Bank Levy Threshold Raised Budget

The proposed budget for the 2026–27 fiscal year has introduced a notable adjustment to the excise duty structure on bank deposits, increasing the tax-free threshold in a move aimed at easing pressure on small and medium savers. Under the new proposal, depositors maintaining up to four lakh taka in their bank accounts will no longer be subject to excise duty, marking an increase from the existing limit of three lakh taka.

The revision is expected to provide direct relief to a broad segment of account holders, particularly those in lower and middle-income groups who are most sensitive to incremental banking costs. At present, excise duty is levied annually once deposits exceed the prescribed threshold, applying a fixed charge depending on account balances.

During the budget presentation in parliament, the Finance Minister, Amir Khasru Mahmud Chowdhury, stated that the adjustment has been designed specifically to reduce the burden on small savers and encourage greater participation in formal banking channels. He also highlighted a procedural reform in the taxation of loan-linked accounts, noting that previously multiple accounts associated with a single loan were individually subjected to excise duty. Under the revised framework, such linked accounts will now be assessed only once per loan relationship, thereby reducing duplication and administrative complexity.

Economists have largely interpreted the measure as a modest but positive step towards improving financial inclusivity. While it does not alter the tax treatment of high-value depositors, it is expected to simplify compliance procedures and enhance transparency in banking operations. Analysts also suggest that the change could encourage greater household savings by making formal banking slightly more attractive for small depositors.

The overall budget for the 2026–27 fiscal year has been set at 9.38 trillion taka, with a revenue target of 6.95 trillion taka. This leaves a projected deficit of 2.43 trillion taka, which the government plans to finance through a combination of domestic borrowing and external funding sources.

Key Budget Indicators

Policy experts believe that while the fiscal impact of the revised excise duty threshold may be limited in revenue terms, its behavioural impact could be more significant. By lowering the cost of maintaining modest savings in the banking system, the government hopes to deepen financial inclusion, strengthen deposit mobilisation, and reduce reliance on informal savings channels.

Overall, the reform represents a targeted attempt to balance revenue considerations with social equity, offering incremental relief to small savers while maintaining stability in the broader tax framework for larger deposit holders.