Budget shows strong reform intent: BUILD

In its initial reaction to the budget, BUILD described the proposed fiscal plan as a creative and innovative blueprint aimed at stimulating economic growth, generating employment, and improving the investment climate. 

The organization praised measures such as tax reductions, extended exemptions, and the expansion of automated government services, noting that these initiatives reflect a strong commitment to reducing bureaucratic hurdles and supporting private-sector development.

However, BUILD cautioned that the budget's ultimate success will depend on effective and timely implementation. 

The organization highlighted several challenges, including a large fiscal deficit, weaknesses in the banking sector, low revenue collection efficiency, and ongoing global economic uncertainties, all of which could undermine the budget's objectives if not carefully managed.

Regarding revenue mobilization, BUILD argued that expanding the number of Taxpayer Identification Number (TIN) holders alone would not be sufficient to achieve the government's Tk 6.95 lakh crore revenue target. 

It emphasized the need for greater transparency in tax collection and the full implementation of the proposed tax refund mechanism. 

On social protection spending, BUILD welcomed the increased allocation to the Social Safety Net Programme but questioned whether pension expenditures should be classified within the social safety framework, given that pensions account for a substantial portion of the allocation.

While acknowledging the government's increased emphasis on development spending, BUILD noted that longstanding weaknesses in project implementation by line ministries remain unresolved.

It called for stronger measures to improve public-sector execution capacity.

The organization also welcomed the reduction in bank borrowing targets, viewing it as a positive step toward easing pressure on the financial sector and creating more space for private-sector credit growth.

On tax and VAT reforms, BUILD praised several measures, including the reduction of withholding taxes in export-related sectors, the extension of VAT return submission deadlines, the lowering of deposits required for VAT appeals, and the replacement of the turnover tax with a fixed payment system for small businesses.

Nevertheless, it called for clearer guidelines on taxable value assessments and greater clarity regarding eligible economic activities under the revised VAT framework.

BUILD further highlighted the budget's support for the digital economy through VAT exemptions for freelancers and content creators, while stressing the importance of strengthening intellectual property rights to maximize the benefits of these incentives.

The organization also welcomed the introduction of a Free Trade Zone framework and recommended expanding duty-free raw material import facilities to a broader range of export-oriented sectors, subject to a limited negative list.

In the area of green growth, BUILD praised significant reductions in import duties on electric vehicles, EV charging infrastructure, and battery raw materials, as well as the continuation of tax exemptions for solar power generation.

However, it stressed that fiscal incentives alone will not be enough to drive a successful green transition, calling for stronger policy support, dedicated financing, and the development of new market participants.

Summing up its assessment, BUILD said the proposed budget demonstrates a clear pro-business and reform-oriented vision, but emphasized that effective implementation, institutional efficiency, and sound macroeconomic management will be critical to translating these ambitions into tangible economic outcomes, reports BSS.