FY27 budget must prioritise credibility over ambition: CPD
It noted that inflation remains stubbornly above 8%, tax collection is expected to miss its annual target by a wide margin, and development spending has fallen to a 15-year low.
The Centre for Policy Dialogue (CPD) has urged the government to fix core economic fundamentals before making new promises ahead of the upcoming national budget.
In its written statement at a pre-budget meeting in Dhaka today (28 April), the think tank said the FY2027 budget must prioritise credibility over ambition.
It noted that inflation remains stubbornly above 8%, tax collection is expected to miss its annual target by a wide margin, and development spending has fallen to a 15-year low.
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"Monetary and fiscal policy should prioritise curbing high inflationary pressure while supporting economic recovery," said Tamim Ahmed, senior research associate, while presenting the statement.
He further said that the design and fiscal targets of the upcoming fiscal year should be set in a realistic manner, taking into account the current macroeconomic situation.
Highlighting the need to prepare for post-LDC graduation, he called for rationalisation of tariffs and para-tariffs, alignment of applied tariff rates with WTO-bound commitments, gradual phasing out of direct subsidies, and strengthening capacity to deal with anti-dumping and countervailing cases from both offensive and defensive perspectives.
CPD also submitted 11 recommendations prioritising government action, including avoiding large-scale electricity generation-based projects, increasing climate-related budget allocation, and developing a single, interoperable national farmer registry linked to a smart farmer card.
In the same meeting, Md Ahad Al Azad Munem, research associate of the Policy Research Institute (PRI), stressed the need to reduce Bangladesh's heavy reliance on trade taxes to enhance competitiveness and support export diversification.
Presenting recommendations for the FY2026–27 budget, PRI noted that nearly 28% of Bangladesh's total revenue currently comes from trade taxes, significantly higher than the 5–15% typical in peer economies.
It said this overdependence distorts the tax structure and weakens long-term economic efficiency.
The institute proposed gradually reducing reliance on trade taxes to 7.5% by 2035, shifting the burden towards more sustainable domestic sources such as value-added tax (VAT) and income tax.
According to PRI, this transition is essential for building a modern, transparent, and growth-oriented tax system.
