Budget Highlights 2006-2007
Accelerate economic growth by further streamlining the strong macroeconomic framework that is in place through continuous reforms and create  employment opportunities

elevate Human Development Index (HDI) with the increased allocation in education, health and other social sectors along with qualitative improvement;

Ensure financial security of the disadvantaged by widening social safety nets;  promote private sector initiatives and investment by adopting prudent fiscal and monetary policy;

Reduce the cost of doing business by developing physical infrastructure;

Ensure economic good governance, improve law and order, maintain internal security and enhance public management capacity

Budget deficit in the proposed budget has been scaled down to 3.7 percent of GDP

56.3 percent of total resources have been directed towards direct and indirect poverty-reducing spending.

Trade, commerce and investment will remain buoyant and the growth will reach in the neighbourhood of 7 percent.

Due to reforms in monetary sector, the price inflation is expected to come down below 6 percent.

The target of revenue receipt for FY 2006-07 is estimated at Tk. 52542 crore which is 11.3 percent of the GDP.

This estimate is 17 percent higher than the revised revenue estimate for FY 2005-06.

Out of this, the non-development outlay has been estimated at Tk. 42286 crore which is 14 percent higher than the revised budget.

The total developmental expenditure in the next fiscal year will stand at Tk. 28463 crore which is 6.1 percent of GDP.

This proposed developmental expenditure will be 21 percent higher than that of the revised budget.

22 percent of the total budget for expansion and qualitative improvement of health and education.

In FY 2006-07, allocation for human resource development has been proposed to raise to 23 percent of the total budget.

6-year “Second Primary Education Development Programme” (SPEDP) has been launched at a total cost of approximately Tk. 5000 crore

A stipend programme at a cost of Tk. 3312 crore is being implemented

The female-male teacher ratio has been raised to 44 percent

To bring the primary school dropouts and out-of-school children to the mainstream, a project titled Reaching Out of School Children (ROSC) is under implementation

An additional allocation of Tk. 45 crore to enhance primary teachers’ emoluments.

Under “Female Stipend Programme” and “Food for Education Programme”, government is providing stipends, examination fees and tuition fees to about 25 lakhs female students.

In FY 2006-07, the proposal is to increase the allocation to Taka 52 crore by increasing the total number of scholarships to 101000.

Suitable trade courses have been introduced for women.

Three Polytechnic Institutes only for the women are in process of establishment

To meet the increasing demand, establishment of a Science and Technological University in each of the twelve old districts is underway

Government declared Information & Communication Technology (ICT) as the thrust sector considering its importance for the socio-economic development of the country

E-governance has been introduced in various ministries and divisions to facilitate easier on-line service to public.

The proposal is to allocate a total of Tk 11093 crore in FY 2006-07 which is 20 percent higher than the allocation made in the revised budget

The total estimated outlay of “Strategic Investment Plan for Health, Nutrition and Population,” a  proposal titled “Health, Nutrition and Population Programme” 7-year programme (2003-2010) is about 32450 crore.

Currently, in 105 upazilas, 2 crore 90 lakh people have been brought under a nutritional service programme through 23000 social nutrition centres

In FY 2006-07, the proposed allocation Tk 4784 crore (development and non-development together)for this sector, which is 16 percent higher than the allocation made in the revised budget

Proposal is made to allocate for the next  fiscal year a total of Tk. 749 crore, non-development and development together.

In FY 2006-07 too, the proposal is made to allocate Tk 1200 crore for agricultural subsidy and rehabilitation and also allocate Tk 244 crore for agricultural research

In FY 2006-07, the target of agricultural credit distribution is Tk. 6000 crore

In FY 2006-07, the proposal is to allocate Tk 3149 crore, non-development and development together, for the Ministry of Agriculture, which is 42 percent higher than the allocation of revised budget for FY 2005-06

The proposal is to allocate for the FY2006-07 a total of Tk. 1466 crore, development and non-development combined, for the Ministry of Water Resources

The proposal is to allocate for the FY2006-07 a combined development and non-development allocation of Tk. 578 crore in the next fiscal year for the Ministry of Fisheries and Livestock.

The proposal is allocate for FY 2006-07, a total of Tk 242 crore for the Ministry of Environment and Forest.
The proposal is made to enhance the allocation to Tk 200 crore in FY 2006-07 for Equity Development Fund
In FY 2006-07, The proposal is made to allocate of Tk 150 crore to Agro-based Industries Assistance Programme
Proposal is made to create a fund called “Fund for Assistance to Small Farmers Affected by Natural Disasters” and to allocate Tk. 50 crore to this Fund in FY 2006-07
In FY 2006-07, the proposal is to allocate Tk. 6427 crore (development and non-development combined) for local government and rural development
In FY 2006-07, the proposal is to enhance the rate of “Senior Citizen Allowance” allowance to Tk. 200 and raise the number of beneficiaries to 16 lakh
In FY 2006-07, the proposal is to fix the rate of allowance for the destitute, widowed women at Tk.200 and increase the number of beneficiaries to 6 lakh 50 thousa
Till 2005-06, the beneficiary coverage under the Honorarium Programme for Insolvent Freedom Fighters was enhanced to 70 thousand. the proposal is to increase the number of beneficiaries from 70 thousand to 1 lakh in FY 2006-07
In current fiscal year, under the Programme for the Assistance to the Fully Retarded about 1 lakh 4 thousand fully retarded persons are receiving monthly allowance of Tk. 200 against an allocation of Tk. 25 crore. The proposal is to raise the beneficiary coverage by another 60 thousand and increase the allocation to a total of Tk. 40 crore.
A “Seasonal Unemployment Reduction Fund” of Tk 50 crore was created under non-development budget in FY 2005-06 to mitigate the seasonal unemployment of the unprivileged poor people in some specific areas caused by natural and geographical constraints (specially in Monga prone areas). The proposal is to make a further allocation of Tk 55 crore to this Fund
In FY 2006-07, the proposal is made to allocate an additional Tk.30 crore to the fund for “Retraining and Employment of Voluntarily Retired/Retrenched Employees/ Labourers” introduced in FY 2004-05
In FY 2006-07, the proposal is to allocate Tk. 20 crore to create Skill Development Fund for the Readymade Garments Workers.
In FY 2006-07, the proposal is  to allocate Tk.50 crore to the “Fund for Housing the Homeless” to address the housing problems of the homeless, the poor and the low income group, particularly the rural families.
In FY 2006-07, 10 lakh 57 thousand metric tons of food grains have been earmarked for Rural Infrastructure Maintenance Programme (TR), Food for Works Programme (FFW), Gratuitous Relief (GR), VGF and VGD. Like previous year, I propose to allocate in lump Tk.100 crore to the Ministry of Food and Disaster Management to meet the emergencies due to natural disasters.
Most of the beneficiaries are women. The proposal is made to allocate Tk 217 crore in FY 2006-07 for Palli Karma Shahayak Foundation (PKSF).
In addition, in FY 2006-07, the proposal to raise the allocation to Tk. 267 crore by injecting Tk. 100 crore in  “ Special Fund for the Employment of the Hardcore Poor” administered by PKSF.
To provide Credit Assistance to Small Entrepreneurs in rural areas, the proposal is to increase the allocation in FY 2006-07 to Tk. 150 crore by a further allocation of Tk 100.
The proposal is to allocate an additional Tk. 25 crore in FY 2006-07 to raise  the Endowment Fund to Tk. 125 crore for the NGO Foundation created to accelerate the progress of social sector in rural areas.
A Power Rehabilitation Programme with an outlay of Tk.100 crore financed from non-development budget has been undertaken for repair and maintenance of old power plants. The proposal is amde to allocate Tk 100 crore again for this Programme in FY 2006-07 from non-development budget.
To improve power generation, transmission and distribution, an allocation of Tk. 3586 crore has been earmarked for 52 projects including 2 new projects in the ADP during FY 2006-07.
The proposal is to create an Energy Development Fund to promote use of solar power and other renewable sources of energy for inaccessible localities where people are deprived of power supply. I propose to allocate Tk. 100 crore for this Fund in FY 2006-07
In FY 2006-07, the proposal is to allocate Tk. 4286 crore for this sector, revenue and development expenditure combined, which is 14 percent higher than the revised budget of the current fiscal year.
It is expected, by FY 2008-09, the construction of the Padma Bridge will begin.
In FY 2005-06, the allocation for the Ministry of Communication is Tk. 4832 crore, development and non-development combined. the proposal is to allocate Tk 5357crore, development and non-development together, for the Ministry of Communication in FY 2006-07
In FY 2006-07, the total proposed allocation for the Ministry of Post and Telecommunication is Tk.1574
A Monitoring Cell and the Cabinet Committee on law and order are working to deal with the criminals heavy-handedly. The proposal is to allocate, both development and non-development, to Tk 3378 crore
The proposal is made to keep the ceiling of tax-exempt income, income slabs and the tax rates at the same level for the income year 2007-08 as is the case for the assessment year 2006-07 for the individual assesses.
The proposal has made to propose 10% tax rebates on the additional tax paid by those individual tax payers paying taxes at the highest rate of 25% disclosing more than 10% higher income in the assessment year 2007-08.
Besides, it is also proposed to keep the tax rates unchanged for the companies at the same level of assessment year 2006-07.
With a view to developing agro-processing, jute and textile industries benefit of tax exemption and rebate was allowed up-to 30th June, 2006. This year budget proposes these benefits be extended till 30th June, 2008.
Diamond cutting and polishing is emerging as a promising export industry in Bangladesh. This year budget proposes a reduced tax rate of 15% for this industry to encourage the investors.
Some additions and amendments in the Income Tax Ordinance, 1984.
(1) To raise the admissible expenditure by way of perquisite for companies from taka 1 lakh 92 thousand to taka 2 lakh and to exclude incentive bonus, employers contribution to provident fund, pension fund, gratuity fund, and super-annuation fund from the definition of perquisite.
(2) To allow accelerated depreciation at the rate of 50%, 30%, and 20% respectively in first three years of installation of machinery instead of allowing 100% depreciation in the very first year of their installation.
(3) To raise the annual tax-exemption limit of conveyance allowance paid in cash from Tk. 12 thousand to Tk. 18 thousand for computing income of the salaried persons.
(4) To treat the expenditure by way of salary or allowance as inadmissible if it is not paid by bank cheque or bank transfer to the employees whose monthly salary or allowance is Tk. 15 thousand or more.
(5)  To treat the investment made by the directors of private and non-listed companies as income of the company when such investment is not made by bank cheque or bank transfer
(6)  To make it mandatory for the income tax practitioner to be a member of any registered Taxes Bar Association for working as an authorised person
(7)  To raise the amount of allowable investment for the purpose of tax rebates from Tk. 2 lakh to Tk. 2 lakh 50 thousand irrespective of share purchase of a company
(8)  In case of submission of tax return on self-assessment basis, the requirement to disclose in the first year of business an income of at least 15% of the amount shown as initial capital to be raised to 25%.
(9) To withdraw the tax exemption benefit on remittance from abroad for resident persons who are not citizens of Bangladesh
(10) To re-fix the tax rate under Section 19B of the Income Tax Ordinance, 1984 to Tk. 300/- per square metre for a plinth area up to 200 square metre and Tk. 500/- for a plinth area over 200 square metre in case of purchase or construction of building and apartment in Gulshan, Banani, Baridhara, Bashundhara, Dhanmondi, DOHS etc. of Dhaka and Panchlaish, Khulshi of Chittagong and to keep the prevailing tax rates unchanged for other areas
(11)  To re-fix the tax rate for purchase of land under Section 19BB of the Income Tax Ordinance, 1984 by enhancing the rate from 5% to 7.5% and make this benefit available all over the country. Also to re-fix the tax rates for purchase of motorcar under Section 19BBB raising the rates of 5% and 7.5% to 10% and 15% respectively
(12)  Government gives export cash subsidy on export of various items with a view to encouraging the export business. I propose to deduct tax at source at the rate of 5% on the amount of cash subsidy for it being a net receipt to the exporter and treat the deduction as final settlement of tax liability
(13) To deduct tax at the rate of 5% on the receipts of non-resident courier companies and treat it as final settlement of tax liability
(14) To collect advance income tax at the rate of 3% on the bills paid by the user of credit cards
(15) To introduce the provision of minimum income tax of Tk. 5,000/- or 0.50% of turnover whichever is higher for companies irrespective of profit or loss