021-22 will be Tk214,681 crore, 35.5% of total budget.

Experts for proper planning as education budget up

Just like the previous year, the allocation for the education sector in the upcoming fiscal has gone up but it lacks a roadmap of utilizing the money in the process of rescuing the sector – now facing serious challenges due to the Covid-19 pandemic.

More allocation for technical and madrasa education

Finance Minister AHM Mustafa Kamal on Thursday proposed an allocation of Tk9,154 crore for technical, vocational and madrasa education in the 2021-22 fiscal year. It was Tk8,345 crore in the outgoing fiscal year.

Education might get costlier at private institutions

The effects of the proposed tax on private colleges, private medical colleges, dental and engineering colleges, and private universities may ultimately trickle down to the students.

Telecom operators feel left out

They are disappointed by the unchanged tax rates, having earnestly sought a rationalization of the existing tax rates, which is the among the highest in Bangladesh.

Around Tk25,125cr budget proposed to tackle climate change

The allocation, which is 0.73% of GDP (gross domestic product), will be spent by 25 ministries and divisions.

Women and Children Affairs Ministry budget hiked by 8.6%

In addition to the increased allocation for the ministry, gender and hygiene experts have hailed VAT exemptions to promote the local production of sanitary napkins as a big win for women.

Bangladesh attains highest GDP growth in Asia

Bangladesh has been able to attain real 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.

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. 

Budget FY22: What about money whitening?

Allowing the provision discourages honest taxpayers, say observers.

'Black money strengthened stock market'

The finance minister said that, under the provision of allowing previously undisclosed income to invest in the capital market with some reasonable conditions like mandatory one year lock-ins, 311 taxpayers have paid income tax of nearly Tk43.55 crore as of February 2021.

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." 

Revenue target set to Tk389,000 crore

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

10 mega projects to get lion’s share of ADP

The proposed budget has set aside Tk225,324 crore for ADP for 2021-22 fiscal year.

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.

Cigarettes to be pricier

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

Alcohol, perfume to become pricier

The government has already approved the proposal placed by the National Board of Revenue (NBR) to increase the AIT to 20%, which was only 5% earlier.

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.

SIM cards to become costlier

Finance Minister AHM Mustafa Kamal has proposed increasing the supplementary duty by 20% in the 2021-22 fiscal year.

Freedom fighters' monthly honorarium to be Tk20,000

The government has set aside Tk1,920 crore in the proposed national budget in this regard.

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.

Finance minister shares opportunities, challenges

He said  Bangladesh's image in the outside world will brighten after the graduation to a developing economy, which will bring foreign investment and create jobs.

14 ministries, divisions get lower budget

Despite more than 6% hike compared to last year’s budget, some 14 ministries and divisions are set to receive reduced allocation in the upcoming fiscal year.

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.

Fisheries and livestock sectors get Tk244cr hike

Tk3,437-crore bidget proposed for the Ministry of Fisheries and Livestock for FY2021-22.

Non-listed companies, OPCs to enjoy reduced corporate tax

Companies not listed with the bourses will now experience lower corporate tax rate, down to 30% from 32.5% in the upcoming 2021-22. The existing tax rate of 32.5% for companies applicable as one-person companies (OPCs) has been slashed down to 25% as well.

2% incentive on remittance to stay in place

In addition, special “package programs” will be initiated by concerned banks to increase the flow of remittances through the banking channel.

Tk587 crore allocated for cultural affairs

The amount is 0.098% of the proposed national budget of Tk603,681 crore for FY2021-22.

Defence allocation up 8%

Tk376.91 billion has been proposed for the Defence Ministry and other services under the ministry in the national budget for the FY2021-22.

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