1.) Tax Rate:
a.) Minimum Tax Rate
It is proposed to decrease the business turnover tax rate for individual taxpayers from 0.5%
to 0.25%.
b.) Reduction of tax rates of the company
- The publicly traded company tax rate is proposed to be reduced from 25% to 22.5%.
- It is proposed to reduce the tax rate of non-publicly traded companies from 32.5% to 30%
- The tax rate on artificial entities and taxable entities other than companies and associations has been fixed @ 30%.
- It is proposed that a 15% tax be imposed on the income of private universities, medical colleges, and engineering colleges.
- It has been proposed that the tax rates of mobile financial service providers be similar to those of listed banks and insurance companies.
c.) One Person Company (and PC) tax rate
- The tax rate of the one-person company (OPC) is proposed to be 25%.
d.) Taxpayer of Third gender
- It has been proposed that the tax-free limit for third-gender taxpayers be increased to TK 350,000.
- Suppose a taxpayer employs 10% of the total workforce of the organization or more than 100 employees from the third gender as the hiring authority. In that case. In that case, the taxpayer will be given the following tax relief:
- 5% of tax payable or ;
- 75% of the total salary paid to third-gender employees is whichever less is.
e.) Tax rate of Individuals
Individual taxpayers’ income tax rates and tax rates remain unchanged as of 2020-2021.
Existing Tax Step | Existing Tax rate |
Up to Tk. 3 Lac. | 0 |
On next Tk. 1 Lac. | 5% |
On next Tk. 3 Lac | 10% |
The next Tk. 4 lac | 15% |
The next Tk. 5 lac | 20% |
The rest of the money | 25% |
f.) Surcharge rationalization
- It has been proposed in 5 steps instead of the existing 7.
- The provision of paying surcharges on assets in case of non-income has been canceled.
- The abolition of the minimum search charge has been proposed.
g.) Rationalization of fishery income tax rate
- Instead of the existing three steps, four steps have been proposed
- It is proposed that a 15% tax be levied on the remaining income of TK. 30 lacs instead of 10% on the remaining income after Tk 20 lacs.
Existing Provision | Proposed Provision | ||
Amount of income | Tax Rate | Amount of income | Tax Rate |
On income up to the first Tk 10 lac. | 0 | On income up to the first Tk 10 lac. | 0 |
On income up to the next Tk 10 lac. | 5% | On income up to the next Tk 10 lac | 5% |
On the remaining income | 10% | On income up to the next Tk 10 lac | 10% |
On the remaining income | 15% |
2. Deduction at Source
a.) Rationalization of the source tax rate at the import stage
The source tax rate at the import stage has been proposed as follows:
- 2% on Cement industry raw materials instead of the existing 3%.
- 1% on Ocean liners instead of the existing 2%.
- 5% on all types of cash registrar results, propellers instead of zero.
- 3% on Coconut fiber instead of the existing 5%.
- All types of alcohol and perfumes 20% instead of 5%.
b.) Reduction of tax rate source at the supply stage
- It is proposed that the tax rate on cement, iron, and iron products be reduced from 3% to 2%.
- The following three steps have been proposed instead of the existing four steps of tax rate against supply.
Rank | Existing provisions | Proposed provisions | ||
1. | Base value | Rate | Based on value | Rate |
Upto Tk. 15 lacs | 2% | Upto Tk. 50 lacs | 3% | |
2. | Between Tk. 15 lacs – Tk. 50 lacs | 3% | Between Tk. Fifty lacs – Tk. 2 crore. | 5% |
3. | Between Tk. 50 lacs- 1 core | 4% | More than Tk. 2 crore | 7% |
4. | More than Tk. 1 crore | 5% |
c.) Reduction of common source tax rates
- If a resident contractor provides any service in Bangladesh to a non-resident contractor, it is proposed that the rate of withholding tax be decreased from 10% to 7.5%.
- It has been proposed that income tax should not be deducted at the source when paying workers up to TK 25,000 as a workers’ participation fund or workers’ participatory fund.
d.) Rationalization of tax rates at general sources
- In case of the sale or lease of any commodity property or rights through a public auction, it is proposed to collect advance tax at source at the rate of 10% instead of the existing 5% from the auction buyer.
- Under the Overseas Employment and Immigration Act 2013, it has been proposed that TK 50,000 be collected at the source of renewal.
- It has been proposed that a provision for deduction at source while paying bills be added as opposed to receiving electricity supply from all types of power-generating companies instead of only renting.
e.) Decrease in advance tax on old vessels
For those vessels that have passed ten years, the advance tax per passenger has been increased from Tk.125 to Tk 100.
3.) Expansion of tax base
a.) It is proposed that the obligation to accept TIN be imposed in the following fields.
- Purchase of savings certificates above Tk 2 lacs.
- Postal savings deposit above Tk 2 lacs.
- Home design approval.
- Registration of Cooperative Societies.
b.) It is proposed that e-commerce platforms be empowered as a source of tax-deductible authority.
4.) Payment of Automated Invoice Tax
Payment of taxes up to TK 5 Lac through an automated platform.
5.) Bangladesh Digital Transformation
In addition to the existing 22 sectors in the digital transformation of Bangladesh, the following six more sectors have been declared tax-free sectors.
a.) Cloud Service
b.) System Integration
c.) e-learning platform
d.) e-book publications
e.) Mobile applications development service and
f.) IT Freelancing
6. Incentive to ‘Made in Bangladesh’ in mega industrial production
To take Bangladesh ahead in the mega-industry, an automobile (three-wheelers and four-wheelers) manufacturing company was established with an investment of at least Tk. 100 crore or more shall enjoy a 20-year tax exemption.
7. Incentives for Made in Bangladesh in the production of Home Appliances
Washing machines, blenders, microwaveIndustrializationsewing machines, induction cookers, kitchen hoods, and kitchen knives & kitchen appliances industry will enjoIndustrializationx exemption.
Industrialization of agricultural products
i.) Such value addition of agricultural products produced in Bangladesh throIndustrializationtion are:
a.) Fruit processing
b.) Vegetable processing
c.) Production of dairy and dairy products, and
d.) Baby food producers.
The entrepreneur has been given ten years of tax exemption
ii.) Entrepreneurs manufacturing agricultural machinery have been given tax exemption for a period of 10 years.
9.) National skills developIndustrializationnt incentives
Institutions engaged in providing education and training in the following sectors to create skilled human resources suitable for industrialization shall enjoy tax exemption for a period of 10 years.
- Diploma Degree and Vocational Education in all fields of Agricultural Fisheries Science and IT and
- Automobiles, Aircraft, Food Preservation Foot over, Glass Mining Mechanical, Shipbuilding, Leather, Refrigeration, Ceramics, Mechanist, Garments, professional training in Design, and Pattern Making, PharmacyLightsing, Integrated Medical, Radiology & Imaging Ultrasound, Dental, Animal Health & Production Services, Lighting & Garment Finishing, Poultry Farming.
1Lightight engineering entrepreneurial creation and employment incentives
Which are all kinds of products in the Lightweight engineering industry are:
i.)Will be used only in industrial factories and
ii.)There will be no complete instrument parts.
Manufacturing entrepreneurs have been given ten years of tax exemption.
11. Entrepreneurial creation and employment incentives in the IT hardware sector
In the IT sector, Bangladesh is dependent on imports for self-sufficiency in creating industries and enterprises and as an incentive for employment. CCTV and pen drive manufacturers have been given tax exemptions for ten years.
12. Ensuring affordable and decentralized medical care
Income from hospital operation has been proposed to enjoy tax exemption for ten years provided that-
- The hospital must be located outside Dhaka, Narayanganj, Gazipur, and Chittagong districts and
- There should be at least a 250-bed hospital or 200-bed specialized hospital.
13. Incentives for Women Entrepreneurs
If the annual turnover of an SME sector owned by a woman entrepreneur is up to TK 70 lacs, the income of that company is exempted from income tax.
14. Assistance in creating a bond market for long-term capital collection
In order to create a market for easy circulation of Sukuk bonds for long-term capital mobilization, it is proposed that the applicable tax be waived in case of a re-transfer of property from the trust or SPV to the parent company.
15. Reduction of depreciation rate for building & structure
Existing rates | Recommended rate | |
General building | 10% | 5% |
Factory building | 20% | 10% |
16. Formalization of the economy
i.) The following expenses are proposed to be required to be paid through bank transfer as well as mobile financial services or MFS.
a.)Salary allowances in excess of Tk 15,000
b.)Any amount of rent and
c.)If the amount of expenditure of any other nature exceeds TK.50 000
ii.) It is proposed that an additional 50% of the existing source tax rate be deducted if the supply and contracting bill is not received through banking or mobile financial services (MFS).
17. Assistance in micro-credit collection
In order to provide easy access to microcredit, it is proposed that the Micro Credit Regulatory Authority exempt the income of organization licenses.
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