Surcharge-Free Net Wealth Threshold May Increase

Only 27.87 lakh out of 90 lakh eligible taxpayers in Bangladesh filed their returns by the November 30 deadline, a mere 8% increase from 2022, highlighting a significant non-compliance. Ongoing political unrest, confusion over the new Income Tax Act, and an anticipated deadline extension are cited as factors contributing to the low submission rate.

The National Board of Revenue (NBR) has exempted businesses from a 20% tax on the interest of foreign loans until February 2024, excluding advance payments. This move is expected to reduce interest costs by 1.5%-2% for businesses. While industry stakeholders welcome the decision, concerns arise about a potential surge in foreign loan payments before the deadline to avoid taxes.

The National Board of Revenue (NBR) has lowered land registration source tax by Tk30,000 per katha in undeveloped areas of Dhaka, Gazipur, Narayanganj, and Chattogram districts. The statutory regulatory order, effective from November 30, 2023, reduces the maximum source tax per katha in specified Dhaka Upazilas to Tk20,000 from Tk50,000.

The National Board of Revenue (NBR) in Bangladesh has demonstrated a sustained reliance on indirect tax collection, constituting 66% of total tax revenue in fiscal year (FY) 2022-23. Despite a modest 5.91% decline from FY10 to FY23, experts raise concerns about the impact on income inequality, emphasizing that indirect taxes disproportionately affect individuals with lower earnings.

During the July-October period of fiscal year 2024, the National Board of Revenue (NBR) achieved a 14.36% year-on-year growth in revenue collection, totaling Tk 1,03,976 crore. The breakdown includes Tk 32,668 crore from customs, Tk 40,048.62 crore from VAT, and Tk 31,259 crore from income tax and travel tax.

The National Board of Revenue (NBR) has extended the deadline for individual taxpayers to submit income tax returns by two months, now set for January 31, 2024, instead of the earlier November 30, 2023 date. This decision follows requests from trade bodies, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), citing challenges faced by taxpayers amid the prevailing political situation and upcoming elections.