On 30 June 2020, national budget of Tk. 5680 billion for the fiscal year 2020-2021 has been passed in national Parliament and the National Board of Revenue (NBR) has published the Finance Act 2020 with effect from 1 July 2020.

The Key tax measures are summarized as follows:

  • The corporate income tax rate for non-publicly traded companies, including associations of persons, is reduced from 35.0% to 32.5%;
  • A 2.5% surcharge is introduced on all types of tobacco-manufacturing companies;
  • The allowed deduction of promotional expenses is reduced from 1.25% to 0.50% of declared business turnover.
  • The allowed deduction of overseas travel expenditure is reduced from 1.25% to 0.50% of declared business turnover.
  • It is provided that tax must be withheld at a rate of 10% on fees, service charges, commissions, or remunerations remitted from abroad for providing any service rendered in Bangladesh; rendering any service by a resident person in favor of a foreign person; or allowing the use of any online platform for advertisement or any other purposes.
  • Minimum tax rate provisions are amended as follows:
Minimum tax appliesMinimum tax rates
Tobacco products manufacturing1.0% of the gross receipts
Mobile phone operators2.0% of the gross receipts
Individuals with gross receipts of BDT 30 million or more0.5% of the gross receipts
Manufacturing of goods for the first 3 years0.1% of the gross receipts
Any other cases0.6% of the gross receipts
  • The tax-free income threshold for female taxpayers and taxpayers above 65 years of age is BDT 350,000. The individual income tax thresholds as follows:
Total IncomeTax rate
On first Tk. 3,00,000Nil
On next Tk. 1,00,0005%
On next Tk. 3,00,00010%
On next Tk. 4,00,00015%
On next Tk. 5,00,00020%
On the balance of total income25%