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Implement New Income Tax Law Will Shift Focus from Import Taxes

Economic Tag: Vat & Tax

Bangladesh is set to introduce a comprehensive income tax law, replacing the existing Income Tax Ordinance of 1984, after 39 years. The updated direct tax regime aims to reduce the government’s reliance on import taxes, which contribute to the higher cost of imported goods. The new law, titled “The Income Tax Law 2023,” is expected to come into effect from the upcoming fiscal year. The draft has been submitted to the Internal Resources Division for further processing and will undergo vetting before seeking approval from the cabinet and parliament. The move aligns with the conditions accompanying the International Monetary Fund (IMF) loan and demonstrates the government’s commitment to modernizing tax regulations, international standards, and attracting foreign direct investment. Various fiscal measures, such as the imposition of capital gains tax on sales of private company shares and the revision of tax-free limits, are expected to be proposed in the upcoming budget.

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