National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan has announced that the upcoming national budget for the fiscal year 2025-26 will include significant cuts in the country’s tax exemption system. Speaking at a pre-budget meeting on Wednesday, he revealed that a considerable number of tax exemptions have already been withdrawn, with more cuts expected in the next budget.
“This time, you will see some major changes. We have already removed several tax exemptions, and you will see the rest in the next budget,” he stated.
The meeting, held at the NGR Conference Room, included stakeholders such as BEZA, BIDA, BUILD, Bangladesh Hi-Tech Park Authority, and American Chamber of Commerce in Bangladesh (AmCham). During the discussion, Khan emphasized that both individuals and business entities currently benefiting from reduced tax rates would need to pay slightly more in taxes starting from the next budget.
He explained, “We can provide support for a limited time, but this cannot go on forever. One must pay taxes at the regular rate.”
Khan highlighted the need to streamline the tax system, particularly for those who have been receiving tax exemptions for an extended period. Referring to a study, he pointed out that the amount of tax collected by the government is similar to the amount it loses due to tax exemptions.
“We must address this issue as we are facing immense pressure regarding these exemptions,” he said, adding that the exemptions will be gradually phased out.
The NBR Chairman also noted that his organization will intensify efforts to track down individuals and businesses that are not paying taxes or VAT properly, stressing that the benefits of tax exemptions do not directly reach consumers.
“Rather a big portion of this tax exemptions remains with the business people, there is a widespread complaint regarding this matter although this should not be done,” he said.
The government of Bangladesh since its independence had announced a series of tax exemption measures different times aimed at attracting both local and foreign investment, promoting industrialisation, and fostering economic growth.
Under the policy, businesses in key sectors such as agriculture, information technology, renewable energy, and export-oriented industries gets benefit from significant tax relief. Startups and small and medium enterprises (SMEs) are also set to receive exemptions designed to encourage entrepreneurship and job creation.
According to NBR it introduced targeted tax benefits to stimulate growth in priority sectors. This move was expected to ease financial pressure on businesses and encourage long-term investment.
One of the key highlights of the policy is the extension of tax holidays for new industrial undertakings. Businesses in designated economic zones and hi-tech parks will enjoy tax exemptions for up to 10 years, depending on their investment size and industry type. Export-oriented businesses will also benefit from reduced corporate tax rates, designed to enhance the country’s competitiveness in global markets.
In the agriculture sector, companies involved in the production and processing of agricultural goods, including dairy and fisheries, will receive tax exemptions aimed at ensuring food security and promoting rural development.
The information and communication technology (ICT) sector, a rapidly growing contributor to Bangladesh’s economy, is also get benefit. Software developers, IT-enabled service providers, and e-commerce businesses also enjoy tax breaks.
While Bangladesh’s tax exemption policies aim to attract investment and promote economic growth, experts are increasingly wary of their negative impacts on revenue collection, economic equality, and long-term development.
Critics argue that these measures often lead to significant revenue losses for the state. Bangladesh already struggles with a narrow tax base, and generous exemptions further limit the government’s ability to fund essential public services like education, healthcare, and infrastructure.
Another concern is the potential for misuse and lack of transparency. Experts caution that businesses sometimes exploit tax exemptions without making the promised investments or creating jobs. In some cases, politically connected companies benefit disproportionately, raising questions about fairness and governance.
Moreover, the long-term impact on economic efficiency is also debated. Tax breaks can discourage innovation and productivity if businesses rely on incentives rather than improving competitiveness.
As Bangladesh moves toward becoming a middle-income country, experts call for reassessing tax exemption policies. They recommend a more balanced approach — offering targeted incentives while strengthening tax administration and ensuring fair revenue collection. Without careful reform, the negative impacts of tax exemptions could outweigh their intended benefits.
