In the budget for FY26, the government has proposed reducing import duties on certain goods and amending trade rules to enhance competitiveness in preparation for the country’s impending graduation from the list of least developed countries (LDCs).

Despite pledging special attention to education and health, the government has proposed only slight increases in allocations for both sectors in the national budget for fiscal year (FY) 2025–26.

Budget FY26: What does it mean for you?

The budget for FY26 has drawn strong criticism from business leaders who say it lacks a clear roadmap for improving the investment climate, bolstering industrial competitiveness, and implementing overdue reforms in the banking sector.

High inflation has become the bane of low-income people’s existence for the better part of the past two years as spiralling prices have dramatically eaten away at their purchasing power.

A glimpse of the actual expenditure:

Annual income and tax rate

One of the main targets of this government is the recovery of stolen assets, or assets that have been pilfered abroad through capital flight.

The proposed budget seeks to increase the youth loan ceiling to Tk 2 lakh for trained individuals and Tk 5 lakh for successful entrepreneurs and also allocate Tk 100 crore fund for youths, as part of the interim government’s efforts to address youth unemployment.

Tax rates on income will remain the same as in fiscal 2024-25

Finance Adviser Salehuddin Ahmed has offered both empathy and arithmetic in his budget speech, laying out a vision that puts people, not just projects, at the heart of economic policy.

Ministry-wise Budget allocation for FY26 in crore taka

Individual taxpayers will see their tax-free income limit go up to Tk 375,000 from the fiscal year 2026-27. However, the rates in the corresponding slabs will be higher. And for the assessment year 2025-26, the tax-exempted threshold has been kept at Tk 350,000 of annual income.

Criticising this move by the interim government, the corruption watchdog said that it reflects a stance completely contrary to the objectives of state reform, particularly the core purpose of the Anti-Corruption Commission reforms

The proposed budget lacks structural changes while a few positive steps have been taken in isolation, said the Centre for Policy Dialogue (CPD) in its immediate reaction on the proposed budget.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has welcomed the proposed budget for keeping the source tax and corporate tax rates for the garment sector unchanged.

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has raised significant concerns over several provisions in the proposed Finance Ordinance 2025, warning that certain measures may hinder business growth and unfairly burden compliant taxpayers.

Birupaksha Paul, professor of economics at the State University of New York, described the proposed national budget as “brief and restrained,” marking a departure from the verbose and often overly ambitious budgets of previous years.

The interim government has proposed a 5 percent advance tax on the turnover of cigarette producers, which was 3 percent previously.

The vice chairman of Newage Group of Industries says in his budget reaction