Published: 09:29 AM, 05 June 2026
Proposals for National Budget: From Revenue Collection to Inclusive Well-Being
Dr. Muhammad Mahboob Ali
Increasing the tax-free threshold to Tk 5 lakh (primary earners with dependents) and lowering it to Tk 4 lakh (childless singles) costs Tk 1,200 crore a year, but is offset by lower safety net leakage, lower means-testing costs and higher demand. Double taxation on families with >1 vehicle (10% surcharge on second vehicle) earns Tk 800 crore a year in student/low income worker transport subsidies. Stipends linked to biometric attendance (85% monthly attendance) to curb ghost student abuse. Tax free infrastructure bonds Differentiate forex reserve requirements (speculative v/s trade) Deepen liquidity Net gain: 0.8% pt increase in tax/GDP ratio in 3 years, without tax rate increases. Reduced stunting, increased enrollment, lower health costs, increased employment. Employment tax rebate: Enterprises (SMEs, clusters, startups) increasing net workforce by =10% (minimum 5 new permanent hires) get 5% payroll cost rebate, capped at Tk 25 lakh.Kajar Binomy Karmasuchi: Tk 400/day (20% above rural wage) for 100 days (road maintenance, pond digging, school construction, afforestation) using 500,000 landless/unemployed youth for rural infrastructure with Tk 5,000 crore from penalty/wealth tax collections.Youth Startup Corridor: Tk 1,000 crore revolving fund, collateral-free loans up to Tk 10 lakh (age 22-35, logistics, food processing, IT services, renewable energy), 12-month repayment holiday.
Job bonus for export-linked sectors: Tk 5 lakh cash incentive for every 100 added jobs in RMG, leather, jute, IT freelancing, verified by Dept. of Labour.Apartment Owners’ Societies (Extortion Crackdown) All societies in RAJUK areas to register with RAJUK AND RJSC (Registrar of Joint Stock Companies) within six months-constitution, elected members, audited financials, bank details. Failure, illegal, frozen accounts. No monthly charge or fine >Tk 7500/flat without RAJUK approval. Illegal construction = New construction of garage, store or common area without permission of RAJUK. RAJUK has to act within 15 days (demolish, recover cost from committee personally). Illegal fee collectors personally liable for refund +15% penal interest. Blocking utilities or threats for non-payment Charged under Prevention of Oppression of Citizens Act (6 months minimum imprisonment, Tk 2 lakh fine; second offence non-bailable). Chairperson/secretary of any society convicted of extortion: Tk 1 lakh personal fine (non-compoundable); and disqualified from holding any office in any society for ten years; if physical threat or withholding of essential services, add 6 months non-suspend able imprisonment. RAJUK Grievance Cell per zone - Binding orders within 15 days; Officials failing to act face disciplinary proceedings and salary deduction. Societies found guilty, bank balance to be forfeited to building maintenance fund. Benefit: 15 lakh middle-income people got rid of illegal collections of Tk 2,000-3,000 crore every year. RAJUK should carry out regular inspections and set up a dedicated grievance cell to monitor and punish the illegal activities of the apartment societies including extortion from flat owners.
New Special Provision for Seizure of Illicit Exactions: Any govt official, RAJUK officer, police, tax official or private person found taking bribe/speed money/extortion. Conviction = full amount seized + triple penalty. Special Court for Extortion and Bribery Bribe Recovery Warrant can attach bank accounts, fds, property without waiting for appeal. Extortion in apartment associations, trade licenses, land registration, import-export: amount seized to Victim Compensation Fund, refunding identifiable victim within 90 days Voluntary informant on a bribe (with evidence) is granted immunity +20% reward from the amount seized. Estimated annual seizure: Tk 500–1,000 crore (first two years); deterrent effect saves economy Tk 5,000–8,000 crore in compliance costs. Unlicensed Construction: Housing cooperatives erecting garages/storage/commercial units without permits-penalty Tk 5 lakh per violation jointly on cooperative committee and RAJUK approving authority. RAJUK should be proactive in inspection, ex parte demolition, prosecution of repeat violators. Revenue: Tk 300-500cr first two years.
Real Estate Delivery Accountability Law: Every sales contract must have a definite date of possession. Delay over 365 days: developer pays 2% per month liquidated damages of total apartment price (cannot be waived: contrary clauses void ab initio). Delay >2 years in marketing new projects, or no separate escrow account: criminal breach of trust (Penal Code Sec. 406)—up to 3 years imprisonment + Tk 10 lakh fine per buyer affected. Public Delinquent Developers Database; 3+ unresolved delays of more than 1 year each: RAJUK license suspended for 5 years, directors barred from forming new real estate companies for a decade. Projects >10 units need bank guarantee 20% of project cost to be paid to buyers for delay >1year. Delay >18 months: buyer can cancel, get full refund +12% interest compounded monthly within 60 days; failure results in automatic property attachment without court order. Some 50,000-80,000 families stuck with Tk 15,000-20,000 crore advances. The law will release Tk 5,000-7,000 crore household liquidity and reduce litigation by 60 per cent. Informal sector = 35-40% of GDP. Informal Enterprises & Agro-Businesses – Presumptive Taxation Scheme: Any firm/agro-entity (wholesale traders, rice mills, cold storages, poultry, livestock, fisheries, fruit/veg aggregators, light manufacturers) with annual turnover >Tk 50 lakh must register (one-page form), pay 3% presumptive tax on gross turnover (instead of standard corporate rate), file single annual return. Benefits: formal bank credit, VAT-free input purchases (feed, fertilizer, seeds, packaging), protection from harassment. First two years: 50% late registration penalty waiver. Adds 200,000-300,000 new enterprises to tax net, earns Tk 4,000-6,000 crore.
High-Informal-Income MAT: >Tk 5 lakh/month (Tk 60 lakh/annum) earnings from informal sources (unregistered trading, commission business, real estate flipping, agro-commodity speculation, private coaching) to be subjected to Minimum Alternate Tax at 15% of gross income, payable quarterly. NBR employs AI-based data mining (bank transactions >Tk 10 lakh/month, commercial electricity bills, vehicle registrations) Informal High-Income Cell issues notices; 100% penalty for understatement of more than 30%. Estimated 50,000-80,000 such people, produce Tk 600-1,000 crore annually.Cash payments and referral commissions help highly paid specialists (surgeons, cardiologists, radiologists, gastroenterologists) to evade taxes. NBR healthcare drive: Each FCPS/MD/MS physician to file separate private practice income schedule Diagnostic centers/pharmacies report referral payments electronically by TIN on a quarterly basis. Discrepancy >Tk 5 lakh = intentional evasion. Evasion >Tk 10 lakh/year: 200% penalty +15% annual interest + public naming in NBR Tax Defaulters in Healthcare list. Revenue 15,000-20,000 specialists underpaying avg Tk 8 lakh each ? Tk 1,200-1,600 crore annually. To be allocated for public hospitals and 50,000 new nursing/paramedic jobs.
An AI-driven customs system flags invoices by more than 25%. First Offence 300% penalty of evaded duty / rebate + confiscation. Second offense within 5 years: 500% penalty + importer-exporter registration suspended for 3 years. Under Money Laundering Prevention Act, MD and CFO charged with evasion >Tk 5 crore (minimum 2 years non-bailable imprisonment + Tk 50 lakh personal fine) Customs Evaders List is published quarterly. Tk 8,000-10,000 crore lost due to under-invoicing only Tk 3,000-5,000 crore recovered in two years through enforcement.
Capital flight $10-40 billion/year via hundi, under-invoicing, foreign real estate. Truth and Reconciliation Commission on Undeclared Wealth (South Africa model): six-month window (Jan-June 2027) for voluntary full disclosure of all hidden assets (domestic real estate, foreign bank deposits, gold, securities, crypto) — immunity from past prosecution, no penalty, no naming, pay 12% levy (vs. 10% outside) into National Social Protection Fund. Commission: retired SC judge (Chair), ex-NBR head, civil society rep, economist, forensic accountant—subpoena powers. Public hearings (individuals’ names redacted, corporate names not) No future amnesty – non-disclosers later found face 300-500% penalties after window. Black money Tk 50,000-80,000 crore. 40% participation Tk 2,000-3,800 crore immediate revenue. Capital to remain domestic.
Ali (2025) Model on Microbanking: Three pillars: (1) Decentralized hubs at union level (Bangladesh Bank, district cooperative banks, local e-commerce entrepreneurs): zero-minimum savings at 4% subsidized interest, collateral-free microloans up to Tk 5 lakh at 9% flat interest (vs. MFI 20–25%), digital disbursement 48 hrs via bKash/Nagad/Rocket. (2) Employment-linked lending: loan subject to 15-day vocational module (poultry, mobile repair, tailoring, solar panel installation); Tk 1,500 fee added to principal but waived if borrower creates =1 additional job within 18 months. (3) Cluster risk pooling: village/ward joint liability groups (10-20 persons) contribute 1% of the loan to an insurance fund that repays the principal if the borrower dies or becomes permanently disabled. Pilot in 250 unions First Year 125,000 Jobs Tk. 10,000/Job Tk. 1,250 crore to 250,000 Borrowers (Avg Tk. 50,000) Gender mandate: >60% loans to women.
Cluster-based presumptive tax: any group of =20 similar small enterprises (poultry, livestock fattening, vegetable cooperatives, light engineering) registers collectively with NBR, files a single cluster return, pays 2% turnover tax (vs. standard 4%) Benefits: formal bank credit, VAT free animal feed/seeds, 50% tax rebate if jointly fund village facility (vaccine cold chain, wholesale market shed). New revenue: Tk 2,500-3,000 crore One-time Tk 2 lakh employment grant for each registered cluster to hire two young workers (18-30) from landless families. International gateway companies with idle but billable capacity >30% of license allowance for 3 consecutive months: 15% digital service penalty surcharge, mandatory publication of monthly utilization, revocation of no-fault waivers. Digital Employment Fund training 50,000 youth in fiber optic installation, network maintenance, cybersecurity, annually estimated Tk 400–700 crore.
Joint Fiscal-Monetary-Employment Compact: Ministry of Finance sets aside =40% of new penalty/wealth tax revenues for direct social transfers and employment programs; Bangladesh Bank absorbs excess liquidity through open market operations to prevent inflation. Fiscal social spending Tk 1 + stable prices + cheap credit = Tk 1.60 real welfare/employment gain.
Stop funding Dhaka School of Economics (Tk 3–4 crore/year) from FY 2026-27 and redirect to HEAT. Wastage of funding Dhaka School of economics from the payment of tax payer is not acceptable to the public. To accelerate research and comply with global standards, the existing 15% VAT and 20–22% bank and other charges on article processing fees should be withdrawn to encourage researchers to publish in SCOPUS/WoS/Cabells/Ulrich-indexed journals.HEAT Program (Higher Education Acceleration & Transformation): performance-based funding for UGC-accredited programs 35%?80%, double Scopus/Web of Science output, cut student-faculty ratio 45:1?25:1, increase graduate employability 40%?65%.
APC VAT exemption: Eliminate 15% VAT and heavy bank charges on article processing fees for journal articles in SCOPUS, ABDC, Web of Science, CABEL’s journals; limit bank charges to 2%. International collaboration makes up for the revenue loss of Tk 2-3 crore a year.To NBR, Ministry of Finance, Ministry of Labor, Ministry of Education, UGC, RAJUK, RJSC, Bangladesh Bank, proposed Real Estate Regulatory Authority, Truth Commission, Not only raise revenues, but visibly reallocate to social welfare and employment. Kajar Binomy Karmasuchi (500,000 jobs) youth startup corridor export-linked bonuses employment tax rebates. Student transport subsidy with double tax multiple car ownership. Stipends for biometric attendance. Mandatory registration of apartment owners’ societies with RAJUK and RJSC RAJUK action against illegal garages / unauthorized charges Special Provision for Bribe Recovery Warrant & Victim Compensation Fund for Bribery Seizures Include informal firms and agro business in presumptive taxation. Impose MAT on informal high-income earners (>Tk 5 lakh/month). Criminalize extorting social benefits with personal fines/imprisonment. Make RAJUK plan violations jointly liable. Implement Real Estate Delivery Accountability Law (2% monthly damages, criminal sanctions, bank guarantees, buyer rescission) 2. Investigate penalties 200 percent for doctors. 300-500% penalties on trade invoice fiddling. One-off whitening window (10-12% levy) and Truth Commission. Adopt Ali Model for Micro banking. 3. Net result: A fiscal system that collects revenue and actively builds inclusive well-being, with employment as the central pillar linking every tax incentive, penalty and expenditure to the dignity of work. Expand Khal Khanna program (practical excavation/earthworks/rural infrastructure skills) Tk 50 crore ? Tk 150 crore Extend 100 ? all 495 upazilas in 3 years Add literacy/numeracy/digital literacy Formal certification by Bangladesh Technical Education Board. Tk 10,000 trains one youth who earns Tk 25,000-40,000 a year. A loan allocation would have to be made to create employment for foreign-going youth,” the Prime Minister said. While focused, targeted growth of GDP is important, the most important priority is to control inflation. Chittagong Port and Mongla Port should be under the management of armed forces for just in time (JIT) operation and proper enforcement of Tariffs. Cumilla airport needs special allocation for its operationalization. In the health sector, a clear health insurance guideline must prioritize health services at the grassroots level, ensuring no out-of-pocket expenses for the people.
Dr. Muhammad Mahboob Ali
teaches Economics at Bangladesh University of Business and
Technology (BUBT), Dhaka.
