Bangladesh passes Finance Bill 2026 with higher tax-free threshold for individuals

The Finance Bill 2026 raises the income tax-free threshold for individual taxpayers over the next five fiscal years, withdraws several proposed tax compliance measures and introduces changes to tax rates, exemptions and import duties.

Bangladesh has passed the Finance Bill 2026, approving a series of revisions to the government’s budget proposals, including a higher income tax-free threshold for individual taxpayers, the withdrawal of several controversial tax provisions and changes affecting education, agriculture and manufacturing sectors.

The bill was passed by voice vote in Parliament after being moved by Finance Minister Amir Khosru Mahmud Chowdhury.

Higher income tax-free threshold

Under the approved Finance Bill, the income tax-free threshold for individual taxpayers will increase over the next five fiscal years as follows:

The revised thresholds are higher than those proposed in the original budget, which had set the exemption limits at BDT 375,000, BDT 400,000 and BDT 450,000 for the corresponding periods.

Investment disclosure proposal withdrawn

Parliament also removed the proposed provision on the disclosure of investments following public criticism.

According to the finance minister, the measure had been intended to address complications arising from land transactions registered at mouza values rather than actual market prices. However, the government decided to withdraw the proposal in response to public opinion.

The government also dropped a proposed provision that would have allowed investments of unaccounted money in the real estate sector without scrutiny of the source of funds.

TIN-related requirements scrapped

Two proposed Taxpayer Identification Number (TIN) requirements have also been removed from the bill. These would have made TIN certificates mandatory for opening most bank accounts and for the registration of partition deeds and property mutations.

Other tax and duty changes

The Finance Bill includes several additional tax measures:

• The income tax rate for private universities has been reduced from 10% to 5%.
• Tax exemptions for indigenous communities in the three hill districts and the plains have been expanded to include salary income, in addition to income from business, agriculture and other economic activities.
• Customs duty, regulatory duty, supplementary duty and VAT on imported shrimp feed, probiotics, vitamins, minerals, other essential inputs and related machinery will be withdrawn to support the shrimp sector.
• The import duty on PVC and PET resin, widely used as industrial raw materials, has been reduced from the proposed 10% to 5%.

Earlier, Bangladesh proposed a 15% capital gains tax on profits from the sale or transfer of gold, silver, jewellery, precious stones, diamonds, coins, digital currencies, artworks, antiques and club memberships under the Finance Bill 2026 presented with the national budget for fiscal year 2026-27.