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In a major policy shift aimed at mitigating fiscal strain on micro, small, and medium enterprises, the National Board of Revenue (NBR) is moving to grant full exemption from the minimum turnover tax for businesses and corporate entities with an annual turnover of up to Tk 2 crore. Alongside this blanket waiver, the revenue authority has designed a progressive, slab-based tax framework to replace the existing flat taxation mechanism that currently forces businesses to pay turnover tax regardless of whether they incur profits or losses.
According to NBR officials, the draft policy proposes a tiered tax structure: enterprises generating annual turnover exceeding Tk 2 crore up to Tk 3 crore will be subject to a reduced rate of 0.25 percent, while those with turnover between Tk 3 crore and Tk 4 crore will incur a 0.50 percent levy. Entities recording annual sales above Tk 4 crore will continue paying the standard 1.0 percent minimum turnover tax. A senior NBR official confirmed that Finance Minister Amir Khosru Mahmud Chowdhury has formally approved the proposal's summary, which has now been forwarded to the Ministry of Law, Justice and Parliamentary Affairs for legal vetting before its official gazette notification.
The reform seeks to alleviate the operational bottlenecks faced by low-margin and small enterprises burdened by last year's budget measure that universally enforced a 1 percent minimum tax on gross turnover. Highlighting the distortions of the current regime, industry data compiled by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) demonstrated that a business with Tk 50 lakh in annual revenue and a modest 5 percent profit margin (earning Tk 2.5 lakh in net income) is compelled to remit Tk 50,000 as turnover tax. Similarly, an enterprise generating Tk 1 crore in gross revenue with Tk 5 lakh in net profit pays Tk 1 lakh in turnover tax, far surpassing the baseline corporate income tax liability of Tk 10,000.
Welcoming the move, VAT Consultants Association of Bangladesh President Hasanul Islam Tipu noted that easing the tax burden provides crucial breathing room for emerging small businesses facing post-recession headwinds. However, FBCCI Administrator Md. Fazlul Hoque and Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed advocated for the complete abolition of turnover-based taxation, asserting that taxation must strictly mirror actual net income. Chartered accountant Snehasish Barua observed that while the tiered slabs bring tangible relief to small traders, larger corporations navigating operational losses or slender margins will remain burdened by the 1 percent flat charge. Simultaneously, some tax policy analysts raised concerns that the full exemption threshold might incentivize under-reporting of sales figures by businesses seeking to stay under the Tk 2 crore ceiling.
https://thedailyexpress.news/news/business/1f1a4f93-07cc-6010-a770-8fbc83cb3470