DHAKA: Bangladesh has announced corporate income tax cuts and the introduction of the new value-added tax law in its new Budget, released on June 1. After years of delays and preparations, the Government has at last announced that the switch to the Value Added Tax and Supplementary Duty Act, 2012, will happen from July 1, 2017. In addition, corporate tax for the readymade garments industry will be reduced from 20 percent to 15 percent, or to 14 percent for those companies with internationally recognized green building certifications. In addition, the tax burden on non-listed banks, non-listed mobile phone operators, and cigarette makers will fall from above 40 percent currently to 40 percent.
The Budget also introduces new investment tax incentives for transport-related infrastructure, and new tax exemptions for alternative investment funds and the telecommunications and IT sectors. Bangladesh’s Finance Minister, Abul Mal Abdul Muhith, said other changes in the budget are intended to provide business with tax certainty, in particular by not raising tax rates, and an eased compliance burden, through various initiatives intended to promote voluntary compliance.
