The Bangladeshi government is preparing to raise the minimum tax on company turnover from 0.6% to 1% in the upcoming budget. The minimum rate may also rise from 0.25% to 1% for individual taxpayers.
These changes are reportedly driven by pressure from the International Monetary Fund (IMF) to boost tax revenue, amid concerns over underreporting of income by businesses.
NBR data shows that around 24,000 companies are subject to the 0.60% minimum tax rate, excluding roughly 200. However, only about one-third, or 8,000, of these companies actually pay the minimum tax. This indicates that the proposed tax increase will mainly affect these 8,000 compliant businesses.
Currently, the minimum tax on corporate and personal turnover brings in around BDT 2,500 crore. The NBR expects the proposed tax increase to yield an extra BDT 3,500 crore in revenue.
