The private research organization CPD has raised concerns about the upcoming budget for the fiscal year 2025-26, stating that it will be a significant challenge for the interim government.
In a recent discussion, CPD officials stressed the need to move away from conventional budget practices and called for a complete overhaul of the country`s revenue structure.
Speaking at a budget recommendation meeting in Dhaka’s Dhanmondi area on Sunday, experts urged the government to raise the tax-free income threshold to 4 lakh taka per individual.
This suggestion came as part of broader recommendations for fiscal reforms in light of the country’s current economic situation.
Since the formation of the interim government following the July movement, the true extent of Bangladesh`s economic struggles has come to light.
The financial sector, especially the banking system, has been severely damaged due to corruption and mismanagement under the ruling Awami League government.
Additionally, the country is dealing with a fragile financial structure, the burden of foreign debt repayment, and a significant revenue shortfall of 1 lakh 5 thousand crore taka.
CPD’s Executive Director Fahmida Khatun emphasized the importance of strategic policymaking, saying,
"The 2026 national budget will be formulated at a time when Bangladesh is facing economic challenges. To tackle these, visionary and coordinated policies will be needed."
In light of the ongoing geopolitical instability affecting the region, CPD also expressed concerns about the control of inflation in the near future.
The organization recommended increasing direct financial assistance for the most vulnerable sections of the population, particularly the extremely poor.
Fahmida Khatun added, "A tax policy can be created that is integrated with trade and industrial policy and the overall development strategy. To implement this, institutional efficiency needs to be developed."
The researchers at CPD believe the upcoming budget offers an opportunity to make a substantial shift in the country’s revenue structure.
They also stressed that the government must address the challenges faced by developing nations in the formulation of this year’s budget.
Dr. Mustafizur Rahman, a Distinguished Fellow at CPD, stated, "We cannot impose any duties outside of customs duties that we do not take from our local producers."
In line with their recommendations, CPD also advised the government to reduce subsidies in the energy sector and increase allocations for the health and education sectors in the upcoming budget to ensure sustainable development.
The suggestions and warnings from CPD indicate that the interim government will need to carefully navigate the fiscal challenges ahead to ensure economic stability and progress.
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