Small and medium-sized enterprises across Bangladesh could soon receive significant fiscal relief as the National Board of Revenue prepares to waive minimum turnover taxes for businesses generating up to two crore taka annually. Under the proposed framework, enterprises falling below this financial threshold will be completely exempt from the mandatory levy, decoupling their tax liabilities from profit and loss fluctuations.
The initiative introduces a tiered tax structure designed to ease compliance pressures on smaller commercial entities. Businesses recording a turnover between two and three crore taka will face a reduced minimum tax rate of 0.25 per cent, while those operating between three and four crore taka will be subject to a 0.50 per cent rate. Enterprises exceeding the four-crore-taka threshold will maintain the existing minimum turnover tax of 1 per cent.
An official summary of the proposal has received approval from Finance Minister Amir Khasru Mahmud Chowdhury and has subsequently been forwarded to the Ministry of Law for rigorous legal vetting. Formal promulgation of these adjustments is anticipated shortly.
Industry leaders and trade associations have responded to the upcoming reforms with a mixture of cautious optimism and strategic critique. Hasanul Islam Tupu, president of the VAT Consultants Association of Bangladesh, welcomed the move as a timely safeguard during a challenging economic climate marked by commercial closures. Conversely, FBCCI administrator Md. Fazlul Haque reiterated that taxation should strictly reflect genuine corporate earnings, arguing for the total abolition of minimum turnover taxes to ensure fairness. Dhaka Chamber president Taskin Ahmed echoed similar sentiments regarding the need to move away from rigid turnover levies. At the same time, chartered accountant Snehasish Barua noted that while the sliding scale offers welcome breathing room for smaller firms, larger enterprises operating on narrow profit margins or facing net losses may still find the adjustments insufficient.
Tax experts have also highlighted potential compliance risks, warning that the two-crore-taka exemption threshold might inadvertently incentivise some commercial operators to underreport gross sales to remain beneath the tax-free ceiling.
Current fiscal friction stems largely from the previous budgetary cycle, which instituted a flat 1 per cent minimum turnover tax regardless of corporate profitability. Industry calculations illustrate the heavy burden this placed on low-margin operators. For instance, a firm recording fifty lakh taka in sales with a 5 per cent net profit yields an income of two lakh fifty thousand taka, yet faced a fifty-thousand-taka minimum tax liability under the flat system. Similarly, a business generating one crore taka in sales with five lakh taka in profit faced a turnover tax of one lakh taka, vastly exceeding standard corporate income tax expectations.
