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

  c.)    One Person Company (and PC) tax rate

d.)      Taxpayer of Third gender

  1. 5% of tax payable or ;
  2. 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 in 2020-2021.

Existing Tax StepExisting Tax rate
Up to Tk. 3 Lac.0
On next Tk. 1 Lac.5%
On next Tk. 3 Lac10%
The next Tk. 4 lac15%
The next Tk. 5 lac20%
The rest of the money25%

f.)          Surcharge rationalization

g.)       Rationalization of fishery income tax rate

  Existing Provision  Proposed Provision
  Amount of incomeTax Rate    Amount of incomeTax 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 income15%

2. Deduction at Source

a.) Rationalization of source tax rate at import stage

The source tax rate at the import stage has been proposed as follows:

b.) Reduction of tax rate source at the supply stage

RankExisting provisionsProposed provisions
    1.Base value  RateBased on valueRate
Upto Tk. 15 lacs2%Upto Tk. 50 lacs3%
2.Between Tk. 15 lacs – Tk. 50 lacs3%Between Tk. 50 lacs – Tk. 2 crore.5%
3.Between Tk. 50 lacs- 1 core4%More than Tk. 2 crore7%
4.More than Tk. 1 crore5%  

   c.) Reduction of common source tax rates

d.) Rationalization of tax rates at general sources

   e.)   Decrease in advance tax on old vessels

For those vessels which have passed 10 years the advance tax per passenger has been increased from Tk.125 to Tk 100.

3.) Expansion of tax base

a.)  It is proposed to impose the obligation to accept TIN in the following fields.

b.) It is proposed to empower e-commerce platform as a source tax deductible authority.

4.) Payment of Automated Invoice Tax

Payment of taxes up to TK 5 Lac through automated platform.

5.) Bangladesh Digital Transformation     

In addition to the existing 22 sectors in the digital transformation of Bangladesh, the following 6 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 auto mobile (three wheelers and four wheelers) manufacturing company established with an investment of at least Tk. 100 crore or more shall enjoy 20 year tax exemption.

7. Incentives for Made in Bangladesh in the production of Home Appliances

Washing machines, blenders, microwave ovens, electric sewing machines, induction cookers, kitchen hoods and kitchen knives & kitchen appliances industry will enjoy 10 years tax exemption.

8.) Industrialization of agricultural products

i.) Such as value addition of agricultural products produced in Bangladesh through industrialization are:

a.) Fruit processing

b.) Vegetable processing

c.)  Production of dairy and dairy products and

d.)  Baby food producers.

Entrepreneur has been given 10 years tax exemption

ii.)  Entrepreneurs manufacturing agricultural machinery have been given tax exemption for a period of 10 years.

9.) National skills development and employment 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.

  1. Diploma Degree and Vocational Education in all fields of Agricultural Fisheries Science  and IT and
  2. Automobiles, Aircraft, Food Preservation Foot over, Glass Mining Mechanical, Shipbuilding, Leather, Refrigeration, Ceramics, Mechanist, Garments, provide professional training on Design, and Pattern Making, Pharmacy, Nursing, Integrated Medical, Radiology & Imaging, Ultrasound, Dental, Animal Health & Production Services, Clothing & Garment Finishing, Poultry Farming.

10.) Light engineering entrepreneurial creation and employment incentives

Which are all kinds of products in the light 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 10 years 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 exemption for a period of 10 years.

12. Ensuring affordable and decentralized medical care

 Income from hospital operation has been proposed to enjoy tax exemption for 10 years provided that-

  1. Hospital must be located outside Dhaka, Narayanganj, Gazipur and Chittagong districts and
  2. There should be at least 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 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 to waive the tax applicable in case of re-transfer of property from the trust or SPV to the parent company.

15. Reduction of depreciation rate for building & structure

 Existing ratesRecommended rate
General building10%5%
Factory building20%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 to deduct an additional 50% of the existing source tax rate 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 to exempt income of organization licenses by Micro Credit Regulatory Authority.

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