The finance and planning minister, M Saifur Rahman, is scheduled to place in Jatiya Sangsad (national parliament) today what will be his 12th budget.
  
The proposed budget for the 2006-07 fiscal year looks set to have an electorate-friendly look besides certain measures specially designed to appease multilateral lending agencies.
  
With the government of the BNP-led four-party alliance scheduled to leave office about four months into the new fiscal year, the burden will be on the caretaker government, albeit for a brief period, and the next elected government to implement the budget.
  
The social safety network is set to be expanded while no fresh tax is likely to be imposed on the lower and middle classes.
   
The budget is learnt to have an outlay of Tk 69,740 crore and a revenue target of Tk 53,200 crore, up 17.50 per cent from the revenue receipt for the current fiscal year, which will be revised to Tk 44,750 crore.
  
The facility for whitening black money at the rate of 7.5 per cent tax will be discontinued. The provision for buying apartments, land and vehicles with untaxed and undeclared money will be retained; the tax rate will be increased, sources said.
  
Black money holders will have to pay Tk 350, up from Tk 200 now, in tax for every square metre when purchasing an apartment, the sources said. Also, the rate of tax for an apartment on an area of more than 200 square metres will be increased to Tk 500 from Tk 300 now.
   
As far as purchasing land is concerned, black money holders will have to pay 10 per cent of the total value in tax, up from 5 per cent now, the sources said. Land in city-corporation or municipal areas will come under the black money whitening facility.
  
The ensuing budget is likely to increase the tax for purchasing vehicles with black and untaxed money from 5 to 10 per cent on their purchase value to be applicable up to 1,500cc, the sources said.
  
The existing 7.5 per cent tax on the purchase of vehicles above 1,500cc is likely to be doubled, the sources hinted. The election-year budget proposes a Tk 26,000 crore annual development programme, which is Tk 4,500 crore or 21 per cent more than the revised ADP and Tk 1,500 crore or 6.00 per cent more than the original ADP for FY06.
  
The ADP for FY07 has allocations for 937 development projects, of which only 51 are new and 685 unapproved.
  
Around Tk 850 crore is likely to be earmarked in the budget for the 2006-07 fiscal year for rural farms, small and medium enterprises, agro-based industries and development of solar energy, according to sources in the finance ministry.
  
Interest rates for these sectors will range from 6 to 8 per cent and the money will be disbursed through state-owned banks and the Palli Karma-Sahayak (rural employment support) Foundation, the sources said.
  
In view of an increased demand for energy, the government looks set to channel Tk 100 crore to a renewable energy development fund. An allocation of Tk 125 crore is likely to be made for development of small and medium enterprises in rural areas. The fund will be disbursed among rural entrepreneurs at an interest of 6-8 per cent, it is learnt.
  
There will also be increase in the allocation for the equity entrepreneurship fund, from Tk 150 crore to Tk 200 crore, and micro-credit, from Tk 281 crore to Tk 300 crore, the sources hinted.
  
The amount of farm subsidy is likely to be enhanced and modalities changed in the new budget, the sources said. The allowance for elderly citizens, widowed, deserted and destitute women, insolvent and disabled freedom fighters will be increased. The number of such allowances will also go up.
  
The much-talked-about imposition of tax on non-government organisations, however, will not take place in the new budget, as Saifur had to backtrack on his earlier position under intense pressure from the Prime Minister’s Office, the sources said.
  
Saifur told journalists in early May that tax would be imposed on the micro-credit operation of the NGOs.
  
The new budget will increase tax on subscriber identification module and withdraw import duty on mobile set, the sources said.
  
The import duty on 3,346 items, including a number of essentials, is likely to drop one per cent but on all kinds of vehicles to increase about 10 per cent.
  
The duties are to be reduced mostly on essential commodities such as rice, onion and garlic, and industrial raw materials. The essential items also include dried chilli, cereals, wheat, salts, cashew nuts, fresh fruit, cow, cocoa beans, chocolate, and wool.
  
Besides, animal hair, cotton and yarn, about 50 kinds of chemical elements, metals used in the industry, about 30 kinds of organic chemicals, pharmaceutical raw materials, oils for perfumery, raw materials for soap industry, photographic goods, and polymers for plastic industry are also to get one per cent import duty reduction.
  
The duty slash would benefit local industries and appease multilateral lenders like the World Bank and the International Monetary Fund. The bank asked the government in early 2006 to reduce the existing duty by two percentage points and eliminate the para-tariff barriers.
  
However, the current ceiling of 25 per cent import duty would not be changed, the sources said. With the possible changes in the current import duty rates, the slabs are going to be fixed at 5, 12 and 25 per cent, which are now 6, 13 and 25 per cent.