The proposed budget for the 2026–27 fiscal year has introduced a significant adjustment to the excise duty structure on bank deposits, raising the tax-free threshold on account balances. Under the new proposal, individuals maintaining deposits of up to Tk 400,000 in their bank accounts will no longer be subject to excise duty, compared with the existing exemption limit of Tk 300,000. The revision is expected to ease the financial burden on small and medium savers while encouraging greater participation in the formal banking system.
According to the current framework, bank account holders are exempt from excise duty if their total deposits do not exceed Tk 300,000. Once this threshold is crossed, excise duty is levied annually at a prescribed rate, depending on the balance maintained. The newly proposed adjustment increases the exemption limit by Tk 100,000, marking a policy shift aimed at supporting lower and middle-income depositors amid rising living costs and inflationary pressures.
During the presentation of the national budget in parliament, the Finance Minister Amir Khasru Mahmud Chowdhury stated that the revision has been designed specifically to provide relief to small savers. He further highlighted a procedural reform under the new system: previously, excise duty could be applied separately to multiple deposit accounts held by the same individual. Under the revised arrangement, the duty will be assessed only once per taxpayer, regardless of the number of accounts, thereby simplifying administrative procedures and reducing compliance complexity.
Economists have broadly interpreted the measure as a pro-savings initiative. They argue that increasing the exemption threshold could incentivise individuals with modest incomes to retain more funds within the banking sector rather than holding cash informally. While the change is not expected to substantially affect overall government revenue, it may contribute to strengthening confidence in the financial system and improving deposit mobilisation.
At the macroeconomic level, the proposed budget outlines total expenditure of Tk 938,000 crore against projected revenue of Tk 695,000 crore, resulting in a fiscal deficit of Tk 243,000 crore. The government plans to finance this gap through a combination of domestic borrowing and external financing sources.
Analysts also note that although the revision is relatively modest in fiscal terms, it aligns with broader efforts to deepen financial inclusion and enhance banking sector stability. By reducing the tax burden on smaller deposits, authorities anticipate a gradual increase in savings inflows, which could support liquidity in the banking system and contribute positively to long-term economic resilience.
Revised Excise Duty Structure
| Category | Current Rule | Proposed Rule |
|---|---|---|
| Tax-free deposit limit | Tk 300,000 | Tk 400,000 |
| Duty application | Charged once annually after crossing limit | Charged once annually after crossing limit |
| Multiple accounts treatment | Separate charges per account | Single consolidated charge per taxpayer |
Overall, the reform is positioned as a targeted measure to support small savers while streamlining tax administration in the banking sector.