Budget 2020-2021 at a glance
Published: 03:14 PM, 11 June 2020 Updated: 04:17 PM, 11 June 2020
Finance Minister AHM Mustafa Kamal is going to present his second and the country's 49th budget in the Parliament. At 3 pm on Thursday, the finance minister will present the budget on the second day of the 8th session of the 11th parliament, chaired by the Speaker Dr. Shirin Sharmin Chowdhury.
Prevention of epidemic COVID-19 is being given priority in this year's budget. After that, the finance minister is going to propose the biggest budget in the history of the country to revive the country's economy by making a living for the affected people.
Let's take a look at what is in the budget today-
Size of the budget:
Today, the finance minister will announce a budget of more than Tk 568,000 crore for the fiscal year 2020-2021. The title of the budget speech is ''Economic Transition and Future Pathway''. The proposed budget for the fiscal year 2020-2021 is 13.24 percent i.e. Tk 66,423 crore higher than the revised budget of the current financial year.
Noted that the budget of Tk 523,190 crore was announced for the financial year 2019-1020, but later, the revised budget stood at Tk 501,557 crore.
Among the operating expenses, the government has incurred a cost of Tk 3,48,180 crore in this budget. Tk 58,253 crore is being kept for the interest recovery on internal loans. Tk 5548 crore is being allocated for the interest recovery on external loans. Tk 36,990 crore is being allocated as capital expenditure for management of assets, land acquisition, structure and construction work, investment in shares and equity, etc. The cost of food has been shown to be Tk 567 crore. And Tk 4,210 crore is allocated for loans and advances (net) in government institutions.
On the other hand, Tk 215,043 crore is allocated for development expenditure. Of this, Tk 205,145 crore for the Annual Development Program (ADP). Tk 4,722 crore for special projects outside ADP. Tk 2,522 crore is allocated for development programs and schemes funded from own sources. Besides, Tk 2,654 crore is allocated for Food for Work program projects out of ADP.
Budget Income Proposal:
The main source of income in the budget is revenue collection. The budget has set a target of Tk 378,003 crore. Besides, the government will get a foreign grant of Tk 4,013 crore in this financial year. In all, the government's income will be Tk 382,0018 crore. The National Board of Revenue (NBR) will raise the revenue of Tk 330,000 crore. The revenue target from non-NBR taxes has been set at Tk 15,000 crore. Besides, the revenue target excluding taxes has been set at Tk 33,000 crore.
This time the finance minister has had to get the most pressure in coordinating income and expenditure. This time the total budget deficit has been set at 5.8 percent of GDP i.e. Tk 185,984 crore, which was 5 percent earlier. To fill the gap, the government wants to borrow Tk 80,017 crore from foreign net loans, besides setting a target of borrowing Tk 1,09,980 crore from domestic sources including Tk 84,980 crore from banks, Tk 20,000 crore from savings and Tk 5,000 crore from other sectors.
The size of the Gross Domestic Product (GDP) for the next financial year has been set at Tk 3,171,800 crore. The growth rate has been fixed at 8.2 percent. However, the new GDP is Tk 364,100 crore higher than the revised GDP of the current fiscal. In the current budget (revised) the size of GDP has been fixed at Tk 2,805,700 crore.
Rebates to increase investment:
Declining corporate taxes
To attract investment, corporate taxes is going to be reduced after 5 years. In the budget of the new financial year, the corporate tax is being reduced from 35 percent to 32.5 percent. However, the corporate tax rates for listed companies, banks, insurance companies, mobile operators, and cigarette manufacturers will remain unchanged. In the last, in the 2014-15 financial year, the corporate tax was reduced at 2.5 percent to 35 percent.
Turnover taxes decreased
Turnover taxes have been proposed to decrease in the budget to facilitate small and medium-sized businesses. It is being reduced from 4 percent to 3 percent. The VAT exemption limit is the same as before at Tk 50 lakh and the upper limit of turnover is Tk 3 crore. However, registration is being made compulsory in all categories of businesses.
Increasing tax- free income limit
After 5 long years, the tax-free income limit for individuals is being increased from Tk 2.5 lakh to Tk 3 lakh. The exemption limit for women, disabled, and gazetted freedom fighters is also increasing at a proportional rate. On the other hand, the individual tax rate is also being reduced. The maximum tax rate for individuals is being reduced from 30 percent to 25 percent. This will reduce the tax burden. However, the minimum tax rate remains unchanged.
Tax leave coverage is increasing
Tax leave benefits are being given to new industries in the budget. This time, the facility is provided to Artificial Fiber Production, Nanotechnology-Based Products, Artificial Intelligence, Automobile Parts, Robotic Design and Manufacturing, Electrical Transformer Production, Aircraft Maintenance, and Services. Earlier, tax leave was given to 26 industries.