The Bangladesh government has announced plans to reduce corporate income tax by 2.5% points to promote digital financial transactions today, 6 June, 2024. This tax incentive aims to encourage businesses to comply with a new condition mandating cashless transactions.
Abul Hassan Mahmood Ali, Minister of Finance, proposed reducing the corporate tax rate for non-listed companies from the current 27.5% to 25%. To qualify, however, companies must handle all types of income, receipts, transactions over BDT 500,000, and annual expenses and investments over BDT 3.6 million through bank transfers.
Additionally, listed companies that offload at least 10% of shares in the stock market and comply with the bank transfer requirement can reduce their income tax rate from 22.5% to 20%. Those offloading less than 10% of shares will pay a 25% tax rate but can reduce it to 22.5 percent if they adhere to the bank transfer condition.
“In order to further formalise the economy and encourage the establishment of one-person companies, I propose to make the one-person company tax rate from 22.5 percent to 20 percent, subject to compliance with the same conditions as non-listed companies,” said Abul Hassan Mahmood Ali.
