The NBR has drafted an order to lower the corporate income tax rate for textile mills from 27.5% to 15%, with the reduced rate to stay in force until 30 June 2030.
Bangladesh’s National Board of Revenue (NBR) has proposed cutting the income tax rate for the textile sector from 27.5% to 15%, with approval from Finance Minister Amir Khosru Mahmud Chowdhury.
The NBR drafted a statutory regulatory order (SRO) and sent it to the minister on 5 November. A senior finance official said the SRO would be issued soon after approval.
The board recommended the lower rate under Section 76(1) of the Income Tax Act. It said the move would protect exports and jobs and support the sustainable growth of the industry. The sector covers yarn production, yarn dyeing, finishing, coning, fabric dyeing, printing and related activities.
The NBR had imposed a 15% rate on these companies for 10 years through an SRO in 2015. The order expired in 2025, and the rate returned to 27.5%.
In May, the Bangladesh Textile Mills Association proposed a 10% rate until 2030. It noted that the export-oriented ready-made garment sector pays 12%. The NBR did not consider the proposal before preparing the current fiscal year’s budget.
In its proposal, the NBR listed the main challenges facing textile mills: rising gas and electricity prices, energy shortages, high interest rates, reduced export incentives and competitive pressure following Bangladesh’s graduation from the least developed country category. It added that subsidised yarn and fabric imports from neighbouring countries put local mills at a disadvantage. The ministry later suspended the order after objections from readymade garment manufacturers.
