The government is planning to take several measures to reduce the tax burden on individuals and businesses in the upcoming national budget. These measures include increasing the tax-free income limit and relaxing certain regulations.
According to sources from the Ministry of Finance, the Revenue Division is considering a proposal to raise the tax-free income limit for individuals from 350,000 Taka to 375,000 Taka.
This proposal will be presented to Economic Advisor Dr. Salehuddin Ahmed on May 15. It will then be submitted to Chief Advisor Professor Dr. Muhammad Yunus on May 19 as part of the budget planning for the 2025–26 fiscal year.
The Economic Advisor is expected to announce the budget on June 2.
A senior official from the National Board of Revenue (NBR) stated, “We are considering these initiatives to provide some relief to individuals, as high inflation has been affecting people for the past few years.”
In Bangladesh, inflation has remained above 9% for the past 26 months, negatively impacting real income. According to data from the Bangladesh Bureau of Statistics (BBS), the inflation rate in April stood at 9.17%. In the 2023–24 fiscal year, the government raised the tax-free income limit by 50,000 Taka, from 300,000 to 350,000 Taka.
Economists and business organizations have repeatedly called for a revision of the tax-free income limit considering the ongoing cost-of-living crisis.
In March of this year, the Centre for Policy Dialogue (CPD) recommended increasing the limit by 50,000 Taka. Meanwhile, the FBCCI urged for it to be raised to 450,000 Taka. Other business organizations also argue that the current limit no longer aligns with real economic conditions.
Besides raising the tax-free limit, the government is also considering relaxing the requirement to submit tax returns when purchasing savings certificates.
Currently, if someone buys savings certificates worth more than 500,000 Taka, they must provide proof of the previous year's tax return. The proposal suggests raising this limit to 1,000,000 Taka to benefit lower and middle-income investors.
At present, proof of tax return submission is required for 45 government and private services. The NBR had introduced this requirement to increase tax awareness.
However, under the proposed changes, proof of tax returns may be relaxed when obtaining a business license for the first time, although it would still be required for renewals.
On the other hand, the government is not planning to extend tax holidays or reduced tax rates for businesses in the next budget, in line with conditions of the ongoing $4.7 billion loan agreement with the International Monetary Fund (IMF) aimed at increasing revenue collection.
Revenue officials have stated that tax exemptions will be gradually withdrawn—some will expire at the end of their term, while others will be limited by specific orders.
