Income Tax in Bangladesh
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Bangladesh Tax Law
The government of Bangladesh imposes both direct and indirect taxes. Direct taxes include land development tax, immovable property tax, and income tax. Indirect taxes include VAT, advertisement tax, and motor vehicle tax.
The new Income Tax Act of 2023 is the first complete and well-organized income tax law since the Income Tax Ordinance of 1984. It imposed a minimum tax of 2,000 taka for all TIN holders, regardless of their taxable income. However, that decision was later eliminated.
The government also changed the rules for tax credits for investments in Sanchaypatra. The tax rate has also increased moderately. Persons were liable to pay 0% tax while their yearly salary was 0 – 300,000 taka. After the commencement of the new Income Tax Act of 2023, the amount is now 0 – 350,000 taka.
Tax evasion is considered a heinous crime in Bangladesh, and the Income Tax Ordinance of 1984 provides penalties for it.
What is the Minimum Tax?
According to the Finance Act, 2023 and the Income Tax Act, 2023, the standard income tax rates are mentioned below-
up to BDT 350,000 - 0%
over BDT 350,000 up to 450,000 (next BDT 100,000) - 5%
over BDT 450,000 up to 750,000 (next BDT 300,000) - 10%
over BDT 750,000 up to 1,150,000 (next BDT 400,000) - 15%
over BDT 1,150,000 up to 1,650,000 (next BDT 500,000) - 20%
over BDT 1,650,000 - 25%
The minimum tax for persons living in Dhaka City corporation and Chattogram City corporation areas is tk 5000 only if their taxable income exceeds tk 350,000 and 4000 tk for individuals living in other city corporations. For non-city corporation areas, the amount is tk 3000.
The 0% surcharge entrance for wealthy individuals is increased from BDT 30 million to BDT 40 million, resulting as follows-.
up to BDT 40 million - 0%
over BDT 40 million up to 100 million - 10%
over BDT 100 million up to 200 million - 20%
over BDT 200 million up to 500 million - 30%
