NBR restricts source tax benefits for select Bangladesh exporters

03 Apr '24

1 min read

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The National Board of Revenue issued a new circular recently clarifying its 4 March circular that allowed some exporters enjoying less than 12 per cent corporate tax to pay source tax below 1 per cent.
At present, almost all exporters are paying source tax at 1 per cent rate.
As per new circular, some sectors may be taxed at a higher rate than 1 per cent.

The National Board of Revenue (NBR) in Bangladesh has recently issued a supplementary circular to clarify its previous directive from March 4, which granted certain exporters enjoying corporate tax rates below 12 per cent privilege of paying source tax below 1 per cent.

As per reports, the NBR clarification necessitates exporters to obtain new tax certificates, with banks instructed to collect taxes from them at a revised rate. Notably, the updated circular omitted specification of the new tax rate, causing speculation of an impending increase in source tax for select exporters.

The initial directive, introduced on March 4, allowed exporters benefitting from corporate tax rates of 12 per cent or lower to pay source tax at a rate lower than the existing 1 per cent. However, the supplementary circular suggests that certain sectors or institutions may be subject to source tax rates exceeding 1 per cent.

Presently, the prevailing norm sees nearly all exporters paying source tax at a fixed rate of 1 per cent even as the recent circular revisions signify a shift in taxation policy, indicating potential adjustments to the tax burden borne by exporters in Bangladesh.

Fibre2Fashion News Desk (DR)

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