The government has approved the national budget of Tk 6.78 trillion (678,064 crore) for the 2022-23 fiscal year with the aim to overcome the impact of Corona and return the country to the continuity of development.
Besides, the government wants to tackle the challenge to systematically control the rising inflation caused by the Ukraine-Russia war.
The budget for FY23 was passed by a unanimous vote of the members of parliament in the concluding session of the budget with Speaker Dr Shirin Sharmin Chaudhury in the chair on Thursday.
The implementation of this budget will start from today (July 1).
Earlier on June 9, the Finance Minister placed a Tk 6,78,064 crore proposed budget for FY23 at Jatiya Sangsad considering recovery from the pandemic, the Russia-Ukraine war and also keeping ahead six key challenges with containing inflation as the major one.
During the session, the MPs discussed various issues related to the proposed budget. This is the first time in the last two years since the Corona epidemic that MPs have been present in person and there has been a long discussion on the proposed budget.
In the proposed budget, the opportunity for repatriation of movable and immovable property has been canceled. However, anyone can bring cash with an announcement. In that case, there is an opportunity to bring it with 7.5 percent tax.
At the same time, amendments have been made to get corporate tax benefits at a lower rate. Companies that transact more than Tk 36 lakh a year through banks will get the benefit of paying corporate tax at a lower rate. In the proposed budget this limit was Tk 12 lakh per year.
In addition, the obligation to file returns by adding e-TIN (Taxpayer Sharing Number) for all services has also been waived. Return filing has been made mandatory only for individual taxpayers. Earlier, after presenting the budget, the supplementary budget for the outgoing fiscal year 2021-22 was passed in the parliament on June 13.
Meanwhile, the finance minister's proposed budget has been discussed for almost a month, but in the end, no change has been made in other basic issues, including the size of expenditure in the 2022-23 budget.
However, the Finance Minister placed the budget titled “Return to the Path of Development Leaving the COVID-19 Behind” in the national parliament with a 7.5 percent GDP growth and 5.6pc percent inflation projection.
The growth rate has been targeted to be 7.5 percent for the next FY 2022-2023.
The annual expenditure outlay is equivalent to 15.23 percent of the Gross Domestic Product (GDP) and the biggest in Bangladesh's history.
The size of the proposed budget is 14.25 percent larger than the revised budget and 12.32 percent bigger than the proposed budget for the current FY which were Tk 5.94 trillion and Tk 6.04 trillion respectively.
The expenditure outlay has projected a deficit of 36.14 percent or Tk 2.42 trillion with the revenue collection and grant receipt being estimated at Tk 4.36 trillion. The deficit is equivalent to 5.4 percent of the GDP whereas GDP-budget deficit ratio was 5.1 percent in the revised budget and 6.1 percent in the original budget for the current FY.
The highest allocation in the new budget has been earmarked for public administration that stands at 19.0 percent of the total outlay and it is followed by education and technology (14.7 percent), transport and communication (12 percent), and interest payment (11.9 percent).
Other sectors receiving large allocation include local government and rural development (6.6 percent), agriculture (6.2 percent), defence (5.9 percent), social security and welfare (5.5 percent), health (5.4 percent), public order and security (4.6 percent), energy and power (3.8 percent), and housing (1 percent).
Tk 5,000 as block allocation will be implemented as emergency measures to combat the pandemic.
The government is laying emphasis on how to combat such a complex pandemic situation as we experienced during Covid-19. To this end, the government is planning to develop the capacity to respond and control such pandemic quickly, conduct research in this sector and develop the institutional capacity, technical knowledge and skilled manpower to up-scale the overall capacity.
The government has earmarked Tk 100 billion as block allocation to meet any emergency expenditure.
Besides, the government has decided to introduce a universal pension system from the next fiscal year.
“In the 2008 election manifesto, Prime Minister Sheikh Hasina promised to introduce a universal pension scheme nationally to ensure old-age protection for the elderly citizens under a sustainable and well-organised social security framework,” the finance Minister said in his budget speech on 9 June.
The finance minister outlined six major challenges for the next fiscal year.
They will be containing inflation and enhancing domestic investment; financing additional subsidy required for the increased price of gas, power and fertilizer in international markets; utilizing funds available through foreign assistance and ensuring timely completion of high priority projects of ministries or divisions; ensuring timely completion of projects in education and health sectors; increasing collection of local Value Added Tax and raising the number of individual tax-payers; and maintaining stability in the exchange rate of taka and keeping foreign exchange reserves at a comfortable level.
