NBR Lifts 5% VAT on Bond License Equipment Transfers

Bangladesh's revenue collection declined by 0.98% year-on-year to Tk 156,442 crore in July-December FY25, marking a rare negative growth. The revenue shortfall reached Tk 58,000 crore, with imports dropping from $90 billion in 2021 to $70 billion in 2023, reducing tariff income. Inflation, a sluggish development budget, and slower manufacturing further strained revenue growth.

In the past five months, Bangladesh has faced a revenue deficit of 420 billion Taka, as reported by the Chief Advisor's Press Secretary, Shafiqul Alam. He emphasized the need to increase the tax-to-GDP ratio for the benefit of the general population.

Bangladesh's National Board of Revenue (NBR) has raised value-added tax (VAT) and supplementary duty (SD) on a wide range of goods and services despite concerns about inflation and its impact on economic activities.

The National Board of Revenue (NBR) has doubled the corporate income tax rate to 20 percent for manufacturers of freezers, refrigerators, motorcycles, air conditioners, and compressors, starting from the fiscal year 2025-26. According to a notification issued today, these revised tax rates will be in effect until June 30, 2032.

Bangladesh's National Board of Revenue (NBR) plans to raise VAT rates on 43 goods and services, including dining out, sweets, clothing, and tissue paper, from 5-7.5% to 15%. This move, intended to boost revenue and comply with IMF conditions, also includes significant increases in excise duties on air travel, generating an additional Tk 12,000 crore.

Bangladesh's revenue collection fell in November, reaching Tk 25,360 crore, an 8.95% decline compared to the previous year. This follows a 2.62% year-on-year decrease to Tk 130,185 crore in the July-November period of FY25.