NBR plans to collect travel tax directly from outbound passengers

The National Board of Revenue (NBR) is planning to collect travel tax directly from outbound passengers from the next fiscal year, replacing the existing system where airlines include the tax in ticket prices and later deposit it into the state treasury, said NBR Chairman Md Abdur Rahman Khan.

In many cases, airlines fail to submit the collected tax, prompting the NBR to consider a new mechanism, he said during a pre-budget discussion at the NBR headquarters in the capital's Agargaon today (17 April). 

Abdur Rahman said this change will be proposed in the upcoming national budget for FY26.

"Currently, airlines collect the travel tax on behalf of the government, but the funds often don't reach the state treasury. Some airlines go bankrupt or exit the market without paying what they owe, depriving the government of crores in revenue," he said.

"To avoid this, we want passengers to pay the tax directly. They will deposit the amount, receive a receipt [chalan], and present it before travel," the NBR chief added.

Trade bodies seek tax relief, policy support

At the discussion, representatives of various trade associations presented proposals to ease business operations.

The Aviation Operators Association of Bangladesh (AOAB) urged the government to exempt jet fuel from import duties and VAT, and to reduce taxes on aircraft components.

The Solar Module Manufacturers Association of Bangladesh proposed a Tk500 crore financial support package to boost local solar panel production.

The Bangladesh Sweets Manufacturers Association called for reducing VAT on sweets from 10% to 3% to support the domestic confectionery industry.

In response, the NBR chairman said, "I myself have bought sweets from many shops. None of the shopkeepers provides a VAT receipt. They don't use Electronic Fiscal Devices [EFDs]. This is a problem."

He added, "We will include VAT in the price of sweets. It will be inclusive — VAT will not be shown separately. That way, customers won't be shocked by seeing the VAT amount. We're preparing such a directive. VAT will be calculated on the total value."

The Bangladesh Inland Waterways Passenger Carriers Association recommended exempting VAT on air-conditioned cabins of passenger vessels to promote water-based transport.

Meanwhile, the Bangladesh Manufacturers Association of Transformer and Switchgear called for full duty waivers on 65% of the raw materials used in manufacturing export-bound equipment.

In his closing remarks, the NBR chairman assured business leaders that the revenue board is committed to making regulatory processes more business-friendly.

"Our primary objective in the next year's budget is to facilitate trade, close loopholes, and reduce inequality," said Abdur Rahman.