The government will hold a crucial meeting with the prime minister today to discuss key proposals for the national budget for fiscal year 2026–27, including introduction of a wealth tax, higher advance income tax (AIT) on luxury assets and withdrawal of taxes on essential commodities, officials of the National Board of Revenue (NBR) said.
The meeting will take place at 10am on Thursday at the Cabinet Division conference room, with the prime minister expected to attend. Officials said a range of revenue measures aimed at expanding the tax net and boosting collections are likely to be finalised.
Proposals include imposing AIT on personal firearms, motorcycles, battery-run auto-rickshaws, luxury electric vehicles, helicopters and private aircraft, alongside relief on essential imports to contain inflation.
The NBR has proposed replacing the existing surcharge on high-net-worth individuals with a wealth tax expected to generate an additional Tk5,000 crore annually. Net assets between Tk4 crore and Tk6 crore would be taxed at 0.25 per cent, rising to 0.50 per cent up to Tk11 crore, 0.75 per cent up to Tk16 crore and 1 per cent above Tk16 crore.
For the first time, AIT of Tk30,000–50,000 is being considered on renewal of personal firearm licences covering pistols, revolvers, rifles, shotguns and other licensed firearms from the next fiscal year, subject to approval at the meeting. Currently, firearm owners pay renewal fees of Tk20,000 for pistols or revolvers and Tk10,000 for rifles, shotguns and guns, with no advance tax in place.
Officials said the move aims to bring affluent individuals under greater tax scrutiny and raise revenue from luxury and non-essential assets. However, industry insiders warned it could discourage legal licence renewals and encourage illegal firearm possession.
Bangladesh Arms Dealers and Importers Association General Secretary Shafiqul Islam said firearm imports already face nearly 25 per cent combined VAT and source tax.
“If another layer of advance tax is imposed, it may increase the tendency to keep unlicensed or illegal firearms,” he said. Armed Forces Division Former Principal Staff Officer Lieutenant General (Retd) Md Mahfuzur Rahman also stressed the need for balanced implementation.
The NBR has also proposed AIT on motorcycles based on engine capacity. Motorcycles up to 110cc would remain tax-free, while 111–125cc would face Tk2,000, 126–165cc Tk5,000 and above 165cc Tk10,000.
Higher AIT is also under consideration for luxury private cars, high-powered electric vehicles, helicopters and private aircraft. At present, electric vehicles face advance tax of up to Tk200,000 depending on kilowatt capacity.
Battery-run auto-rickshaws may be brought under the tax net for the first time. Under the proposal, city corporation areas would pay Tk5,000 annually, municipalities Tk2,000 and union-level areas Tk1,000.
Centre for Policy Dialogue Distinguished Fellow Mustafizur Rahman said expanding the tax base is necessary but policymakers must ensure lower and middle-income groups are not disproportionately burdened.
To ease consumer pressure, the NBR has proposed withdrawing the existing 0.5 per cent advance tax on imports of essential commodities including rice, paddy, edible oil, sugar, lentils, flour, onions and spices. It also proposes reducing the existing 1 per cent turnover tax on essential goods to a more “rational level”, officials said.
The NBR is also likely to drop its earlier plan to increase withholding tax on interest income, keeping the existing 10 per cent source tax on bank deposit interest unchanged. It may also raise the excise duty-free threshold on bank deposits to Tk5 lakh from Tk3 lakh.
Exporters fear pressure as the NBR has proposed doubling the source tax on export cash incentives and subsidies to 20 per cent. They warned the move could add strain as exporters face weak global demand, rising production costs and stiff international competition.
As part of wider reforms, the NBR has proposed making Business Identification Number (BIN) mandatory for trade license renewal and maintaining business bank accounts. The upcoming budget may also introduce token VAT and package VAT systems to widen the tax net, improve compliance and digitise tax monitoring systems ahead of fiscal year 2026–27.
