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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

The Finance Bill 2023 has been introduced with the enactment of new legislation, Income Tax Act, 2023.
Till the time the scripture is published in its entirety we look upon the significant changes proposed
by the Finance Bill as summarized below. We will come up with a comprehensive summary of the
changes introduced to the existing regulations with the introduction of the Income Tax Act, 2023. Till
then, stay tuned with us.

Personal Income Tax

Rate of Income Tax

Rate of personal income tax is proposed to be updated as follows:

Amount of Taxable Income

Rate
Existing Proposed

First Tk. 300,000 or as applicable First Tk. 350,000 or as applicable Nil

Next Tk. 100,000 Next Tk. 100,000 5%

Next Tk. 300,000 Next Tk. 300,000 10%

Next Tk. 400,000 Next Tk. 400,000 15%

Next Tk. 500,000 Next Tk. 500,000 20%

On the balance On the balance 25%

Female taxpayers and taxpayers above the age of 65 years will enjoy tax exemption up to
Tk. 400,000.

Taxpayers of third gender and with disability will enjoy tax exemption up to Tk. 475,000.

Gazetted freedom fighters will enjoy tax exemption up to Tk. 500,000.

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Parents or legal guardians of disabled individuals will enjoy a further exemption of BDT
50,000 in addition to their existing limit of tax exempted income. If both parents of a
disabled individual are taxpayers then one of them will be eligible for this increased limit of
exemption.

Individuals obligated to file the income tax return must pay a minimum of Tk. 2,000 even if
their total income falls under tax exempt limit.

Surcharge

Any individual taxpayer whose total net worth as per their Personal Balance Sheet and Lifestyle
Statement exceeds the permissible limit will be subject to surcharge on income tax in the
following manner:

Net Worth
Rate of
Existing Proposed Surcharge

Up to Tk. 30,000,000 Up to Tk. 40,000,000 Nil

• Tk. 30,000,001 to Tk. 100,000,000 • Tk. 40,000,001 to Tk. 100,000,000 10%

or or

• Owns more than one motor car in • Owns more than one motor car
his/her name, or in his/her name, or

• Owns property of more than 8,000 • Owns property of more than

square feet in any city corporation 8,000 square feet in any city
area corporation area

Tk. 100,000,001 to Tk. 200,000,000 Tk. 100,000,001 to Tk. 200,000,000 20%

Tk. 200,000,001 to Tk. 500,000,000 Tk. 200,000,001 to Tk. 500,000,000 30%

Above Tk. 500,000,000 Above Tk. 500,000,000 35%

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Environment Surcharge

Individual taxpayers having more than one personal vehicle will be subject to environment
surcharge on the additional vehicle in the following manner:

In case of more than one vehicle, surcharge will be exempted on the vehicle with the lowest
applicable surcharge.

Environment surcharge will be collected at source by the vehicle registration or fitness

renewal authority during registration or fitness renewal of the vehicle.

If registration or fitness renewal is done for more than one year then environment surcharge
for the years subsequent to the effective year of renewal or registration will be charged as
applicable for the concerned subsequent years.

Failing to pay the surcharge at source in the above manner will result to payment in the
following manner:

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Total surcharge payable = A + B

A = Total surcharge B = Surcharge applicable

unpaid for past year(s) + for the year of payment

If the registration or fitness renewal is done for more than one year then the environment
surcharge for each applicable year will be collected by the Deputy Commissioner of Taxes
during assessment of income tax return or determination of income tax for that year.

Environment surcharge applicable under this section shall not be associated with any other
tax or surcharge.

“Motor Vehicles” specified under this section shall not include any bus, minibus, coaster,
prime mover, truck, lorry, tank lorry, pickup van, human hauler, autorickshaw and motorcycle.

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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

Travel Tax

Individuals travelling inside or outside Bangladesh will now be subjected to travel tax in the
following manner:

Travel Type Tax Amount (BDT)

North and South America, Europe, Africa, Australia, New Zealand, 6,000
China, Japan, Hong Kong, North Korea, Vietnam, Laos and Cambodia,
Taiwan by air

Any countries under SAARC by air 2,000

Any other countries by air 4,000

Inside Bangladesh by air 200

Any country by road 1,000

Any country by water 1,000

Exemption from travel tax on individuals is proposed to be applicable in the following manner:

Children under the age of 5 years are proposed to be fully exempted.

Children under the age of 12 years are proposed to be subject to travel tax at half the
standard rate.

Following individuals are proposed to be fully exempted:

Individuals travelling to Saudi Arabia to perform the Holy Hajj.

Individuals who are blind, cancer patient or disabled and requires a stretcher.

UN workers and their family members.

Diplomats residing in Bangladesh in diplomatic missions and their family members.

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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

Employees of World Bank, German Vocational Organization and Japan International

Development Organization residing in Bangladesh and their family members.

Flight crew members.

Travelers in transit and without Bangladeshi VISA staying in Bangladesh for less than 72
hours.

Employee of any airline who is a Bangladeshi citizen and travels outside the country for
reduced or waived plane fare.

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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

Corporate Income Tax

Rate of Income Tax

Applicable tax
Existing Proposed rate if fails
Description
2022-2023 2023-2024 to meet the
condition

Publicly traded company that issues

shares worth more than 10 percent
20% Unchanged 22.5%
of its paid-up capital through Initial
Public Offering (IPO)

Publicly traded company that issues

shares worth ten percent or less
22.5% Unchanged 25%
than ten percent of its paid-up capital
through IPO

Non-publicly traded company 27.5% Unchanged 30%

One Person Company (OPC) 22.5% Unchanged 25%

Publicly traded bank, insurance and Condition not

37.5% Unchanged
financial institution (except merchant applicable
bank)

Non-publicly traded bank, insurance Condition not

40% Unchanged
and financial institution applicable

Merchant bank Condition not

37.5% Unchanged
applicable

Company producing all sorts of 45% +

tobacco items including cigarette, 2.5% Unchanged Condition not
bidi, chewing tobacco and gul (sur- applicable
charge)

Publicly traded mobile operator 40% Unchanged Condition not

company applicable

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Applicable tax
Existing Proposed rate if fails
Description
2022-2023 2023-2024 to meet the
condition

Non-publicly traded mobile operator 45% Unchanged Condition not

company applicable

Association of persons 27.5% Unchanged 30%

Artificial juridical person and other 27.5% Unchanged 30%

taxable entity

Co-operative societies registered

15% Unchanged Condition not
under Co-operative Societies Act,
applicable
2001

Private university, private medical

college, private dental college, 15% Unchanged Condition not
private engineering college or private applicable
college solely dedicated to imparting
education on ICT

*Condition: All receipts and income must be transacted through bank transfer and
every single transaction above Tk. 5 lakhs and annual investment over Tk. 36 lakhs
of expense and investment must be made through bank transfer.

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Changes in Rate of Withholding Tax

Rate of withholding tax on the supply of tobacco items including cigarette, bidi, chewing
tobacco and gul has been proposed to be increased from 7% to 10%.

Rate of withholding tax on the supply of locally produced cable of 33 to 500 KV has been
proposed to be decreased from 7% to 3%.

Periodic Tax Returns

The return under section 75A has been updated to include the following returns abolishing the
requirement of submission of these returns independently:

Salary return under Section 50 (Rule 21)

Monthly withholding tax return under Section 58 (Rule 18)

Interest return under Section 109 (Rule 20)

Dividend return under Section 110 (Rule 19)

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VAT & Supplementary Duty

VAT on the purchase of any vehicle cannot be considered as an input anymore.

VAT consultants will now be eligible to represent any entity.

Invoices issued by a digital payment gateway shall be considered as a tax invoice subject to
fulfillment of certain conditions.

To obtain a VAT refund without carrying the balance forward, Supplementary Duty (SD)
at the import stage needs to be eligible for decreasing adjustment and goods subject to
Supplementary Duty (SD) cannot be supplied at the stage of local supply by the concerned
person.

VAT rates have been proposed to be increased for the following products:

H.S.
Particulars Existing Rate Proposed Rate
Code

Handmade biscuits 5% (Tk. 150 5% (Tk. 200

19.05 per kg) per kg)

Biscuits 5% (Tk. 250 5% (Tk. 300

per kg) per kg)

39.24 All plastic tableware, kitchenware,

household products, hygienic and 5% 7.5%
toiletries products and other similar
products.

48.18 Kitchen towel and toilet tissue 5% 7.5%

76.15 Aluminum and aluminum products 5% 7.5%

90.04 Sun glass 5% 7.5%

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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

Supplementary Duty (SD) rates have been proposed to be increased for the following
products:

H.S.
Particulars Existing Rate Proposed Rate
Code

24.04 Products containing tobacco,

reconstituted tobacco, nicotine,
or tobacco or nicotine substitutes,
100% 150%
intended for inhalation without
combustion; other nicotine containing
products intended for the intake of
nicotine into the human body

48.13 Cigarette paper imported by other - 150%

importers

VAT rate for confectionary stores (Service code S022.00) has been proposed to be reduced
from 15% to 7.5%.

The definitions of “Online retail sale” and “Marketplace” have been newly introduced under
Service code S099.60 (e-commerce services).

Exporters can now submit application to the Commissioner without submitting Process
Realization Certificate (PRC) to adjust the supplementary duty in cases of export of goods
through Mushak 7.1.

If an entity fails to claim the VAT credit or make adjustments within the stipulated timeline,
VAT returns cannot subsequently be amended/updated on a later date.

Only supplies which are eligible for input rebate can be included in the computation of
partial input tax rebate.

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www.aceadvisory.biz Bangladesh Finance Bill 2023 Highlights

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