The upcoming national budget for FY2026–27 is likely to introduce a new tax exemption measure aimed at strengthening Bangladesh’s small business ecosystem, particularly for SMEs, women entrepreneurs, and entrepreneurs with disabilities.
According to the proposal under consideration, income generated from businesses with annual turnover up to Tk50 lakh for SME entrepreneurs will remain tax-free. For women entrepreneurs and entrepreneurs with disabilities, the proposed tax exemption threshold is higher, extending up to Tk70 lakh in turnover.
The initiative is expected to reduce the tax burden on small businesses, improve cash flow, and encourage new entrepreneurship across the country’s grassroots economy.
General Secretary of the Women Entrepreneurs Network for Development Association (WEND) Merina Hossain said the proposal, if implemented, would provide significant relief to small entrepreneurs.
She said that keeping SMEs within a Tk50 lakh turnover tax-free limit would reduce VAT pressure and lower business costs. “If businesses under Tk50 lakh turnover are kept outside the 15 per cent VAT bracket, operating costs will decrease. Entrepreneurs will be able to offer more competitive pricing, improve cash flow as they will not need to set aside money for VAT payments, and it will encourage new entrepreneurs to enter the market. It will also simplify accounting and compliance processes, ultimately increasing net profit,” she said.
She added that such a policy would make small businesses more sustainable and competitive in the market.
President of the Association of Grassroots Women Entrepreneurs Bangladesh Mousumi Islam said the proposal would bring some benefits, but stressed that implementation would be the key challenge.
“This initiative will definitely provide some relief. However, our implementation capacity is weak. It must be ensured that what is announced actually reaches the people,” she said.
She also pointed to rising production costs, including raw materials and wages, driven by inflation. “Given the increasing cost of everything, this initiative will help to some extent. It may allow entrepreneurs to find a way to survive,” she added.
Experts believe the proposed measure could help integrate more small entrepreneurs into the formal economy, promote job creation, and strengthen the overall business environment. However, they emphasise the need for strong implementation mechanisms and effective outreach to ensure the policy benefits reach grassroots entrepreneurs.
