Following widespread criticism from commercial bankers, trade chambers, macroeconomists, and retail consumers, the government is prepared to walk back its ambitious proposal to make Taxpayer Identification Numbers (TINs) mandatory for opening new bank accounts in the upcoming FY27 national budget.
Independent sources confirm that the final, enacted budget will remove this compliance hurdle to prevent retail depositors from fleeing the formal banking industry.
While the broader fiscal architecture, expenditure ceilings, and national revenue targets will remain unchanged, several other high-friction provisions are slated for adjustment.
These include the import tariff matrix on raw cashew nuts, withholding tax rates on media advertising fees, and selective customs duty structures.
The final legal adjustments will be codified via the passage of the Finance Bill on June 29, followed by the formal enactment of the state budget by parliamentary voice vote on June 30.
The original budget blueprint sought to enforce a blanket requirement making a TIN certificate mandatory for opening any commercial bank account, offering narrow carve-outs only for students, specialized Tk10 marginal accounts, social safety net beneficiaries, and pensioners.
However, revenue planners quickly recognized a structural flaw in the enforcement loop: under existing statutes, obtaining a TIN automatically triggers a mandatory obligation to file an annual income tax return.
This requirement created immediate anxiety among low-income and non-taxable earners, who feared the bureaucratic complexities of tax filing.
Fearing that this compliance anxiety would drive retail savers away from formal financial channels and trigger widespread cash hoarding within the informal economy, the National Board of Revenue (NBR) prioritized the policy rollback.
Data from the central bank underscores the massive scale of the retail banking base that would have been exposed to this regulatory friction.
Bangladesh's banking network encompasses 19.32 crore total accounts, driven heavily by 17.80 crore retail savings accounts and supported by 1.52 crore active loan accounts.
Enforcing a mandatory TIN requirement across this base would have directly undermined a decade of financial inclusion gains, particularly within rural and semi-urban communities.
Commercial banking executives noted that a significant segment of rural and marginal savers completely lack tax identification profiles.
Forcing these demographics into the tax system prematurely would have driven capital away from regulated commercial banks and into high-risk informal cooperatives or unbanked cash holdings.
Tariff revisions
Beyond the banking industry, the final budget is set to deliver critical adjustments to protect local manufacturing margins and corporate service providers:
- Raw Cashew Nut Restructuring: The proposed budget had slapped a 15% customs duty alongside a 15% VAT on raw, unshelled cashew nut imports, pushing the cumulative tax burden to nearly 40%. Local processors objected, pointing out that domestic cultivation satisfies only a fraction of factory demand. The final budget will pivot toward lowering raw material duties while raising protective tariffs on fully processed foreign imports.
- Advertising Source Tax Relief: Marketing and media agencies are set to receive operational relief. The initial proposal sought to raise the withholding tax on printing and electronic media agency bills from a marginal 0.65% up to a flat 4.00%. Following intense lobbying from media owners, the NBR is adjusting the source tax to a more sustainable level.
While independent macroeconomists agree that revoking the bank TIN mandate is necessary to protect the financial sector from liquidity panics, they emphasize that it leaves the government's primary fiscal challenge unresolved: expanding one of the lowest tax-to-GDP ratios in South Asia.
Public finance specialists from Research and Policy Integration for Development (Rapid) and Policy Exchange Bangladesh emphasize that revenue expansion cannot be achieved by placing arbitrary compliance pressures on transparent bank depositors.
Instead, long-term revenue growth requires the state to systematically formalize the unmapped retail trading industry and digitize large-scale commercial supply chains to eliminate corporate tax evasion at the source.
