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are serious about deregulation to simplify business. You will see this reflected in the upcoming budget.”

Despite deep structural weaknesses inherited by the BNP government, Chowdhury said maintaining macroeconomic stability and financial discipline remains their top priority.

Turning to the country’s battered capital market, which he previously described as having been “looted” by political cronies, the minister promised sweeping interventions to restore investor confidence.

“We have a major programme for the stock market; wait a little, and you will see changes,” said Chowdhury. “The capital market will be fully reformed.”

PRINTING MONEY CLAIMS

The authorities categorically rejected recent media reports claiming that the central bank had printed Tk 20,000 crore for the government.

Bangladesh Bank (BB) Governor Md Mostaqur Rahman dismissed the reports as “completely untrue,” saying that such claims could damage the country’s sovereign rating and raise borrowing costs.

He said fluctuations in the government’s “Ways and Means” advance account are part of routine financial operations.

Chowdhury echoed the governor, saying he was “deeply saddened” by the rumours.

“During our political movement, we repeatedly protested against printing money and the government’s heavy borrowing from banks, which crowded out the private sector,” said the finance minister. “We cannot deviate from our manifesto promises.”

He said that creating “high-powered money” would fuel inflation and squeeze an already undercapitalised private sector. He described fiscal restraint as “one of the foundational principles of the government’s economic policy”.

Bangladesh has been facing inflation of around 9 percent since March 2023, and economists have cautioned that expanding money supply could make it harder to bring prices under control.

The minister blamed the country’s economic difficulties on a legacy of “political patronage” that allowed the state to fall “into the hands of oligarchs”.

He said this system enabled widespread tax avoidance, pushing the tax-to-GDP ratio down from 11 percent to below 7 percent. “The financial sector became so heavily politicised that banks have essentially been emptied, and the stock market was looted,” he said.

He added that the private sector is now “severely undercapitalised”, with currency depreciation and high inflation eroding working capital and contributing to job losses.

Responding to pressure from international lenders to raise revenue quickly, he offered a reality check. “Raising taxes right now is an extremely difficult task. When institutions like the IMF and the World Bank push for a higher tax-to-GDP ratio, you must understand the situation before demanding reforms.”

“We cannot act like dictators and forcefully extract money from those who simply cannot afford to pay,” he said.

Instead, the government is working on restructuring the tax system, which Chowdhury described as “half-baked”. A committee has been formed to separate tax policy from implementation, with the aim of making future policy more representative.

To revive economic growth without adding inflationary pressure, he promised further deregulation to reduce the “cost of doing business”, which he said had been driven up by port delays, customs procedures and road extortion.

Deploying police to inspect markets, he said, would not resolve the problem. “The issue must be fixed in the supply chain,” he said. He also said the government aims to strengthen small and medium-sized enterprises, which is central to job creation. “We need mega-industries, yes, but the SME sector is the true engine of employment.”

BANKING SECTOR AND MONEY LAUNDERING

BB Governor Mostaqur Rahman also gave a stark assessment of the banking sector, saying nearly one-third of deposits are in default. He described many bad loans as “essentially thefts” with little or no collateral.

To claw back capital, the government is stepping up efforts to recover money allegedly smuggled abroad by former business elites.

Nazma Mobarek, secretary of the Financial Institutions Division, said a joint investigation team is working on 11 priority cases, with Mutual Legal Assistance (MLA) requests sent to 23 countries to trace and recover assets.

Domestically, the National Board of Revenue (NBR) is trying to plug a severe revenue shortfall by widening the tax base and increasing digital enforcement rather than raising rates on existing taxpayers.

Noting that corporate tax rates have already fallen from 50 percent in the 1980s to 20 percent today, officials said that further cuts would not resolve chronic tax evasion.

“If we reduce it further, the tendency of tax evasion remains a challenge; we will consider how to address this gap,” NBR Chairman Md Abdur Rahman Khan said. “Expanding the tax base is highly relevant. Currently, our VAT base is very small. We are planning how to expand it and ease compliance.”

He added that online tax filing would become mandatory from next year. “The system automatically identifies non-filers,” he said. “We will pursue them and expect substantial tax collection.”

Senior journalists, including Channel i’s Head of News Shykh Seraj and The Financial Express Editor Shamsul Huq Zahid, attended the second budget discussion.

At the earlier session, ERF President Doulot Akter Mala and General Secretary Abul Kashem spoke.