Finance Minister AHM Mustafa Kamal on Thursday unveiled a Tk7,61,785 crore proposed national budget for the 2023–24 fiscal year in the national parliament, with the focus on controlling growing inflation, creating employment and building a “Smart Bangladesh”.
The size of the budget is 12.34% bigger than that allocated for the outgoing fiscal year. In FY23, a Tk6,78,064 budget was placed in the House.
The latest budget is the country’s 52nd and the ruling Awami League’s 24th altogether as yet.
Let’s have a look at the previous national budgets of the country.
Tajuddin’s three budgets to reconstruct a worn-torn Bangladesh: The base of a socialist society
Going by the country’s budget history, then prime minister Tajuddin Ahmad announced a short-range budget during the war, when the country’s founding father, Bangabandhu Sheikh Mujibur Rahman, was in jail. This budget was presented to meet the essential expenses for the Liberation War.
Tajuddin Ahmad presented three budgets after Bangladesh officially gained independence. He had three main budget philosophies – economic recovery, reconstruction and laying the foundations of a socialist society. In the 1972-73 financial year, he presented a budget of Tk786 crore, which figure jumped to Tk995 crore and Tk1,084 crore in the next two fiscal years.
In the budget speech of the 1973-74 fiscal year, the finance minister talked about adopting schemes and policies to make good use of domestic resources by reducing foreign dependence. Tajuddin Ahmad simultaneously talked about increasing exports and developing import alternatives.
AR Mallick’s only budget increased the limit of private capital investment. The budget during the country’s transition period was focused on development activities. Mallick presented a budget of Tk1,549 crore in the 1975-76 fiscal year. In this budget, the upper limit of private capital investment was raised from Tk25 lakh to Tk3 crore.
The budgets under Zia: Income tax limit hike, whitening black money and new pay scale
Military ruler and President Ziaur Rahman also took the helm of the finance ministry and three budgets were presented during his tenure.
He presented a budget of Tk1,989 crore in the 1976-77 fiscal year, Tk2,184 crore in 1977-78 and Tk2,499 crore in the 1978-79 fiscal year.
In his first budget, the minimum income tax limit for individual taxpayers was raised from Tk8,400 to Tk10,000. His second budget paved the way for a whitening of “black money” without penalty. And his third budget announced the implementation of new pay scales.
Mirza Nurul Huda eyes ‘direct tax’
Mirza Nurul Huda presented only a budget (of Tk3,317 crore) and it was in the fiscal year 1979-80. The budget was the first to be placed in the House after three years. The budget laid emphasis on direct taxation.
M Saifur Rahman’s first two budgets: Mandatory return filing, import development surcharge
M Saifur Rahman presented the most number of budgets in the history of Bangladesh. Filing of returns was made mandatory in his first two budgets. Those whose income was more than Tk20,000 were asked to file returns on time; otherwise, they were subjected to a penalty. In Saifur Rahman’s second budget, the duty on computers was halved to 50% and a development surcharge of 1% was imposed on all imports. He presented a budget of Tk4,108 crore in the 1980-81 fiscal year and Tk4,677 crore in the next.
First two budgets of Muhith under General Ershad
Abul Maal Abdul Muhith presented the first budget in the secretariat of military ruler General HM Ershad. In this budget, the tax-free income limit was increased to Tk20,000. At the same time, a dearness allowance was announced for public servants. In the 1982-83 fiscal year, he presented a budget of Tk4,738 crore and in the following fiscal year, the amount soared to Tk5,896 crore. For the first time during Muhit’s second budget, imported goods were divided into three categories for taxation.
Syeduzzaman’s four budgets
During M Syeduzzaman’s time, tax exemptions were announced for new industries to increase investment; a new income tax law was also announced too. At the same time, the opportunity to whiten “black money” was given for the second time. But in doing so, a 20% tax was made mandatory. M Syeduzzaman presented a budget of Tk6,699 crore in the 1984-85 fiscal year, Tk7,138 crore in the 1985-86 fiscal year and Tk8,504 crore in the 1986-87 fiscal year.
Budgets of General Munim and Wahidul Haque
Bank management, debt management and government officials were brought under income tax for the first time during this period. Major General MA Munim presented two budgets and Wahidul Haque placed one. Munim presented a budget of Tk10,565 crore in the 1988-89 fiscal year and Tk12,960 crore in the 1990-91 financial year. Wahidul presented a budget of Tk12,703 crore in the 1989-90 fiscal year. The distribution of taxpayers’ numbers on a national basis began during the time of Major Munim.
Five more budgets of Saifur Rahman
M Saifur Rahman took charge of the Ministry of Finance for a second time. During his tenure, he presented five more budgets. For the first time in five years, VAT (value-added tax), liberal trade policies and sustainable economic growth were in focus. A flexible exchange rate policy was adopted. All surcharges and levies imposed for the Jamuna Bridge were withdrawn. He presented the budget of Tk15,584 crore in the 1991-92 fiscal year, Tk17,607 crore in 1992-93, Tk19,050 crore in 1993-94, Tk20,948 crore in 1994-95 and Tk23,170 in the 1995-96 fiscal year. VAT was introduced from July 1, 1991 when he was the finance minister.
Kibria’s six budgets
Shah AMS Kibria presented six budgets. Bangladesh achieved 7% growth for the first time during that period. At the same time, poverty alleviation targets were set at the national level. Social security programs and old-age allowances were introduced. A golden opportunity was created to whiten “black money” by investing in the stock market and industrial sector, as well as buying luxury cars. Kibria presented the budget of Tk24,603 crores in the financial year 1996-97, Tk27,786 crore in 1997-98, Tk29,537 crore in 1998-99, Tk34,252 crore in 1999-00, Tk38,524 crore in 2000-01 and Tk42,306 crore in the fiscal year 2001-02.
M Saifur Rahman’s ‘third innings’
Saifur Rahman was appointed finance minister for the third time, presenting five budgets again. He announced extensive economic reforms. The issue of black money laundering is again given importance. At the same time, submission of returns is made mandatory in case of election candidates or participating in government tenders. The range of VAT collection was increased in the budget and the tax-free income limit spiked to Tk1.5 lakh. Infrastructure development surcharge of 4% was abolished. Saifur Rahman presented the budget of Tk44,854 crore in the 2002-03 fiscal year, Tk51,980 crore in 2003-04, Tk57,248 crore in 2004-05, Tk61,058 crore in 2005-06 and Tk69,740 crore in the 2006-07 fiscal year.
Two budgets during the 1/11 changeover
In 2007, the military took power under the cover of the caretaker government in the country’s extraordinary situation, ruling the country for about two years. Two budgets were placed during the period.
The VAT net was widened and the tax-free income limit was increased to Tk1.5 lakh. The infrastructure development surcharge of 4% was revoked. Changes were brought to the tariff structure to preserve local industries, a new system of tax holidays was adopted and corporate tax rates were cut. In the 2007-08 financial year AB Mirza Azizul Islam presented a budget of Tk99,962 crore for the 200708 and the 2008-09 fiscal years each.
Muhith’s second era: The economy of Digital Bangladesh
The Bangladesh Awami League returned to power in 2008. At the time, comprehensive structural and infrastructural development plans were adopted. The country was moving towards a Digital Bangladesh. Abul Maal Abdul Muhith presented 10 consecutive budgets.
The opportunity to legalize undisclosed income by taxing at 10%, Public-Private Partnership (PPP), taxation on savings certificate interest, 2% surcharge on mobile phone bills, tax-free income limit increase to Tk220,000, tax holiday benefits increase by two years, 30% tax if income is more than Tk44.2 lakh, paying house rentof over Tk25,000 through banks, imposing 1% apparel source tax and mandatory surcharge for two cars and house-property of 8,000 sqft are the key measures that came through the budgets.
Muhith presented the budget of Tk1,13,815 crore in the financial year 2009-10, Tk1,32,170 crore in 2010-11, Tk1,61,214 crore in 2011-12, Tk1,91,738 crore in 2012-13, Tk2,22,491 crore in 2013-14, Tk2,50,560 crore in 2014-15, Tk2,95,100 crore in 2015-16, Tk3,40,605 crore in 2016-17, Tk4,00,266 crore in 2017-18 and Tk4,64,573 crore in the financial year 2018-19.
AHM Mustafa Kamal: Towards smart economy
Before the latest one, Finance Minister AHM Mustafa Kamal presented four budgets in the last four years. Over the period, the world had to bear the brunt of economic instability, war, and the Covid-19 pandemic.
However, Bangladesh managed to keep the momentum in its economy going despite facing multiple challenges.
To strengthen the economy of the country, the budget presented by him includes incentives for young entrepreneurs, incentives for expatriate income, emergency healthcare sector, abolition of the minimum surcharge system and unlimited opportunities to white black and laundered money.
The country is now heading towards a “Smart Bangladesh.”
The finance minister placed the last budget of his tenure with the next general election expected in seven months.
The budget has been placed at a time when the entire world is still in the clutches of an economic recession and is facing the aftermath of the pandemic.
Also, it comes as the country faces growing inflation and the challenge of foreign currency reserves.
Mustafa Kamal presented the last budget of his tenure on Thursday. This is the largest budget in the country’s history. This budget is being delivered at a time when economies around the world are reeling from war-weary and pandemic ravages. Beyond controlling inflation, there are the challenges of election years and the challenge of holding foreign exchange reserves.
Source: Dhaka Tribune.