Next budget to see cuts in tax waiver

Staff Reporter :

The National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan has announced that the upcoming national budget for the 2025-26 fiscal year will see significant reductions in tax exemptions.

Speaking at a pre-budget meeting at the NBR Conference Room, attended by representatives from BEZA, BIDA, BERC, Business Initiative Leading Development (BUILD), Bangladesh Hi-Tech Park Authority, Bangladesh India Chambers of Commerce, Women Entrepreneurs Network for Development Association (WEND), and the American Chamber of Commerce in Bangladesh (AmCham), Rahman Khan emphasized the need for a streamlined tax system.

“This time, you will see some big examples. Already, we have withdrawn a significant number of tax exemptions, and you will see the rest in the next budget,” said the NBR Chairman.

He further clarified that individuals and businesses currently paying a reduced tax rate will have to contribute slightly more from the next fiscal year.

“We can provide support for a limited time, but this cannot continue indefinitely. One should pay taxes at the regular rate,” he stated.

Rahman Khan cited research indicating that the tax revenue collected by the government is roughly equal to the amount lost through tax exemptions. “We have to get rid of this system. There is enormous pressure to reduce tax exemptions,” he added, stressing that the withdrawal will be gradual.

The NBR Chairman also vowed to take action against tax evaders and those not paying Value Added Tax (VAT) properly.

“Consumers do not always benefit directly from tax exemptions. Instead, a significant portion of these exemptions remains with businesses. There are widespread complaints about this, and it should not continue,” he remarked.

Since its independence, the Bangladesh government has introduced a series of tax exemption measures to attract both local and foreign investment, promote industrialization, and foster economic growth. These exemptions have primarily benefited businesses in key sectors such as agriculture, information technology, renewable energy, and export-oriented industries.

Startups and small and medium enterprises (SMEs) have also received tax relief to encourage entrepreneurship and job creation.
Notably, targeted tax benefits have been introduced to stimulate growth in priority sectors, easing financial pressure on businesses and encouraging long-term investment. Businesses in designated economic zones and hi-tech parks have been enjoying tax holidays of up to 10 years based on their investment size and industry type. Similarly, export-oriented businesses have benefited from reduced corporate tax rates to enhance Bangladesh’s competitiveness in global markets.
Despite the intended economic benefits, experts and policymakers have raised concerns about the negative impact of tax exemptions on revenue collection and economic equity. Critics argue that generous tax exemptions have led to significant revenue losses, limiting the government’s ability to fund essential public services such as education, healthcare, and infrastructure.