Govt mulls gradual withdrawal of excise duty: NBR chief

The government plans to gradually phase out the long-standing excise duty in the country, citing the need to balance revenue considerations, National Board of Revenue (NBR) Chairman Abdur Rahman Khan said today (25 January).

Speaking at a press conference at NBR headquarters in Dhaka, on the eve of International Customs Day, the NBR chief said that the government had taken a step in this direction by withdrawing excise duty on bank deposits up to Tk300,000 last year. 

 "We have sent a signal that we will gradually move away from this (excise duty)," he said, adding that a complete removal at once is not feasible due to potential revenue shortfalls.

Currently, excise duty is imposed on bank deposits and airfares. Deposits up to Tk300,000 are exempt, while higher amounts are taxed at different slabs. Airfares are also taxed at varying rates for domestic and international passengers. NBR sources estimate that the duty generates around Tk6,000 crore annually.

NBR extends income tax return deadline to 31 January

Addressing concerns about revenue replacement, a senior NBR official, speaking on condition of anonymity, said the withdrawal would be phased out gradually, with revenue to be offset by other sectors, including tobacco.

"We expect to collect an additional Tk10,000 crore from the tobacco sector this fiscal year due to policy measures," the NBR chairman said.

The official also questioned the fairness of excise duty on bank deposits, arguing that it distorts tax equity. "Even if someone takes a loan, excise duty is deducted simply because the money is deposited in a bank. Besides this, there is VAT on services and other taxes. This is unjustified," he said. Regarding airfares, he indicated that VAT could replace excise duty if it is withdrawn.

Abdur Rahman Khan further highlighted government efforts to reduce import duties, noting that a draft plan has already been submitted.

He said several initiatives have improved the ease of doing business, including releasing 90% of imported consignments from ports within a day, though traders still raise concerns over product valuation at the import stage.

Meanwhile, the NBR chief hinted at a possible further extension of the deadline for individual income tax return filings, which is currently set to expire on 31 January.

At the same event, the chairman said that the board might consider more time if a significant number of registered taxpayers fail to submit their returns by the current cutoff.

However, he clarified that a formal decision has not yet been made.

According to NBR data, about 4.7 million individuals registered to file tax returns this year, with 3.4 million already submitted. This leaves approximately 1.3 million yet to file within the remaining six days. The original deadline of 30 November had already been extended twice, giving taxpayers a total of two additional months.