Webinar on “Changes in Income Tax, VAT and Customs Laws through Finance Ordinance 2025”

The Finance Ordinance 2025 introduces significant reforms to Bangladesh's Income Tax Act 2023, applicable for assessment years 2026-27 and 2027-28. The budget projects a GDP of BDT 62,445 billion with total revenue of BDT 5,640 billion (9% of GDP) and expenditure of BDT 7,900 billion, resulting in a deficit of BDT 2,260 billion. Corporate tax rates have been simplified to a general rate of 27.5%, while listed companies receiving all income through bank transfers qualify for reduced rates of 20-25%. The ordinance eliminates separate tax rates for one-person companies and merchant banks. For individual taxpayers, the tax-free threshold increases to BDT 375,000 for general taxpayers and BDT 425,000 for women and senior citizens, with a new progressive slab structure introduced. Minimum gross receipts tax has been increased from 0.6% to 1% for most businesses, while mobile operators see a reduction from 2% to 1.5%. Investment funds now enjoy exemptions on all income except financial assets, though capital market investments face a 15% capital gains tax. The ordinance introduces significant procedural changes including mandatory online return submission for most taxpayers, simplified tax audit mechanisms under the Deputy Commissioner of Taxes, and allows carry-forward of minimum tax exceeding regular liability. Perhaps most notably, the government proposes dissolving the existing NBR structure and splitting it into two divisions: the Revenue Policy Division (RPD) for policy formulation and the Revenue Management Division (RMD) for implementation and enforcement, aimed at enhancing transparency and governance in tax administration.