Finance Minister AMA Muhith is going to place in parliament today another ambitious budget to the tune of Tk 2,95,100 crore, including Tk 97,000 crore ADP, for the financial year beginning on July 1 with his vigorous fiscal planning.
Today’s budget is literally the country’s 44th national budget and seventh of the series of budgets tabled by Muhith in his 2009-2015 Awami League regime.
Finance ministry, in a statement issued on Monday, said Muhith is going to set a rare history by presenting the budget in parliament. Earlier, he had placed two budgets in 1983 and 1984 during the then tenure of fallen autocrat HM Ershad.
The ‘can-do’ spirited Muhith will start reading his grand budget for the financial year 2015-16 in packed parliament at 3:00pm.
His speech includes public spending and income of the outgoing fiscal and proposals for allocations for sectoral development and non-development costs.
Muhith proposes widely tax-featured budget with expansion of social-safety coverage, pay hike for civil servants and high allocation for infrastructure at power and energy sector, road-railway connectivity, revitalising capital market and creating a business and investment-friendly climate as per ‘Vision 2021’ and graduating from the status of least developed country by cutting poverty.
This year’s proposed budget has focused on seventh five-year plan beginning from the new fiscal as the last budget under the sixth plan ends on June 30.
The pay rise is likely to raise non-development public expenditure by 13.4 percent. Primary estimation of finance ministry suggests that the government need an extra Tk 22,000 crore in two fiscals to fully implement the new scale.
In the upcoming fiscal, the estimates underpin the need for around Tk 10,000 crore, excluding expenditure on salaries for disciplinary forces.
The upcoming ADP outlay has been earmarked at Tk 97,000 crore. Initial ADP for the outgoing fiscal was Tk 80,315 crore while the revised ADP was downsized to Tk 75,500 crore later in April.
The government is desperate to implement some priority projects like Padma Bridge, Rampal Thermal Power Plant, Rooppur nuke plant, LNG terminal, Matrabari Power Plant and metro rail in the capital.
To materialise these projects, the government has set a higher tax-collection target in the next fiscal by bringing new taxpayers under the tax net.
Under the social safety net, the government has planned to expand monthly allocation for freedom fighters at Tk 10,000 from Tk 5,000 at present.
To meet the growing public spending, it has set the revenue mobilisation target at Tk 1,76,000 crore in the proposed budget. Of the target, NBR sources said, income tax Tk 65932 crore, VAT Tk 63902 crore and duty Tk 46536 crore.
The government’s tax plan includes imposing fresh duty on importing commodities, industrial raw materials and raising source tax on export income of the readymade garment manufacturers.
Currently, the source tax for RMG export is 0.3 percent. Earlier, Muhith told businesses that the tax rate will be increased from the upcoming fiscal.
He further said that corporate taxes will be redesigned. Besides, duty on import of motorbikes and electronic items like television, refrigerator, compressor, LED panel, LED TV and air conditioner be hiked.
To check capital flight or money laundering through LCs (letter of credits) on taking the duty-free advantage, the government is likely to impose 1 percent duty on selected items of capital machinery.
Interest on government securities, contractors’ income, doctors’ income, royalty, cigarette band roll, brick manufacturing and household income may see fresh tax in the budget, NBR sources added.
This year, advance income tax (AIT) may also be imposed on mobile set, router and modem imports.
The government is likely to impose 15 percent VAT on some tax-potential goods by exempting current supplementary duty as a preparatory exercise of implementing new VAT law from 2016.
General discussion on the new budget will begin on June 9 and continue for 14 workdays till June 28.
The budget is likely to be passed on June 30, a day after Prime Minister Sheikh Hasina and the finance minister deliver their concluding speeches on it.
The discussion on the amended budget for the outgoing fiscal will be held on June 7 and the amendments be passed the following day.