Tk 1bn startup fund, tax reliefs planned to boost ICT and green tech in FY26 budget

A Tk 1 billion startup fund and a set of tax reliefs for the ICT sector, blue economy research, and green technology have been proposed in the budget for the upcoming 2025–26 fiscal year to promote innovation and entrepreneurship.

Finance Advisor Salehuddin Ahmed outlined the initiatives on Monday during a nationally televised address.

SUPPORT FOR ENTREPRENEURS

To support new technology-based ventures and young entrepreneurs, the interim government has proposed a Tk 1 billion fund.

The initiative aims to offer capital assistance and business training opportunities to promising startups, said Salehuddin.

BLUE ECONOMY

To tap into the potential of marine resources, the budget proposes Tk 2 billion for research into the blue economy.

The focus will be on innovation across ocean resource management, environmental protection, and energy.

CLIMATE-LINKED MEDIA, TECH INITIATIVES

Another Tk 1 billion is proposed under the Bangladesh Climate Change Trust Fund (BCCTF) to support technology-based climate initiatives.

Part of the fund will be used to boost media capacity for climate-sensitive reporting and information delivery.

TAX BREAKS FOR DIGITAL GROWTH

The budget includes several changes aimed at making ICT services more affordable.

Source tax on internet services is proposed to be halved, from 10 percent to 5 percent.

The turnover tax on mobile operators would drop from 2 percent to 1.5 percent.

A VAT exemption is also proposed for business purchases of computer monitors up to 30 inches, potentially lowering hardware costs.

VAT HIKE

A value added tax (VAT) increase from 5 percent to 15 percent has been proposed on sales commission for online platforms.

This may put added financial pressure on digital marketplaces.

GREEN TECHNOLOGY

The government is also looking to incentivise eco-friendly industries. VAT on domestic e-bike production is proposed to be waived by 5 percent, while lithium and graphene battery manufacturing would see full VAT exemption until 2027 and a 5 percent rate thereafter.

Import duties on key parts for refrigerators, freezers, air conditioners and compressors are also proposed to be fully waived until 2028.

The proposed FY26 budget will go before parliament for approval on 30 June, with the new fiscal year beginning on 1 July.

The proposed FY26 budget is scheduled for approval on Jun 30, with the new financial year beginning on Jul 1.