Key Highlights

Major Allocations

Budget Tk568,000

Pillars of Recovery
1. Govt focuses on 4 pillars for recovery
2. The health sector: provision for additional allocation, incentives, compensations
3. Agriculture: boost food production, emphasis on farm mechanization, incentives
for irrigation
4. Social safety net program: reduce hardships of the poor working people due to
long general holidays and lockdowns amid the coronavirus pandemic
5. Job creation and rural development: tackle unemployment in the industry, SMEs
and services sector and the rural non-formal sector
Stimulating the Stock Market
Long- and short-term measures taken:
6. Increase participation of banks and NBFIs in the capital market
7. Provide easy credit facility for merchant bankers and institutional investors
8. Boosting investment capacity of state-owned Investment Corporation of
Bangladesh
9. Increase institutional investment, and listing multinational companies and state-
owned enterprises
10. Tax incentives: double taxation on dividend from listed companies is removed,
tax-free the dividend income in the stock market of up to Tk. 50,000.
11. Introduction of provision of TDS at the time of payment of interest and discount
on bonds instead of deduction of source tax upfront.
12. Introduction of withholding tax deduction on the commission fixed by the
Securities and Exchange Commission (SEC) to increase transactions of bonds in
the capital market
TAX & VAT Implications
 A 2% advance tax for the wholesale trades of some food products at the local
level, is likely to hike prices of essential commodities like rice and lentils
 Withdrawal of the 15 percent VAT on the import of gold bar, to discourage illegal
import of gold and encourage import of gold on legal routes
 Other than the essential commodities, jute, computer or computer parts, cotton and
yarn are also on the list
 Non-listed companies will see reduction in corporate tax by 2.5 % to fix it at 32.5
% from that of 35 % to ease the tax burden
 Tax rates for banks, leasing and insurance companies, mobile phone companies,
cigarette manufacturers and publicly traded companies have remained unchanged
 RMG factories having green building certification enjoy a special tax rate of 10
percent for another two years.
 Reduction of the rate of withholding tax on export proceeds.
 Increment of income tax free threshold of individual by Tk 50,000 for each slab
 Reduced tax on imported farm machinery: the customs duty on tires and tubes has
been proposed to be reduced from 5% to 1%.

Sectoral Budget Allocation

Sector Allocation
Human resources sector 28.5%
Agriculture sector 22%
Power and energy sector 13%
Communication sector 25.4%
Other sectors 11.1%

Strategies and action plan

Healthcare sector
 Allocated Tk 10,000 crore to fulfil the emergency requirements to combat the
Covid-19 pandemic and implementing different programs worth Tk. 5,500 crore
under the Health Services Division.
