NBR places a host of fiscal proposals before PM tomorrow

A slew of fiscal proposals for the forthcoming budget are being placed before the Prime Minister tomorrow (Thursday.
The proposals are likely to include introduction of wealth tax and bringing informal sectors onto the tax net through specific taxation.
The revenue authority may also propose doubling the tax on export cash incentives to 20 per cent in the upcoming fiscal year.
All three wings of the National Board of Revenue (NBR) -- income tax, customs and VAT -- are scheduled to present their respective proposals for the fiscal year (FY) 2026-27.

The NBR also plans several business-friendly simplification measures aimed at expediting VAT registration without hassles. From the upcoming fiscal year, all businesses will be required to obtain mandatory online VAT registration.
Newly VAT-registered businesses may enjoy a facility allowing payment of VAT at a specific concessional amount.
The tax-free income threshold for FY2026-27 and FY2027-28 is likely to remain unchanged at Tk 375,000, as set in the current fiscal year's budget, to ensure policy predictability.
Talking to The Financial Express, a senior NBR official said the wrap-up meeting on tax-related budget proposals is being held earlier this year due to the Eid vacation beginning on May 25.
"The policy wings of the NBR will place the tax-related proposals for the Prime Minister's approval on Thursday," the official says.
Officials say several innovative fiscal measures are being considered for the next fiscal year, with a focus on expanding the tax base by bringing the informal sector under taxation.
However, the tax authority is expected to avoid harsh measures that could adversely affect low- and fixed-income groups.
A proposed Wealth Tax Act 2026 may introduce different slabs for individuals holding assets worth Tk 40 million and above. Wealth tax for affluent individuals with assets exceeding Tk 50 million could be set at 1.0 per cent.
The government may also exempt bank depositors from excise duty on balances of up to Tk 0.5 million.
Distinguished Fellow at the Centre for Policy Dialogue Prof Mustafizur Rahman suggests that the upcoming budget should focus on expanding the tax base and plugging revenue leakages through fiscal measures.
He also recommends gradually phasing out tax exemptions in line with the current economic realities, particularly amid persistent inflationary pressure.
"The government must ensure proper deposit of taxpayers' money into the public exchequer, as the taxes we pay and the amount the government receives are not always the same," he says.
In the medium term, the economist adds, the NBR must accelerate automation and reduce human interaction in the tax-collection process.
For the upcoming fiscal year, the NBR has been tasked with collecting Tk 6.04 trillion in taxes, implying a 21.04-percent growth over the current year's original target.
The VAT wing is projected to contribute 51.3 per cent of the total NBR target for next year.
The government aims to collect Tk 3.10 trillion from VAT in FY2026-27, followed by Tk 2.22 trillion from income tax and Tk 670 billion from the customs wing.
Revenue officials have said the government may be able to frame the budget without adopting aggressive tax measures to rapidly raise the tax-to-GDP ratio, as it could not reach a consensus with the International Monetary Fund on conditions to increase the ratio from the existing 6.9 per cent to 9.21 per cent within the next fiscal year.
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