The Institute of Chartered Accountants of Bangladesh (ICAB) has welcomed the national budget for FY26 in the challenging time with some observations such as lowering tax in online trading and cashless transaction.
The view was expressed at a post-budget press conference at ICAB's office here on Wednesday.
Speaking at the press conference, Maria Howlader, president of ICAB thanked the interim government that for making a major policy change for the first time in the history of Bangladesh.
A major financial instrument like the national budget has promised institutional recognition for the unpaid and unacknowledged services and household work of women in the country, and through this, the government is planning to include the economic value of women's unpaid labour in the calculation of the country's GDP.
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She also said, “We believe that expanding the tax net to increase the tax-GDP ratio is essential. We believe that the proper implementation of the ICAB Document Verification System (DVS) is making a significant contribution to achieving the desired goal of revenue collection and will contribute more in the future.”
The budget deficit has been set at 3.62 percent of GDP, which will be financed through domestic and foreign debt. The ICAB believes that setting a lower budget deficit is a wise move in the context of high inflation and limited revenue space.
The revenue collection target for the fiscal year has been set at Tk 5.64 lakh crore, which is 4.25 percent higher than the original target of Tk 5.41 lakh crore last year. It will be difficult to achieve this target with the existing tax structure and tax collection process.
However, it is not impossible to get close to this revenue collection target by modernising the tax structure and tax collection process, said the ICAB president.
“There is a plan to make it mandatory for all taxpayers to file their annual income tax returns online from next year. We believe that online return filing has gained wide acceptance among taxpayers. If all taxpayers can ensure online filing of their annual income tax returns, the number of return filers will increase,” said Maria.
In view of the persistent inflationary pressures, the new budget proposes to increase the tax-free income limit for individual taxpayers from Tk3.5 lakh to Tk3.75 lakh—but from the financial years 2025-26 and 2026-27. This tax will not be much of a relief for the lower- and middle-income earners, said ICAB observation.
Snehashis Barua, founding partner of accounting firm Snehasish Mahmud & Co gave a presentation on the proposed national budget.
He highlighted different issues of proposed budget including expecting GDP, interest rate, corporate tax, listed company tax and cashless transaction company taxes.
He said achieving the GDP of 6.5 percent will be very challenging as revenue shortfall pushes the government to reduce the ADP volume to Tk2.30 lakh crore. At the same time achieving revenue target of Tk5.64 lakh with 8.88 percent growth is almost impossible as the investment declined due to high cost of fund (higher interest rate).
Shubhashish Bose, CEO of ICAB and Mohammed Humayun Kabir, council member and past president also spoke at the event.
Md. Humayun Kabir FCA, vice president, South Asian Federation of Accountants ( SAFA), chairman TCLC and a former president of ICAB, moderated the question-answer session in the press conference.