The government is preparing one of the most aggressive tax-net expansion drives in recent years as it seeks to collect an additional Tk1,05,000 crore in National Board of Revenue (NBR) taxes under the national budget for the fiscal 2026-27.
An analysis of the draft budget speech, the Finance Bill 2026, and the official budget summary shows that the government is relying less on major tax-rate increases and more on tighter compliance requirements, wider taxpayer identification, and expanded VAT enforcement to achieve its ambitious revenue target.
Finance Minister Amir Khosru Mahmud Chowdhury is scheduled to present the budget before parliament today. The documents indicate that while taxpayers are offered relief through a higher tax-free income threshold and selected concessions, businesses and individuals will face a significantly broader compliance regime, bringing more economic activity into the formal tax system.
The NBR has been assigned a collection target of Tk6,04,000 crore for the next fiscal year, up from the revised Tk4,99,000 crore in the outgoing year — a 20.9 per cent increase in revenue collection despite repeated shortfalls. The challenge is heightened by the fact that the government had to lower the current fiscal year’s revenue target, collecting only about Tk3,27,000 crore in the first 10 months.
Rather than introducing broad-based new taxes, the government is focusing on expanding the number of taxpayers, strengthening compliance, and integrating tax registration into routine business activities.
The Finance Bill introduces a major requirement: businesses must provide a Business Identification Number (BIN) certificate or proof of VAT registration to open current or STD bank accounts, obtain loans from banks and non-bank financial institutions, renew trade licences, open merchant accounts under mobile financial services, obtain electricity and gas connections, join trade associations, and register commercial vehicles. These measures effectively make tax registration a prerequisite for conducting business.
The bill also imposes a 15 per cent VAT on imported services, except those specifically exempted, with banks, financial institutions, and authorised foreign exchange dealers required to deduct the tax before remitting payments.
The draft budget acknowledges structural weaknesses in Bangladesh’s revenue system, including a low tax-to-GDP ratio, narrow tax base, widespread exemptions, tax evasion, and limited digitalisation. To address these, the government aims to raise the tax-to-GDP ratio to 10 per cent in the medium term and 15 per cent by 2035 through a technology-driven, broader revenue framework.
The budget proposes a gradual withdrawal of exemptions, greater digitalisation, and stronger compliance measures. At the same time, visible tax relief will be provided: the tax-free income threshold for individual taxpayers is proposed to rise from Tk3,50,000 to Tk3,75,000, corporate tax rates remain largely unchanged, several withholding taxes are reduced, and the minimum tax for new taxpayers is cut from Tk3,000 to Tk1,000.
Targeted incentives are included for startups, freelancers, content creators, electric vehicles, solar power projects, and domestic edible-oil production using local oilseeds. Private universities and medical colleges are expected to benefit from a reduction in corporate tax from 15 per cent to 10 per cent.
The result is a budget balancing political and fiscal priorities: providing visible tax relief to households and selected sectors while constructing a wider enforcement framework to bring more taxpayers into the formal system.
