Bangladesh is the land of river. Bangladeshi fight for their Mother Language. The war of 1971 gives them the freedom. Bangladesh art & culture, business, tourism, transportation and news. Any Bangladeshi thing can be find here.
In 2025, Bangladesh confronted persistent inflationary
pressures, significantly impacting household budgets. To alleviate this burden,
the government implemented a zero Value Added Tax (VAT) policy on essential
goods within supermarkets. This initiative aimed to directly reduce consumer
costs amidst a challenging economic landscape characterized by fluctuating
global commodity prices and domestic supply chain vulnerabilities.
The primary driver for the VAT
exemption was the sustained high inflation, particularly in food items. Data
from the Bangladesh Bank indicated that while overall inflation showed marginal
decreases, food inflation remained a significant concern. Contributing factors
included global supply chain disruptions, the depreciation of the taka, and
inherent challenges within the domestic agricultural sector. The government's decision
to eliminate VAT on essentials in supermarkets was a direct response to these
pressures, intending to provide immediate financial relief to urban consumers.
Market monitoring teams were deployed to ensure retailers passed on the
savings, a critical component for the policy's success.
The market's reaction to the VAT
exemption was complex. Retailers faced the challenge of balancing reduced VAT
with rising import and operational costs. The Ramadan season, typically marked
by increased consumer demand, further complicated the situation. While the
policy intended to stabilize prices during this period, market dynamics often
led to fluctuations. Monitoring efforts aimed to prevent price manipulation and
ensure transparency, but the sheer volume of transactions and market
complexities posed significant challenges. Consumer behavior reflected the
economic strain, with increased price sensitivity and cautious purchasing
patterns.
The 2025 zero-VAT policy in
Bangladeshi supermarkets was a significant attempt to mitigate the impact of
high inflation. Its effectiveness hinged on transparent price transmission,
robust market monitoring, and the overall stability of the broader economy.
While the policy aimed to provide immediate relief, long-term success depended
on addressing the underlying causes of inflation and ensuring sustainable
economic growth. The ongoing evaluation of this policy's impact will be crucial
in shaping future economic strategies in Bangladesh.
After three years of exemption,
the government has proposed imposing VAT on meditation services.
In his budget statement issued,
Finance Minister AHM Mustafa Kamal announced, "I propose to eliminate the
existing VAT exemption on 'Meditation Services."
During his budget presentation
for the current fiscal year (Financial Year 2022), the finance minister, on the
other hand, supported the decision to exempt meditation from VAT, claiming that
it was decided for the benefit of mental health and mind control during the
global pandemic.
7.0 percent VAT on meditation
was originally introduced in Financial Year 2014, however it was later reversed
by then-finance minister AMA Muhith in Financial Year 2015, emphasizing the
role of allowing citizens to heal from diseases and illnesses.
VAT on meditation was
suggested again in the Financial Year 2019 budget presentation, but the finance
minister put it aside for the past two years, revising the same fiscal's
proposed finance law.
In the coming fiscal year, tax
relocation due to investment is expected to decrease for the middle-income
group of people of Bangladesh.
Currently, only a maximum of 25%
can be invested.
For the coming fiscal year, the
Finance Bill-2022 proposes a reduction in the amount of investment that is
eligible for a tax credit to 20%. It also increased the income tax rate as well
as the ranges of qualified investments.
Currently, an individual taxpayer
with a yearly income of up to Tk 1.5 million is eligible for a 15% tax credit
on a qualifying investment amount of up to 25% of total income.
For anyone with an income of up
to Tk 1.5 million, the tax credit ratio would remain constant, whereas those
higher earnings will advantage from the policy.
In the upcoming financial year,
the tax refund rate for individuals with annual incomes over Tk 1.5 million
would be increased from 10% to 15%.
Pushing or Pulling towards the center of the board. Getting some
notice or it’s a threat from China as Chinese Ambassador to Bangladesh Li
Jiming said on Monday that China-Bangladesh bilateral ties would be substantially
damaged if Dhaka engaged with Quad, according to the media report. The
Quadrilateral Security Dialogue (Quad), an informal security grouping of the
US, Japan, Australia and India, are now seeking to seduce Bangladesh to be part
of their Indo-Pacific strategy tie.
As an important partner of China, Bangladesh signed up to the
China-proposed Belt and Road Initiative (BRI) and is a member of the
Bangladesh-China-India-Myanmar Economic Corridor and 21st Century Maritime Silk
Road. One of the crucial aims of both US' and India's Indo-Pacific visions is
to counter the BRI with a bid to contain China's development. Roping in
Bangladesh can help them achieve this goal.
Another Quad member, Japan, is engaged in many areas of
cooperation with Bangladesh as well. For one, Bangladesh's market is appealing
to Japan. Despite its small size, Bangladesh has a population of more than 160
million. For another, out of geopolitical considerations, Tokyo hopes to
counter the BRI. Japan has proposed the Partnership for Quality Infrastructure
and attempted to sign infrastructure deals with Bangladesh. Tokyo, together
with New Delhi and Washington, are really the ones behind the scenes that
instigated Dhaka to call off the Sonadia deep-sea port project that was constructed
by China and turn to cooperate with Japan on another similar program, reported by
the media in 2016.
As a response, Bangladesh Foreign Minister AK Abdul Moment
told local English daily Dhaka Post that, "None of us were invited to the
Quad, nor did we show interest." If what Chinese Ambassador said is the
fact, this will be good. But given that some media outlets, including local
ones, had covered Li's remarks, the news that Bangladesh had been invited to
join the Quad was possibly not be groundless. Bangladesh either had talked with
Quad members over this issue or aim to launch a trial balloon to see China's
reaction.
Bangladesh holds a good balance between major powers. It
actively cooperates with China on economics. At the same time, Dhaka hopes such
cooperation will thus bring more countries to invest in Bangladesh. But it also
hopes a competition over it remains at the economic level instead of at the
political level. Bangladesh raises its value to the regional powers in the Geopolitical
prospective. The strategy should secure the higher economic value from the
international partners as well as stable the position from Underdog to Regional
Power.
