NBR exempts firms with turnover up to Tk2cr from minimum tax

The National Board of Revenue has exempted businesses and companies with annual turnover of up to Tk2 crore from minimum turnover tax, easing a tax burden that applies regardless of profitability.

NBR issued an order in this regard today (31 August) with effect immediately.

Under the revised structure, businesses with annual turnover of up to Tk2 crore will pay no minimum turnover tax. Those with turnover above Tk2 crore and up to Tk4 crore will pay a minimum tax of 0.50%, while businesses with turnover above Tk4 crore will continue to pay 1%.

Previously, a 1% minimum turnover tax was imposed regardless of whether a business made a profit or incurred a loss.

The business community has welcomed the move while calling for further reform of the system.

The Federation of Bangladesh Chambers of Commerce and Industry sent a letter to the finance minister on 24 August, urging the government to gradually move away from the 1% minimum turnover tax imposed on businesses and companies.

Md Fazlul Hoque, administrator of the business body, recently told TBS that taxation should ultimately be based on actual income, urging the abolition of the minimum turnover tax system in favour of taxation based on actual profits.

Until FY25, most companies, with some exceptions, were subject to a minimum turnover tax of 0.60% of annual turnover. Non-company businesses with annual turnover above Tk4 crore were subject to a 0.25% minimum turnover tax.

The 2025 budget raised the minimum turnover tax rate to 1% for both categories, raising concerns among businesses with low profit margins and loss-making firms, which were required to pay tax despite having no profits.

The latest exemption is expected to provide some relief to smaller businesses, NBR officials hope.