Welcome

to our
presentation
 Tax system
of the Peoples’ Republic
of
Bangladesh
 OVERVIEW OF TAX SYSTEM IN
BANGLADESH

Income Tax Ordinance (1984) is used as a basic act in Bangladesh.

Business tax and personal income tax is identified as income tax. The tax is
paid based on Income Tax Rules (1984), which stipulates the implication
rules and actual declaration procedures, and SROs from National Board of
Revenue. Tax rate and tax regulation is revised every year and presented
by Finance Acts/Ordinances.
In Bangladesh, the principal taxes are Customs Duties
, Value-Added-Tax (VAT), and personal income taxes and
corporate income taxes.

The history of income tax in this country dates

back to 1860 when it was introduced in this
country by the British rulers under the title
Income Tax Act, 1860. Since then various
changes have taken place.
 VALUE ADDED TAX

The main features of VAT in Bangladesh are:

VAT is imposed on goods and services at import stage, manufacturing,
wholesale and retails levels
A uniform VAT rate of 15 percent is applicable for both goods and
services;
15 percent VAT is applicable for all business or industrial units with an
annual turnover of Taka 2 million and above
 VAT is applicable to all domestic products and services with some
exemptions
VAT is payable at the time of supply of goods and services
Tax paid on inputs is creditable/adjustable against output tax
Export is exempt
Tax returns are to be submitted on monthly or quarterly or half yearly
basis as notified by the government
Supplementary Duty (SD) is imposed at local and import stage under
the VAT Act, 1991.Existing statutory SD rates are as follows:
A. On goods: 20%, 35%, 65%, 100%, 250% 350% & 850%
B. On services: 10%, 15% & 35%.
The National Board of Revenue (NBR) is the central authority for tax
administration in Bangladesh.
Administratively, it is under the Internal Resources Division (IRD) of the
Ministry of Finance (MoF). MoF has 4 Divisions, namely,
 the Finance Division,
 the Internal Resources Division (IRD),
 the Banking Division and
the Economic Relations Division (ERD).
Each division is headed by a Secretary to the Government. Secretary, IRD
is the ex-office Chairman of NBR. NBR is responsible for formulation and
continuous re-appraisal of tax-policies and tax-laws in Bangladesh.
Major heads of tax-revenues of Bangladesh are as follows:

A. Taxes on Income and Profit

1. Income tax-Companies
2. Income tax-Other than Companies

C. Taxes on goods and services

1.Customs Duties
2.Excise Duties
3.Value Added Tax (VAT)
4.Supplementary Duty (On luxury items and in addition
to VAT)
5.Taxes on Vehicles
6.Electricity Duties
7.Other Taxes and Duties (travel tax, turn over tax, etc.)
 Major heads of non-tax
revenues are as follows:

D. Interest, Dividend and Profit

G. Economic Services
H. Agriculture and Allied Services
I. Transport and Communication
J. Other non-tax revenue
K. Capital Revenue
 Low Level of Revenue Mobilization
Regressive Nature of Taxation (especially VAT)
High Tax Incidence
 Low Tax Base
 High Degree of Tax Evasion
Limited Administrative Capacity
Resource Constraints (Human and Logistics)