This budget focusses on boosting foreign direct investment (FDI) in Bangladesh, which is a welcome move on the part of the Government. To promote FDI, Government has provided relief to foreign companies from multiple layers of taxation on dividend income. Moreover, the proposal to continue with reduced tax rates between 10-15% for ready-made garments and textile sectors, would also augment foreign investment, boost exports and generate employment opportunities. Overall, it’s a growth-oriented budget.
The annual budget clearly demonstrates the Government’s commitment to fuel sustainable economic growth in the country. Simplification of the corporate tax regime, reduced tax rates and export incentives should further attract foreign investments and generate much needed employment. The thrust on widening the social safety net, agricultural reforms and accelerating infrastructural development is welcome. It is also heartening to see the Government looking at digitally enabled growth; adopting technologies like blockchain, IoT and 5G is a step towards making Bangladesh future-ready.
The new VAT law (VAT and Supplementary Duty Act, 2012 and Rules 2016) has finally been scheduled to be put into effect this year.