Tax Tech Transformation Touted in Upcoming Budget

The government of Bangladesh is set to make online tax return filing mandatory for all individual taxpayers from the next fiscal year, as part of a broader push toward a modern, fair, and investment-friendly tax regime. This initiative is likely to be formally announced by Economic Adviser Dr. Salehuddin Ahmed in the national budget speech for the fiscal year 2025–26, scheduled for Monday, June 2, at 3:00 p.m.

In the absence of a political government and an active national parliament, this year’s budget will not be presented in the House but will instead be broadcast on Bangladesh Television.

Government sources indicate that steps are also being taken to enable corporate taxpayers to file their returns online. Meanwhile, agencies like the Bangladesh Telecommunication Regulatory Commission (BTRC) may be exempted from the obligation to file income tax returns.

As part of efforts to restore investor confidence in the capital market, the corporate tax gap between listed and unlisted telecom companies—such as Grameenphone and Robi—may be increased from 5% to 7.5%.

Tax on turnover for mobile operators is likely to be reduced from 2% to 1.5%, although this benefit will not be extended to regular business taxpayers, who will remain subject to the existing 1% turnover tax.

The proposed budget may also bring a range of adjustments in withholding tax and duties:

• Withholding tax on internet services may be reduced from 10% to 5%.

• Tax on interest income from securities may be raised from 5% to 10%.

• Withholding tax on electricity purchase payments may be lowered from 6% to 4%.

• Import duties on database and security software may be reduced from 10% to 5%.

• Supplementary duty on mobile SIM cards is set to remain unchanged at 20%.

To support eco-friendly recycling industries, the source tax on raw material supplies used in these sectors may be halved from 3% to 1.5%.

The upcoming budget may also include reforms to broaden the tax base and ease compliance. Currently, tax return submission proof is required to access 45 public services. Under the new proposal, this requirement may be eased for 12 services, including credit card issuance, where only a Taxpayer Identification Number (TIN) certificate would suffice.

Dr. Salehuddin is also expected to maintain the existing environmental surcharge exemptions for electric vehicles. The surcharge rates for the assessment years 2026–27 and 2027–28 are likely to remain unchanged.

In the current fiscal year, online return submission was made mandatory for all government officials in Dhaka, Narayanganj, and Gazipur districts, as well as for employees of scheduled banks and select companies. This resulted in over 1.6 million taxpayers filing their returns online.