Women-led businesses and export-oriented industries could receive a broad package of tax incentives in the FY2026-27 budget, including lower Tax Deducted at Source (TDS), expanded corporate tax rebates and VAT reliefs.
The government considers proposals submitted by Women Entrepreneurs Network for Development (WEND), according to a source familiar with the discussions.
The measures under consideration include extending corporate tax rebates to all traditional and 100 per cent women-owned export-oriented industries, reducing TDS, simplifying income tax audits, accelerating tax refunds and restoring VAT exemptions for small businesses.
One of the key proposals would expand the existing corporate income tax rebate facility, currently available to selected export sectors at rates of 10 per cent to 12 per cent, to all traditional and wholly women-owned export industries.
Products such as jute, water hyacinth, bamboo, cane products and other non-traditional exports could become eligible for the benefit, potentially helping women entrepreneurs enter new markets and diversify Bangladesh’s export base beyond conventional sectors.
The government is also considering cutting the TDS rate for fully women-owned export-oriented industries to 0.50 per cent from 1 per cent, a move stakeholders say could help businesses retain more working capital and reduce reliance on bank borrowing.
Proposed VAT reforms focus heavily on reducing compliance burdens for small businesses and cottage industries.
The recommendations include restoring annual VAT exemptions for businesses with turnover of up to Tk50 lakh, replacing monthly VAT returns with annual submissions, reducing penalties for late filing and introducing a simplified VAT schedule for small and women-owned businesses.
Tax administration reforms are also under review, including direct electronic transfer of tax refunds to taxpayers’ bank accounts within 30 days.
Business leaders say the move would improve liquidity and ease cash flow pressures, particularly for small and women-led enterprises.
Changes to the income tax audit system are also being considered, including a more user-friendly audit manual developed in consultation with stakeholders and special provisions for small women entrepreneurs who often lack formal accounting systems.
Under another proposal, the National Board of Revenue and the Institute of Chartered Accountants of Bangladesh could waive Document Verification System fees for women-owned limited companies during their first five years of operation.
The measure aims to reduce compliance costs and legal complexities for small businesses.
Policymakers are also considering creating a separate simplified tax schedule for 100 per cent women-owned small enterprises, modelled on the Startup Schedule under the Income Tax Act, to simplify tax return filing and encourage greater compliance among women entrepreneurs.
Another proposal links tax incentives to Sustainable Development Goals (SDGs), offering a 10 per cent deduction on total income for companies investing in research and development, innovation, training, skills development and other SDG-related activities.
The measure is designed to encourage private-sector investment in productivity and human capital development.
If approved, the measures could lower operating costs for women-led exporters as Bangladesh seeks to diversify exports, strengthen small businesses and expand female participation in formal economic activity.
