Budget Snippets

PER CAPITA INCOME TO TOP $3k

Bangladesh's per capita income will be $3,000 at the end of FY25 as the government expects economic growth to recover. Per capita GDP is projected at $2,780 at the end of FY24. It has been growing steadily over the last two decades. It was $700 in 2000 and about $300 in 1990.

REVENUE-GDP RATIO TO RISE TO 9.7pc

The revenue-to-GDP ratio will accelerate to 9.7 percent in FY25 as the government looks to generate higher taxes by cutting exemptions, speeding up digitalisation, and implementing reforms. The ratio stands at about 8 percent in FY24, one of the lowest in the world. India's ratio is 16.98 percent, Indonesia's 11.59 percent, Vietnam's14.03 percent, and Thailand's 15.57 percent.

MPS' DUTY-FREE CAR IMPORTS GO

The government has scrapped the duty-free privilege for lawmakers in importing cars. They have been enjoying the facility since 1988. Now, they will have to pay a 25 percent duty on car imports. People pay a 25 percent import duty, a 15 percent VAT, 5 percent advance tax, and 400 to 500 percent supplementary duty on imported cars.

BANGLADESH 33RD ECONOMY

Bangladesh has become the 33rd largest economy in the world, according to the size of the gross domestic product estimated in 2023, two notches higher than in FY24. The country aspires to achieve the upper-middle-income status in 2031 and become a developed nation by 2041.

OFFSHORE BANK DEPOSITS EXEMPTED FROM EXCISE DUTY

Depositors, who park funds in offshore banking units (OBUs), will enjoy exemption from the excise duty on their foreign currency deposits in FY25. The government has offered the benefit as banks in the country are working to attract foreign currency holders, particularly non-resident Bangladeshis, to make deposits in their OBUs.

SURCHARGE STRUCTURE UNCHANGED

The government has kept the existing structure of surcharge, which is imposed on the wealthy. Currently, the rate of surcharge payable up to the net asset value of Tk 4 crore is nil. If the net asset value exceeds Tk 4 crore, a 10 percent surcharge is slapped. When the value crosses the maximum limit of Tk 50 crore, the rate rises to 35 percent.

CIGARETTES TO BECOME PRICIER

The supplementary duty on cigarettes has gone up by 1 percentage point to 66 percent in the upcoming fiscal year of 2024-25 as the government plans to make them costlier and cut their consumption. The value-added tax on the local production of cigarettes and bidi paper has been raised to 15 percent from the existing 7.5 percent.

ACS, REFRIGERATORS TO BE DEARER

The finance minister has proposed imposing 7.5 percent VAT on air conditioners, refrigerators, and freezers. At present, there is no VAT on ACs while it is 5 percent for refrigerators and freezers. Manufacturers and retailers estimate that 5.3 lakh ACs were sold in 2023, up from 3.3 lakh in 2022, as the country is increasingly witnessing higher temperatures.

15pc VAT ON AMUSEMENT PARK VISITS

The government has imposed a 15 percent VAT on amusement parks and theme park services. At present, they pay 7.5 percent VAT. In addition, the existing VAT exemption for tour operator services has been withdrawn. Over the last two decades, about Tk 12,000 crore has been invested in amusement parks, where about 6 lakh people are directly employed.