Salient Features of

Finance Act
2024
Preface

This handout provides an overview of the changes brought in by the Finance Act 2024 and the

SROs issued thereafter. The handout has been prepared on the basis of publicly available sources
i.e. NBR website.

The information contained in this document is of a general nature and is not intended to address
the circumstances of any particular individual. Although we aim to provide accurate and updated
information, we do not provide assurance that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the
particular situation.

Preface
National Budget Comparison
Particulars FY 2024-25 (Proposed) FY 2023-24 (Revised) % Change
Amount in Crore Taka Amount in Crore Taka

Total Size of Budget 797,000 714,418 11.56%

Total Revenue Earnings 541,000 478,000 13.18%

Earnings from NBR 480,000 410,000 17.07%

Budget Deficit 256,000 236,418 8.28%

GDP Growth 6.75% 5.82% 15.98%

Inflation 6.5% 8% 18.75%

Source: Budget Speech, NBR Website

 Source and Allocation of Budget
Actual Budget Revised Budget
Sector
2022-23 2023-24 2023-24 2024-25
Revenue 366,658 500,000 478,000 541,000
Tax Revenue 327,725 450,000 429,000 495,000
NBR Tax Revenue 319,731 430,000 410,000 480,000
Non-NBR Tax Revenue 7,994 20,000 19,000 15,000
Non Tax Revenue 38,933 50,000 49,000 46,000
Foreign Grant 2,752 3,900 3,500 4,400
Total Expenditure 573,857 761,785 714,418 797,000
Operating Expenditure 369,864 475,281 453,228 506,971
Net Outlay 1,013 502 (1,234) 119
Loans & Advances (2,178) 8,420 2,417 8,457
Development Expenditure 205,158 277,582 260,007 281,453
Budget Deficit (Excluding Grants) (207,199) (261,785) (236,418) (256,000)
Financing
Foreign Borrowing 79,156 102,490 76,293 90,700
Domestic Borrowing Statement 124,361 155,395 156,625 160,900
Non-Bank Borrowing 6,336 23,000 690 23,400
Total-Financing (Excluding non-bank borrowing) 203,517 257,885 232,918 251,600

Source: Budget Speech, NBR Website

 NBR Receipt Comparison

2024-25 Sources of Receipts: 2023-24

(In Crore Taka) Revised
Total Estimated Receipts Tk. 480,000 Total Estimated Receipts Tk. 410,000

177,600 (37%) 147,600 ( 36%)

177,600 (37%) 151,700 (37%)

Import &
124,800 (26%) Other Duty 110,700 (27%)

Source: Budget Speech, NBR Website

 Year-wise NBR Budget Revenue

** Expected Revenue
600,000 100%

480,000
88% 90% 93%
91% 90%

430,000

410,000
500,000 78%

380,754
72% 80%

370,000

370,000

331,500
330,000

330,000

330,000
325,600
70%

301,684
301,000
300,500
400,000
296,201

280,063

263,886
60%
218,616

215,400
300,000 50%
40%
200,000
30%
20%
100,000
10%
- 0%

Initial Budget Revised Budget Revenue collected Collection Percentage

Revenue until July 2022 to May 2023 282,417

Revenue until July 2023 to May 2024 324,867
Expected Revenue in 12 months if trend continues in June 2024 380,754
Revised Budgeted Revenue 410,000
Source: Newspaper & NBR
Direct Tax
 Conditional Corporate Tax Rate
New Previous
Ensuring Non-
Description compliance compliance
Tax rate Tax Rate
with the with Condition:
conditions conditions All receipts and income must be
Publicly traded company that transfer shares transacted through bank transfer
worth more than 10 percent of its paid-up capital 22.5% 20.0% 20% 22.5% and every single transaction above
through IPO Tk. 5 lakhs and annual transaction
Publicly traded company that transfer shares over Tk. 36 lakhs of expense and
worth 10% or less than ten percent of its paid-up 25% 22.5% 22.5% 25% investment must be made through
capital through IPO bank transfer.
Non-publicly traded company 27.5% 25% 27.5% 30%
One Person Company (OPC) 22.5% 20% 22.5% 25%
27.5%
Other than company, trust, fund, AOP and Others 27.5% 30%

Co-operative society 20% 15% No Conditions

Recognized PF, GF, Pension and Superannuation
15% 15%
Fund

Direct Tax
 Introduction of Prospective Tax Rate

Previous New
Description
Introduced in Effective from Impact Introduced in Effective from Impact

Income Tax rates for individual, AY 2024-2025 Retrospectively

FB 2023 AY 2023-2024 Retrospectively FB 2024
companies and other than companies AY 2025-2026 Prospectively

WHT rates FB 2023 AY 2024-2025 Prospectively FB 2024 AY 2025-2026 Prospectively

Provision of ITA 2023

Consideration of AIT at the import stage as

FB 2023 AY 2023-2024 Retrospectively FB 2024 AY 2024-2025 Retrospectively
a minimum tax [Section 163(3)]

Taxpayer will be able to plan

their tax liability ahead
Direct Tax
 Surcharge on Education Institutions
If educational institutions don’t Earlier New
provide accessibility for disabled
persons as per the law, a surcharge Surcharge
will be applied. Additional Tax introduced on
@5% on applicable Earned Income
tax @2.5%

Encouraging inclusivity for people with

special abilities

Direct Tax
 Change of Approval Authority

Gratuity Fund

To be taken from Commissioner

Superannuation Fund of Taxes instead of the Board

Pension Fund

The process of obtaining approval will

become less time-consuming and easier.
Direct Tax
 Acquisition of Assets to be Considered as Income

Income will include the acquisition of any assets which are –

1. Not natural
2. Not created by own self
3. Not acquired against indebtedness or mortgage (foreclosure)
4. Not acquired through inheritance, will, bequest, or trust
5. Not acquired through exchange or purchase

• Enhanced clarity on the taxability of assets

acquired through various mediums.
• Gifts to be considered as taxable income on
the hand of the recipient (except gifts from
parents, children, or spouse).

Direct Tax [ u/s 2(13)]

Amendment in definition of Employee

Worker of Tea Garden and Daily Laborer not to be

considered as Employee

• Cash payment to Daily Laborer may be admissible

• May lose the benefit of conditional reduced tax rate

Direct Tax [ u/s 2(25)]

Approval of Charitable organization

• Approval by Board Commissioner of Taxes

• Approval by NGO Affairs Bureau

➢ The process of obtaining approval will

become less time-consuming and easier
➢ Ensure utilisation of donations

Direct Tax [ u/s 2(43)]

Definition of Dividend

Loan, advance, or other benefits paid to the

shareholders (or on behalf of shareholders) of
a private company out of retained earnings will
be considered as dividends.

OPC and PLC will also come

under the purview

Direct Tax [ u/s 2(81)]

 Inclusion of Admitted Liability

Admitted Tax Liability will be

defined as tax liability reported u/s 173,
174 or 181 (as applicable)

Clarification on
admitted tax liability

Direct Tax [u/s 2(89)(Ka)

 Delegation of power

Board, by order –
• Can delegate its power, to other subordinate income
tax authority
• Can delegate power of one income tax authority to
another income tax authority
Commissioner of Taxes, by order –
• Can delegate its power, other subordinate income
tax authority

Flexibility in operation

Direct Tax [u/s 35]

 Income from Rental Property

Rental Income from House Property

Segregated
Rental Income from other than House Property

• Rental Income from Hostel, Hotel, Motel or Resort excluded

from “Rental Income”

• Only the Adjustable part out of Advance will be considered as

Rental Income

• Salami or Premium will not be considered as Rental Income

• Service charges, repair & maintenance charges, or any money

paid by the tenant Included within Rental Income ▪ Relief for rental other than house property as they will be
to claim business expenses.
• Vacancy will need to be proved by electricity bill, no need to
inform DCT ▪ Relief for homeowners as non-adjustable advance will not
be taxed anymore
• Allowance Repair and Maintenance expense 30% for commercial
purpose , 25% for non-commercial purpose

Direct Tax [u/s 35]

 Income from Rental Property
Scenario:1
Mr. Jamil rented a flat for Tk. 100,000 per month to Mr. Karim. He received a non-adjustable advance of TK.
500,000. He spent Tk. 150,000 for repair and maintenance. The annual Value of the flat is Tk. 1,270,000.
The taxable income of Mr. Jamil is as follows:
Particulars New Previous
Amount Amount
A Rent received: 1,200,000
B Annual Value: 1,270,000
Kha Rental income (Higher of A or B) 1,270,000 1,270,000
Ga Non-adjustable advance from tenant - 500,000
Ka (Kha+Ga) Total Rental Value 1,270,000 1,770,000
Admissible deduction:
Less: (Repair & Maintenance: 25% of Total Rental Value (317,500) (317,500)
Rental value [Ka])
Income from Rent 952,500 1,452,500
Add: Special Rental Income
Unspent Repair & Maintenance (317,500 - 150,000) 167,500
Total Taxable Income from Rent 1,120,000 1,452,500

Direct Tax
 Special Income from Rent

Special Rental Income

Unspent portion of eligible Repair and Maintenance Special Income from

Inadmissible expenses from other than House Rent
Property

Higher Tax liability on Special Rental income

Direct Tax [u/s 39]

 Special Income from Rent
Scenario:2
Mr. Jamil purchased an excavator (mounted on chain plate) for Tk. 2,000,000 and rented it for Tk. 110,000 per
month. He spent Tk. 400,000 for repair and maintenance, Tk. 200,000 for fuel, Tk. 120,000 for salary of business
manager and Tk 5,000 for business promotion. Annual Value of the excavator is Tk. 1,270,000. Taxable Income of
Mr. Jamil are as follows-
Particulars New Previous
Amount Amount
A Rent received 1,320,000
B Annual Value 1,270,000
Rental income (Higher of A or B) 1,320,000 1,320,000
Total Rental value 1,320,000 1,320,000
Less: Admissible deduction:
Repair & Maintenance
(400,000) (132,000)
Actual/10% of Total Rental Value
Fuel Expense (200,000) -
Salary of business Manager (120,000) -
Promotional Expenses (5,000) -
Depreciation (200,000) -
Total Taxable Income from Rent 395,000 1,188,000
Direct Tax
 Amendment on Admissibility of WPPF

Amount Paid Payable to Worker’s Participation

Fund, Welfare Fund and Bangladesh Worker’s
Welfare Foundation Fund

WPPF

• Accrual accounting treatment acknowledged

• Compliance with Labour Law won’t create
inadmissibility
Direct Tax [u/s 49]
 Amendment on Admissibility of WPPF
Company A had profit before tax of BDT 1050 million for the year ended 30 June 2024. The
company charged BDT 50 million as WPPF expense but did not pay it to the fund yet. The tax
implication is as follows:

Particulars Previous New

Profit before WPPF & Tax 1050 1050
WPPF Expense 50 50
Profit before tax 1000 1000

Calculation of taxable income:

Profit before tax 1000 1000
Add: inadmissible expenses
WPPF Expense 50 0
Taxable Income 1050 1000
Tax @ 27.5% 288.75 275

Direct Tax
 Amendment in the special business income

Exclusion from Special Business Income

Head of Expenses
Excess perquisite
Royalty, license fee, technical fee etc.
Head office or intercompany expense
Impairment Loss
Entertainment
Free sample
Promotional expense
Any unspecified liabilities or expenses

Direct Tax [u/s 56]

 Amendment in the special business income u/s 56
A 100% export-oriented company having a net profit before tax of Tk. 1,000,000 has inadmissible
expenses comprised of excess perquisite of Tk. 500,000. AIT at Import Stage Tk. 100,000
Particulars Previous New
Amount Amount
Sales 10,000,000 10,000,000
Net Profit Before Tax 1,000,000 1,000,000
Add: Inadmissible Expense u/s 55 500,000 500,000
Total Business Income including inadmissible
1,500,000 1,500,000
u/s 55

Computation of Tax Liability Rates Amount Rates Amount

Tax on Business Income 12% 120,000 12% 180,000

AIT (Minimum Tax u/s 163(2) 1% 100,000 1% 100,000
Minimum tax on Gross Receipt u/s 163(5) 60,000 60,000 Effective tax
Gross tax liability 120,000 180,000 rate will reduce
Tax on special business income u/s 56 25% 125,000 -
Total tax liability 245,000 180,000
Effective Tax Rate 24.50% 18.00%

Direct Tax
 Amendment in the special business income u/s 56
A loss-making company having net loss before tax of Tk. 1,000,000 has inadmissible expenses comprised of
excess perquisite 500,000. AIT at Import Stage Tk. 100,000
Particulars Previous New
Amount Amount
Sales 10,000,000 10,000,000
Net Profit Before Tax (1,000,000) (1,000,000)
Add: Inadmissible Expense u/s 55 500,000 500,000
Total Business Income including inadmissible u/s 55 (500,000) (500,000)

Computation of Tax Liability Rates Amount Rates Amount

Tax on Business Income 25% - 25% -

AIT (Minimum Tax u/s 163(2) 10% 100,000 10% 100,000
Minimum tax on Gross Receipt u/s 163(5) 60,000 60,000
Gross tax liability 100,000 100,000 Effective tax
Tax on special business income u/s 56 25% 125,000 - rate will reduce
Total tax liability 225,000 100,000
Effective Tax Rate against Revenue 2.25% 1.00%

Direct Tax
 Amendment in the special business income u/s 56
An ITES company having a net profit before tax of Tk. 1,000,000. It also incurred excess
perquisite of Tk. 500,000.
Particulars Previous New
Amount Amount
Sales 10,000,000 10,000,000
Net Profit Before Tax 1,000,000 1,000,000
Add: Inadmissible Expense u/s 55 500,000 500,000
Total Business Income including inadmissible
1,500,000 1,500,000
u/s 55

Computation of Tax Liability Rates Amount Rates Amount

Tax on Business Income 0% - 0% -

AIT (Minimum Tax u/s 163(2) 0% - 0% -
Minimum tax on Gross Receipt u/s 163(5) - - Effective tax
Gross tax liability - - rate will reduce
Tax on special business income u/s 56 25% 125,000 0% -
Total tax liability 125,000 -
Effective Tax Rate 12.50% 0.00%

Direct Tax
 Amendment in the special business income u/s 56
An ITES company having a net loss Tk. 1,000,000. It also incurred excess perquisite of Tk.
500,000.
Particulars Previous New
Amount Amount
Sales 10,000,000 10,000,000
Net Profit Before Tax (1,000,000) (1,000,000)
Add: Inadmissible Expense u/s 55 500,000 500,000
Total Business Income including inadmissible
(500,000) (500,000)
u/s 55

Computation of Tax Liability Rates Amount Rates Amount

Tax on Business Income 0% - 0% -

AIT (Minimum Tax u/s 163(2) 0% - 0% -
Minimum tax on Gross Receipt u/s 163(5) - - Effective tax
Gross tax liability - - rate will reduce
Tax on special business income u/s 56 25% 125,000 0% -
Total tax liability 125,000 -
Effective Tax Rate 12.50% 0.00%

Direct Tax
 Exclusion of Unpaid Interest

Scope for keeping interest expense as payable

up-to three years has been omitted.

• Unpaid interest will not be tax deductible.

• Aligned with Section 52.

Direct Tax [u/s 46(7)]

 Carry forward of loss
XYZ Ltd. has a gross receipt of BDT 100 million and net loss of BDT 20 Million. It
needed to pay tax of BDT 6 lac on gross receipt. Can the company carry forward its
loss of BDT 20 million to the next year?

Particulars Previous New

Carry Forward of Loss 0 20 Million

Direct Tax [u/s 70(3)]

 Submission of Audit Report

Entities Gross Receipt Audit Report

Firm, Trust, AOP, Societies, Exceeding 5 Crore Required to submit
Foundation, Societies, Co-
operative Society

Fund N/A Required to submit

Primary & Pre-Primary N/A Not required
Educational Institute
Other Educational Institute N/A Required to submit
Companies as per ITA, 2023 N/A Required to submit

Limit of gross receipt extended from 3

Crore to 5 Crore
Direct Tax [u/s 73]
 Exemption of Tax

A person exempted from tax on income from a specific source for

a certain period cannot receive another exemption for the same
source in any other period or manner, even if reconstituted by
amalgamation, demerger, or acquisition.

Will not apply if the exemption period is extended by law or

notification.

Exemption of tax cannot be availed twice

on the same income
Cancelled

Direct Tax [u/s 76]

 WHT on disbursement from accumulated
balance of RPF

Income received by the employee from the

accumulated balance of RPF

Length of service with

employer will have no impact

Direct Tax [u/s 86]

 Deducting authority changed for TDS on Fund

Previously No TDS Previously TDS @10%

Now TDS @10% Now No TDS

Company Participatory fund, Beneficiaries
Welfare fund, &
Workers’ welfare
Found Fund
Who will be the
beneficiary of the tax
deducted by the company?
▪ More Tax will be deposited to govt. treasury
▪ Obligation will fall upon company for WHT
▪ Beneficiaries will not be required to pay tax
since it is exempted under 6th Schedule.
Direct Tax [u/s 88]
 Collection of tax from supplier of Goods

Earlier New
TDS
Amount (Base Value)
Rate
Up to 50 lakh 3%
5% instead of the slab rate
More than 50 lakh to 2 crore 5%

More than 2 crore 7%

• Suppliers having base value of 2 core+ benefited

• Suppliers having base value up to 50 lakh sufferer
Direct Tax [u/s 89 Rule 3 ]
 Deduction of tax from contractor

Type of Goods Previous New

Payment to contractors & sub-contractors for the
deed/agreement of Manufacture, process or
Slab 7%
conversion, Civil work, construction, Engineering
or any similar type of service

Small Suppliers will suffer

Direct Tax [u/s 89 Rule 3 ]

 Deduction of tax from supplier of Goods

Type of Goods Previous New

Recycled Lead supply slab 3%

No more Comparative
advantage for Small Supplier

Direct Tax [u/s 89 Rule 3]

 Change in WHT from supplier of essential goods

Type of Goods Previous New

In case of supply of rice, wheat, potato, Fish, Meat,
onion, garlic, peas, chickpeas, lentils, ginger, turmeric,
dried chilies, pulses, maize, coarse flour, flour, salt, 2% 1%
edible oil, sugar, black pepper, cinnamon, cardamom,
clove, date, cassia leaf, jute, cotton and yarn
Gas distribution company 3% 2%
In case of supply of oil by any company engaged in
3% 2%
oil refinery, any amount
In case of supply of industrial raw materials to a
4% 3%
manufacturer

Raw material has been defined.

Cost
Cost of doing business
reduction will consumers
to ultimate decrease.
Direct Tax [u/s 89 Rule 3]
 WHT on supply from distributor

Particulars Previous New Will increase

Tax shall be
(Value of supply * 7% * (Value of supply * 5% 43% increase in
deducted u/s 89 on
5%) – WHT u/s 94 * 10%) – WHT u/s 94 effective tax
supply of goods

Such tax is non-refundable.

Direct Tax [u/s 89 Rule 3]

 WHT on Supply from Distributor
Example
Distributor “X” paid Tk. 200,000 to the manufacturer for supply of cosmetics product. The
manufacturer collected BDT 375 as tax u/s 94 from “X”. Subsequently “X” supplied the
cosmetics product to “Y”.
Tax shall be deducted u/s 89 as follows:

Previous New
A 375 (TCS u/s 94) 375 (TCS u/s 94)

B 700 (200,000*5%*7%) 1000 (200,000*5%*10%)

B-A 325 625

43% Increase in
Effective Tax
Direct Tax [u/s 94]
 WHT from freight forward agency commission

Previous New

Commission 10%
TDS rate 15% U/S 90 (Local)
U/S 124 (Export)
Gross Bill 2.5%

Rationalizing WHT from freight

forwarders

Direct Tax [u/s 90 & 124]

 WHT reduced on Local LC (Essential commodities)

Type of Goods Previous New

Essential Commodities except all types of

2% 1%
Fruits, Computer and Computer parts

Cost reduction for final

consumers
Direct Tax [u/s 97]
 WHT from payments by Cellular Mobile Phone
Operators

Particulars Previous New

Revenue distribution or any license fee or any other
fee or charge to regulatory authority 10% 20%

Telecom will have to deduct higher

tax from BTRC payment. Non-PSR
will have more TDS impact

Direct Tax [u/s 98]

WHT from interest on savings and fixed deposit

Particulars Previous New

Trust, AOP 10% 20%
Where the payee is a recognized provident fund,
approved gratuity fund, approved superannuation 5% 10%
fund or pension fund
Primary Educational Institution 20% 10%

Tax burden will be increased for trust &

AOP by 10% and funds by 5%

Direct Tax [u/s 102]

 WHT on Outward Remittance
TDS on payment to non-residents shall not be applicable for the following cases:
• Payment made to any authority of the foreign country.
• Payment for subscription fee of professional body
• Expenses of liaison office
• International product development & marketing expense.
• Tuition fees
• Any type of security deposit.

Reduced hassle in making outward

remittance and reduced tax burden

Direct Tax [u/s 119 Rule 5]

 Expansion of Table 6 of TDS Rule

➢ Additional 26 items have been included in Table 6 of TDS rules

leading to a reduced rate (3%) of AIT for more importers.

➢ The rule is now applicable only to VAT-registered producers

with an industrial IRC.

New items includes, among others:

• Milk & Cream
• Talc Reduced Tax Burden for
• Aluminium Foil Importer with Industrial IRC

Direct Tax [u/s 120 Rule 8]

 WHT from Inward Remittance
Particulars Previous New
Fee, Service Charge, Remuneration in
connection with any service or revenue 10% 7.5%
sharing

• No WHT on inward remittance for any donation or grant received by Education & research
institute.
• No WHT on inward remittance for fund received by charitable organisations for charitable
purpose.

• Encouraging remittance through formal channel

(positive impact on Forex reserve)
• Disparity when comparing 1% WHT on export of
goods
Direct Tax[u/s 124]
 WHT from transfer of securities

Particulars Previous New

Inclusion of placement shareholder,
5% 10%
Sponsor Shareholder, Director

Tax burden will increase for the

promoter shareholder

Direct Tax [u/s 135]

 Application Non-Deduction Certificate

While participating in a tender if TDS is included

in the quoted price or contract then the TDS
exemption will not be applicable for the entity
even though it has the exemption certificate Non-Deduction
Certificate

Increased challenge to avail exemption

for suppliers under contract

Direct Tax [Rule 12 of STR]

 Introduction of new Withholding Entities

Revenue: More than 1 crore

Hotel Convention
Center

Restaurant Motel
Tax net widened by introducing new
withholding entity

Will be considered as
withholding entity

Direct Tax [u/s 140]

 Widened scope of Minimum Tax

Tax collected under section 89

from the following persons-
Will be applicable for AY 2025-2026
(a) any oil company contractor or, as
may be prescribed, a sub-contractor of
any oil company contractor;

(b) oil marketing companies and their

dealers or agents, but shall not include
petrol pump stations;

(c) any company engaged in oil refining; More burden for oil/gas contractors, gas
distribution & Transmission Companies.
(d) any company engaged in the For oil refinery although TDS reduced, it
transmission or distribution of gas will be minimum tax now.

Direct Tax [u/s 163]

 Collection of tax from transfer of assets
Table-1
Serial New Previous
All Mouza under ‘Sadar’, ‘Rupganj’ police station of
All Mouza under ‘Sadar’ police station of Narayanganj
Serial 4
Narayanganj All Mouza under ‘Joydebpur’ police station of
Gazipur
Serial 5 ‘Sadar’, ‘Basan’ of Gazipur ‘Kaliganj’, ‘Sadar’, ‘Basan’ of Gazipur
Under Dhamarai Police Station
All Mouza under ‘Joydebpur’ and ‘Kaliganj’ police
Serial 6 station of Gazipur Under Dhamarai Upazila
All Mouza under ‘Rupganj’ police station of
Narayanganj
(d) Registration of Deed of Partition through
(d) Registration of Deed of Partition inheritance or succession
Sub-rule 5
(f) Deed without any consideration, such as gift, will, (f) Deed without any consideration, such as heba, gift,
bequest or exchange will, bequest or exchange
Sub rule – 8 (g) Commercial Plot (g) Definition of Developer
(h) Commercial Area

Direct Tax [u/s 163]

 Widened scope of Minimum Tax

Will be applicable for AY 2025-2026

Ceramic Product Milk Powder

Higher tax Impact on Powder Milk,

Aluminum, Ceramic Industries although
TCS rate reduced for certain items.

Aluminum Product

Direct Tax [u/s 163]

 Widened scope of Minimum Tax
An export-oriented ceramic company with having taxable income of Tk. 1,000,000, Sales of Tk. 10,000,000
(60% of which is Export and 40% local Sales) and Import of Tk. 5,000,000

Sales 10,000,000
Income from Export 600,000
Income from local sales 400,000
Taxable Income 1,000,000

Computation of Tax Liability Rates Amount

Tax on export Income 12% 72,000
Tax on Local Sales 25% 100,000
Total tax liability 172,000
Minimum Tax u/s 163(2) 510,000
Import Stage u/s 120 [5,000,000@5%] 250,000
Export Stage 123 [6,000,000@1%] 60,000
Local sales [4,000,000@5%] 200,000
Will adversely impact the
Higher of Regular Tax and Minimum Tax u/s 163(2) 510,000 Ceramic industry
Minimum Tax on Gross Receipt 163(5) 28,800
Total tax liability 510,000
Effective Tax Rate 51.00%

Direct Tax
 Minimum Tax on sweetened beverage manufacturer

Previous New Particulars Amount

Revenue 25,000,000
Profit before tax (Margin 10%) 2,500,000
Corporate income tax @ 25% 625,000
0.6% 3% Minimum tax @ 3% on revenue
Effective tax rate
750,000
30%

Tax burden increased by 500% for the

sweetened beverage manufacturer

Direct Tax [u/s 163]

 Minimum tax eligible for adjustment with prior year
refund
Service Industry Manufacturing Industry
Particulars Amount Particulars Amount
Revenue 10,000 Revenue 10,000
Cost 70% 7,000 Cost 70% 7,000
Profit before tax (PBT) 3,000 Profit before tax (PBT) 3,000
Calculation of tax liability Calculation of tax liability
a) Minimum tax u/s 163(2)(TDS @ 10%) 1,000 a) Minimum tax u/s 163(2)(TDS @ 5%) 500
b) Regular tax at (PBT*25%) 750
b) Regular tax at (PBT*25%) 750
c) Tax on gross receipt (Revenue*0.6%) 60 c) Tax on gross receipt (Revenue*3%) 300
Higher of a, b and c 1,000
Higher of a, b and c 750
Refund of previous year 500
AIT [163(2)] 500
Not Eligible for claiming refund
Refund of previous year 200
Net Tax Liability 50
Not Viable for
Service Industries
Loss Making Company
can avail the benefit of
Direct Tax tax refund
 Basis of Minimum Tax Consideration

Regardless of actual
deduction/collection, Applicable AIT Companies need to keep proper
should be considered Minimum tax. accounting records for AIT

More hassle for companies to

maintain the compliance
Direct Tax [u/s 164]
 Basis for Minimum Tax Calculation
Excess Deduction Less Deduction

Particulars Amount Particulars Amount

Revenue 1,000,000 Revenue 1,000,000
a)Tax paid u/s 89 50,000 a)Tax paid u/s 89 50,000

b)Actual AIT paid 48,000 b)Actual AIT paid 52,000

Actual Minimum Tax 50,000 Actual Minimum Tax 50,000
Additional tax liability (a-b) 2,000 Additional tax liability/(Refund) (a-b) (2,000)

The additional tax of Tk. 2,000 is The additional tax paid of Tk. 2,000 can be
required to be paid adjusted against tax at subsequent period

Ultimate Minimum Tax Liability is 50,000

More hassle for companies

Direct Tax to maintain the compliance
 Submission of Assets & Liabilities Statements

Must submit
the asset
liability
statement
Individuals having total
Govt. employees
asset more than Tk. 50 lakh

• Enhances transparency and accountability

within the public sector
• Some relief for the individual taxpayers
other than Govt. employee

Direct Tax [u/s 167]

Return Submission under Universal Self Assessment

Individual Firm

Return must be submitted under

Universal self Assessment by all
Taxpayers excluding return filling
AOP Trust u/s 212(3) & 182(10)

Simplification of return
Fund Company submission for all Taxpayers

Direct Tax [u/s 170]

Additional Tax for delay submission of return

4% Previous New
Calculation: Calculation:
A= 100 x (1+0.04×2) A= 100+(100-75) ×2 ×0.02
=108 =101
Additional Tax Liability Tk. 8 Additional Tax Liability Tk. 1
2%
• Additional Tax burden decreased
• Possibility of miss-calculation

Direct Tax [u/s 174]

Deadline of Withholding Tax Return extended

Callender

Time Petition

• Allows more time for the preparers

• Missing deadline will attract penalty

Direct Tax [u/s 177]

 Special provision for Revised Return submission

1. Following audit report issued

Submission of from audit curator u/s 182
Will be
considered a
2. Following notice issued u/s
revised return 212 for escape payment
Normal return

• Tax will be imposed at a regular rate

• No provision to file revised return following
appeal & tribunal order
Direct Tax [u/s 179]
 New criteria for audit selection

Non-submission of bank statements for Loan

more than Tk. 5 lacs borrowed from other
than any Bank and Finance Company.
> 5 Lacs Other than Bank &
Finance Company

Bank Statements need to be submitted with

return which will deter Audit selection

Direct Tax [u/s 182]

 Amendments in “Limitations for Assessment”

Assessment or Return process shall be completed before the expiry of

When considered Assessment needs to be completed

as within 1 year
Normal Return

Earlier it was 6 months

Completion of Assessment will be

prolonged

Direct Tax [u/s 197]

 Mandatory PSR Submission

➢ Obtaining and Renewing licenses of hotels, restaurants, motels,

hospitals, clinics and diagnostic center
➢ Services from community centers, convention hall or similar nature
located within the City Corporation Area

Increased Tax net

Direct Tax [u/s 264]

 Penalty for not displaying PSR

Previous Penalty New Penalty

Minimum Tk 5,000 Minimum Tk 20,000
Maximum Tk 20,000 Maximum Tk 50,000

Will ensure better compliance

Direct Tax [u/s 265]

Extension of Tax day

Board may extend Tax day by order for 1 month

without Government’s approval.

Relief for taxpayers

Direct Tax [u/s 334]

 New Provision on Gifts received

Gifts received from spouse, parents and child to be

disclosed in Return of both receiver & donor.

Gifts remitted from abroad through banking channel

exempt from disclosure in donor’s return.

Increased transparency
of transactions

Direct Tax [Para 34, 6th Schedule

 More scope for Income from other Sources

• Earned income from transfer of any asset (except

mineral deposits, hydrocarbons and goodwill), whether
natural or self-made.
• Donation, grant, or gift, called by whatever name
(Except gifts from/to spouse, parents & children.) More clarity on the taxability and
classification of income from Other
sources

Direct Tax
 Example of Tax impact on Gift/Donation
Mr. A had 20 decimal of land having fair value of BDT 20 million (acquisition price BDT 8 million on 1st January
2015). He gifted/donated 10 decimal each to his brother and wife on 1st July 2024. Implication of the transaction for
the owner and the recipient is as follows:

Implication for recipient Previous New

Brother/Wife Brother Wife

Income from other sources u/s 67 Ambiguous 10 0 (Spouse is exempt from

gift tax as per para 34,
part 1, 6th schedule)
Tax (Assuming slab rate is 25%) Ambiguous 2.5 0

Direct Tax
 Minimum Tax on Gross Receipt for Trusts

Earlier New

Excessive burden on Trust

No Minimum Tax was
applicable 0.6%

Direct Tax
 Capital Gain Tax for Fund and Trust

15% Capital gain Tax will be

applicable for Funds and Trust

Previously tax was applicable based

on regular rate

Direct Tax [7th Schedule]

 Capital Gain Tax for Fund and Trust
XYZ trusts. sold a land at its fair value for BDT 200,000 which was originally purchased
for BDT 100,000 one year ago. What is the tax impact of the transaction?

Particulars New Existing

Amount Amount
Fair Value 200,000 200,000
Acquisition Price (100,000) (100,000)
Capital Gain 100,000 100,000
Tax rate 15% 27.50%
Tax 15,000 27,500
Decrease in tax liability -45%

Direct Tax
 Disclosing the Undisclosed Assets
SL.
Description of Assets Tax rate
No.
(1) (2) (3)
Specific Rates depending on
1. Assets mentioned in Table 1
location
Securities, cash, deposits in banks, financial schemes
15% of total assets
2. and instruments, all types of deposits or saving
(Fifteen percent)
deposits

Serial No. 1 of Table-2 and 15% (Fifteen percent) of the

3.
in respect of any such asset not mentioned in Table-1 fair market value of the asset

Conditions
Hi-Tech Park • Depreciation/Amortization not Encouraging taxpayers to
allowed disclose the undisclosed
• Tax rate will be 100% higher for assets
commercial purpose (Table 1, 3rd
Direct Tax [Part 3 of 1st Schedule]
Schedule)
 Disclosing the Undisclosed Assets
XYZ Limited's total asset is BDT 100 Million as per audited financial statements in DVS system as on 30th June
2023. However, it has undisclosed FDR of BDT 10 Million earned in income year 2022-23 and before. Now XYZ
limited wants to disclose the amount of FDR. Here's the implication-

Amount
Particulars
(Million)
Undisclosed FDR 10
Tax (@15%) 1.5

Direct Tax [Part 3 of 1st Schedule]

 Amendments in Fourth Schedule

Formula for computation of income from life

insurance business has been introduced.

Computation Process has been

made Easier

Direct Tax
 No More Depletion Allowance for Oil & Gas

Depletion Allowance for the

exploration and production of Oil
and Gas will not be allowed

Tax Burden for Oil and Gas

companies will increase

Direct Tax [5th Schedule]

 Service Charge of Microcredit Organization

• Service Charges can’t be used for any other

purpose other than revolving microcredit
• Imposition of tax on Non-Revolving amount
• Applicable from AY 2026-2027

• Explicit clarification
• Encouragement for revolving loan

Direct Tax [Para 13, Part 1 of 6th Schedule]

 Service Charge of Microcredit Organization
XYZ Microcredit Organisation earned service charge of Tk. 5,000,000 out of which it
used Tk. 4,000,000 as revolving loan. What will be the tax implications?

New Previous
Particulars
Amount Amount
Service charge 5,000,000 5,000,000
Revolving loan (4,000,000) (4,000,000)
Non-revolving fund 1,000,000 1,000,000

Taxable amount 1,000,000 0

Tax rate 25% 25%
Tax liability 250,000 -

Direct Tax
 ITES Tax Exemptions up to 30 June 2027

Mandatory conditions from 1 July 2024

➢ AI Based Solution Development
• All revenue through Banking Channel
➢ Blockchain Based Solution Development
• All expenses & investments through
➢ Software as service
Banking Channel
➢ Data science
➢ Geographic Information Service

➢ Nationwide Telecommunication Transmission Network

(NTTN);
➢ Cloud service;
➢ System Integration;
➢ Overseas medical transcription;
➢ Search engine optimization services
➢ Graphic information service
New Investment
➢ Web hosting Opportunity in new sector
➢ IT Process Outsourcing

Direct Tax [Part 1, 6th Schedule]

 Tax on Beneficiary of Trust

Particulars Amount
Income from Trust 1,000,000
Tax @ 27.5% 275,000
Surplus Fund 725,000
Distribution of surplus funds
Beneficiary 1 (33.33%) 241,666
No further
Beneficiary 2 (33.33%) 241,666
Tax
Beneficiary 3 (33.33%) 241,666

Tax burden of beneficiaries of trust

has been withdrawn

Direct Tax [Para 15, 6th Schedule]

 Capital Gain tax for Individuals

Capital Gain
from Listed Tk. 50 Lacs
Securities

• Higher Tax Incidents for large gainer

• Investment might be reduced in Listed
shares

Direct Tax [Para 35, 6th Schedule

 Capital Gain tax for Individuals
Mr. A has investments in stock market. During the year, he made capital gain of BDT 80 Lac
from the sales of share of XYZ Ltd and made a capital loss of BDT 20 Lac from the sales of
share of ABC ltd. What will be the capital gain tax?

Particulars Previous New

Gain From Sales N/A 80
Loss from Sales N/A -20
Net Gain N/A 60
Exempted N/A -50
Taxable Gain N/A 10
Tax rate 15% [sales after 5 years] N/A 15%
Capital gain tax N/A 1.5

Direct Tax
 Capital Gain tax for Individuals
Mr. A is a shareholder of XYZ PLC which is listed on the DSE. He sold 10,000 shares for Tk.
10,000,000. He acquired the share for Tk. 3,000,000 six years ago. What is the tax impact of the
transaction?

New Previous
Particulars
Amount Amount
Fair Value 10,000,000 10,000,000
Acquisition Price (3,000,000) (3,000,000)
Capital Gain 7,000,000 7,000,000
Exempted 5,000,000 7,000,000
Taxable capital gain 2,000,000 -
Tax rate 15% 15.00%
Capital gain tax 300,000 -

Direct Tax
 Tax on companies exempted from Return submission

➢ Tax @ 20% shall be levied and paid on

the Gross Income of companies
exempted from return submission

➢ Following income will be excluded

from gross income:
(a) Exempted income;
(b) any donation;
(c) any taxes, rates, and duties; • Increased Tax net
➢ This provision will not be applicable • How will they pay Tax??
NBR yet to publish
for organizations without PE in BD guidelines

Direct Tax [Para 4,7th Schedule]

 SRO – 155/Ain/IT/ 2024

Exempted Organizations
All Incomes are
1. Oncology Club, exempted, except:
Bangladesh Exempted for 3
Interest Income years
1. Obstetrical and Dividend
Gynecological Society Capital Gain
of Bangladesh (OGSB)

Direct Tax [SRO]

 Tax Exemption for EZ Developers

SRO - 227/AIN/IT/2015

Reduced tax rate for incomes earned by

Developers for the purpose of
constructing industries within
Bangladesh Economic Zones.

But existing beneficiaries will enjoy • Tax applicable at regular rate

benefits till tenure. • Lack of attractiveness for
developing EZs

Direct Tax [SRO]

 Tax Exemption for Entities located at EZs
Period of Exemption Rate of Exemption
SRO – 159/AIN/IT/2024
For the first, second & third year 100% of income tax
Income earned from business operated
For the fourth year 80% of income tax
in Economic Zones shall be enjoying tax
For the fifth year 70% of income tax
exemption.
For the sixth year 60% of income tax
*Repealed SRO – 104/2020, but For the seventh year 50% of income tax
existing beneficiaries will enjoy benefits For the eighth year 40% of income tax
till tenure. For the ninth year 30% of income tax
For the tenth year 20% of income tax

• Must be a Newly formed company

• No other units outside EZs
New opportunity for more • Existing units & the companies that
companies and FDI signed agreement with BEZA will keep
enjoying the benefits

Direct Tax [SRO]

No Tax Exemptions of Expat Employee Salary

SRO - 298/AIN/IT/2015

50% tax exemption for 3 years, on income

earned by expats by rendering Technical
Assistance in companies, located at
Economic Zones.

Direct Tax [SRO]

 Tax Exemptions on Dividend, Capital Gain,
Royalties, and Technical Fees

SRO - 299/AIN/IT/2015 (EZs)

EZs (100%) used to enjoy tax exemptions

for 10 years on:

• Declared dividend
• Capital gain earned by its share trading • Tax to be charged at regular
• Payable Royalties, Technical know-how, rate applicable
and Technical assistance fee. • Demotivation for new
investors
• Reduces FDI flow

Direct Tax [SRO]

 Tax Exemptions for Developers at Hi-Tech Parks

SRO - 229/AIN/IT/2015

Reduced tax rate for developer engaged

for the purpose of constructing
industries within in Hi-Tech parks for
• Tax applicable at regular rate
12th years.
• Lack of attractiveness for
But existing beneficiaries will enjoy developing Hi-Tech parks
benefits till tenure.

Direct Tax [SRO]

 No Tax Exemptions on Dividends by Developers
of Hi-Tech Parks

SRO - 302/AIN/IT/2015

Tax on Dividend declared by developers

engaged in Hi-Tech Parks was
exempted for 10 years.

Direct Tax [SRO]

 Tax Exemptions at Entities located at Hi-Tech Parks

Period of Exemption Rate of Exemption Period of Exemption Exemption Rate

For the first, second & third year 100% of income tax
For the 1st to 7th year 100% of income tax
For the fourth year 80% of income tax
For the fifth year 70% of income tax For the 8th to 10th year 70% of income tax
For the sixth year 60% of income tax
For the seventh year 50% of income tax
For the eighth year 40% of income tax
For the ninth year 30% of income tax • Must be a Newly formed company
For the tenth year 20% of income tax • No other units outside Hi-tech park
• Existing units and entities that received
approval from Hi-tech park authority will
SRO – 160/AIN/IT/2024 keep enjoying the benefits
Income earned from business operated in Hi-
Tech parks shall be enjoying tax exemption.

*Repealed SRO – 228/2015, but existing

beneficiaries will enjoy benefits till tenure.
New opportunity for more companies
Direct Tax [SRO] and FDI
 Tax Exemption for Certain Manufacturers

• SRO 246/2024 modified SRO 325/2021 which was related to the freezer, refrigerator,
motorcycle, air conditioner and compressor industry.
• This SRO entails them to pay tax at a reduced rate of 10%.
• But there was a strict condition to invest 10% of exempted income within 3 years from the end
of income year.
• SRO 246/2024 has withdrawn this investment condition.
• These companies will no longer be required to invest 10% investment of exempted income on
that company

• Industries will get the flexibility in

using the fund.

Direct Tax [SRO]

 No Tax Holiday for Physical Infrastructure

Tax holiday facility for Physical infrastructures

has been abolished

Clarification required
for existing
beneficiaries

• Reduced investment on infrastructure

• Demotivation to new businesses

Direct Tax [SRO]

 Changed Slab Rate for Personal Tax

t ive
c
Assessment Year 2023-2024 Assessment Year 2024-2025 spe Assessment Year 2025-2026
o
Income slab Tax rate Income slab Tax rate Pr Income slab Tax rate
On first 350,000 0 On first 350,000 0 On first 350,000 0
Next 100,000 5% Next 100,000 5% Next 100,000 5%
Next 300,000 10% Next 400,000 10%
Next 400,000 10%
Next 400,000 15% Next 500,000 15%
Next 500,000 15%
Next 500,000 20% Next 500,000 20%
Next 500,000 20%
Remaining 25% Remaining 25%
Next 2,000,000* 25%
Remaining 30%
*It was 30 Lacs in AY 2019-20

Direct Tax
VAT & SD
 Expansion of Withholding Entities

Person with 10
Crore+ annual
turnover will be
considered as
Withholding • The areas of VDS will be expanded
• VDS Audits will also be increased significantly
Entity. • Increase of VAT net

How to assess the

turnover is unclear

VAT & SD
 Transition towards Single Rate
VDS Rate increased to Standard Rate
Service Service Name VDS Rate
Code
S 009.00 Auction Firm 15%
S 040.00 Security Service 15%
S 060.00 Buyer of Auction Goods 15%
S 066.00 Lottery Ticket Seller 15%

NBR is likely to generate more

revenue from VDS

VAT & SD
 NBR’s Authority to appoint VAT Officers

Existing New
The Board is authorized to appoint The Board is empowered to appoint
the VAT officers, determining their the VAT officers, determining their
local jurisdiction and outlining their local jurisdiction and outlining their
responsibilities, duties, powers and responsibilities, duties, powers and
functions through official Gazette. functions by an order.

Facilitates smooth management

of VAT Administration

VAT & SD
 Enhanced Power of the Top Officials

The Board's powers and functions can

be exercised by the Chairman or the
Member (VAT)
EMPOWERMENT

➢ No separation between the Management

and Governance of the Board
➢ Conflict of interest may arise

VAT & SD
 Deposit of Disputed VAT reduced - Appeal & Tribunal

Percentage of the disputed tax

required to be deposited
20%
VAT & SD

10%
• Relief for the taxpayers to challenge the
decision of the authority
• Seeking Justice becomes less expensive

VAT & SD
 Bar to file cases under other laws

New
Taxpayers will be barred from filing
cases against the Board or any VAT
officer under any other laws than the
A taxpayer can bring proceedings VAT Act
against certain VAT officers under
other laws than the VAT Act

Existing

VAT Administrations’ efficiency

will be improved

VAT & SD
Recent Inclusion of Supplementary Duty (Import stage)

Product Name H.S Code SD Rate

Racks of a kind used in the

pharmaceutical laboratory
9403.20.20 20%
imported by VAT registered
pharmaceutical industries

Furniture of a kind used in

pharmaceutical laboratory
9403.60.10 20%
imported by VAT registered
pharmaceutical industries

➢ Cost of production will be higher

for Pharma industries
➢ Price of Pharma products is likely
VAT & SD to be increased
 Withdrawal of Supplementary Duty (Import Stage)

Product Name H.S. Code

0402.21.10
Powder Milk Retail Packing (Up to 2.5 KG) 0402.29.10
Supplementary
Hazelnuts or filberts (Corylus spp.)-In shell-Wrapped/canned up
to 2.5 kg
0802.21.10 Duty
0808.40.10
Quinces (Wrapped/canned up to 2.5 kg) & Quinces (Other) 0808.40.90
Plums (Wrapped/canned up to 2.5 kg) 0809.40.11
Plums (Other) 0809.40.19
Sloes (Wrapped/canned up to 2.5 kg ) 0809.40.91
Sloes (Other) 0809.40.99

Price of related goods is likely to decrease

VAT & SD
 Withdrawal of Supplementary Duty (Import Stage)

Product Name H.S. Code

0206.30.10
Edible offal of bovine animals, Swine, Sheep, Goats, Horses, 0206.30.90
Supplementary
0206.41.10
Asses, Mules or Hinnies fresh or chilled (Wrapped/canned up to 0206.41.90 Duty
2.5 kg ) 0206.49.10
0206.49.90
0207.11.10
0207.11.90
Meat, and edible offal, of the poultry of heading 01.05, fresh, 0207.12.10
0207.12.90
chilled or frozen 0207.13.10
0207.13.90
0207.14.90

Tracksuits and other garments (excluding tailored garments and 6211.32.00

6211.33.00
ski suits) 6211.33.39

Chiller, capacity 50 tons or above 8418.69.97

Price of related goods is likely

to decrease
VAT & SD
 Rise of Supplementary Duty (Supply Stage)

Product/Service Name H.S Code Previous Rate New Rate

All type of Ice-Cream 21.05 5% 10%
Carbonated Beverages 2202.10.00 25% 30%
2202.99.00
Tobacco-containing cigarettes 2402.20.00 65% 66%

Supplementary Duty

Price of the related goods will be

costlier for consumers

VAT & SD
 Supplementary Duty Increased for Mobile users

Supplementary Duty
Increased
for the services
Mobile communication will
on
become costlier for Users
Any Service provided
through Sim/Rim

VAT & SD
 Reduction of Supplementary Duty (Import stage)
Product Name H.S Code Previous Rate New Rate
Overcoats, car-coats, capes, cloaks, anoraks
61.01 30%
(including ski-jackets), windcheaters, wind- 45%
61.02
jackets, and similar items
Men's Clothing - Suits, ensembles, jackets,
61.03 45% 30%
blazers, trousers and similar items
Women's Clothing:- Suits, ensembles, jackets,
61.04 45% 30%
blazers, dresses, skirts and similar items

Supplementary Duty
Reduction of

VAT & SD
 Reduction of Supplementary Duty (Import stage)
Product Name H.S Code Previous Rate New Rate
Unisex and General Items :
T-shirts, singlets, and other vests, Jerseys, pullovers,
cardigans, waistcoats, and similar items, Children's 61.05 45% 30%
garments and clothing accessories, Other knitted or
crocheted clothing accessories
All types of ready-made clothing for men, women, 62.12
and children (excluding swimwear), Brassieres, 62.13
girdles, corsets, braces, suspenders, garters, 62.14
45% 30%
handkerchiefs, shawls, scarves, mufflers, mantillas, 62.15
veils, ties, bow ties, cravats, gloves, mittens, and 62.16
similar clothing accessories and their parts 62.17

Price of imported ready-made clothing &

personal belongings will be reduced

VAT & SD
 VAT Rate on the Rise
H.S Code/ Product/Service Name Previous New
Service Code Rate Rate

S060.00 Buyer of auctioned goods 7.5% 15%

S064.10 Amusement Park and Theme 7.5% 15%
Park
S009.00 Auctioneer Organization 10% 15%
S013.00 Mechanical Laundry 10% 15%
20.08 Mango Bar 5% 15%
20.09 Mango Juice, pineapple juice, 5% 15%
Guava juice, Tamarind Juice
8539.31.10 Energy Saving Bulb of more 5% 15%
than 50 Watt Price of the related goods & services
will be costlier for consumers
8539.31.10 Tube light (18 Watt & 50 Watt) 5% 15%
48.13 Cigarette/ Biri Paper 7.5% 15%

VAT & SD
 VAT Rate on the Rise
H.S Code/ Product/Service Name Previous Rate New Rate
Service Code (BDT) (BDT)

Non-Automated Bricks 450 500/Thousand

Automated Bricks 500 600/Thousand
69.04 Automated Bricks
Grade 1 700 800/Thousand
Grade 2
Brick Chips 700 800/Hundred CFT
Mikad Bates 500 600/Hundred CFT
300/SIM Card/
S012.20 E-SIM Supplier 200
e-SIM

Price of the related goods & services

will be costlier for consumers
VAT & SD
 Amendment in Tax Invoice (Mushak-6.3)

Existing New
For a supply of more than BDT For a supply of more than
25,000, furnishing BIN number BDT 25,000, furnishing BIN
of the buyer was mandatory number of the buyer is optional

➢ More practical
➢ Less compliance hassle
VAT & SD
 Extension of Exemption Facilities

Manufacturing Industry Exemption Validity

Raw Materials of Diaper and Sanitary Napkin 30 June, 2025

Refrigerator and Freezer Manufacturing 30 June, 2025

Optical Fiber Cable 30 June, 2027
LABSA & SLES (Soap and Shampoo Raw
30 June, 2025
Materials)
Locally Manufactured Mobile Phones 30 June, 2025
L.P.G Cylinder 30 June, 2025
Facilitating local
manufacturing industries &
reducing production cost

VAT & SD
 VAT Increased on Locally Manufactured Goods

Product Name Stage Previous Rate New Rate

Refrigerator &
Local Manufacturing 5% 7.5%
Freezer
Air Conditioner Local Manufacturing Exempted 7.5%

Lower and Middle Income

group will suffer the most

VAT & SD
 Newly Introduced Advance Tax Exemption

Ethylene glycol (ethanediol) Terephthalic acid imported by

imported by Industrial IRC Industrial IRC holder VAT
holder VAT compliant PET chips compliant PET chips
manufacturing industry manufacturing industry
(H.S. Code 2905.31.10) (H.S. Code 2917.36.10);

Facilitating local manufacturing

industries & reducing
Chiller, capacity 50 tons
production cost
or above
(H.S. Code 8418.69.97)

VAT & SD
 Newly Introduced Exemption on Purchase of Raw
Materials & Spare Parts

Local manufacturers of Local manufacturers of

Computer Accessories & IT Compressor & Air Conditioner
Products

Facilitating local manufacturing

industries & reducing
production cost
VAT & SD
 Newly introduced Exemption at Import Stage
through SRO
H.S Code Description New Rate
2905.31.10 Ethylene glycol (ethanediol) imported by industrial IRC
Exempted
holder VAT compliant PET chips manufacturing industry.
2917.36.10 Terephthalic acid imported by industrial IRC holder VAT
Exempted
compliant PET chips manufacturing industry.
8409.10.00 Parts of aircraft engines Exempted
8411.21.00 Turbo-propellers Exempted
8411.22.00 Turbo-propellers Exempted
8411.91.00 Parts of turbo-jets or turbo-propellers Exempted
8412.10.10 Aircraft engines Exempted
8412.90.10 Parts of aircraft engines Exempted
8418.69.97 Chiller capacity of 50 tons or above Exempted

RMG sectors & related industries are

likely to be benefited

VAT & SD
 Changes in Exemption at Service Stage through SRO

Service Code Description New Rate

S037.00 Locally collected aluminum waste and scrap by Exempted
aluminum utensil manufactures

Service Code Description New Rate

S077.00 Tour Operator 15%

➢ Aluminum utensil manufacturers will be promoted

➢ Growth of Tour operators will be discontinued
VAT & SD
Customs
Customs Act, 2023

Activities of Gadgette for the

Effective of
01 Implementation of 02 ‘Customs Act, 03 Customs Act, 2023
‘Customs Act, 2023’ 2023’ was
started published

2014 Oct 25, 2023 June 06, 2024

Customs
 Salient Features of Customs Act, 2023
Ensure International Best
01 Practice and Standards 03
WCO Revised Kyoto Convention
WCO Safe Framework of Standards

WTO Trade Facilitation Agreement

Easy to implement, Transparent &
Ensure ease of doing business
02 Accountable & Bengali Language

Co-operation of WB, ADB

and USAID 05

Act is framed by NBR

04
Customs
 Maintained International Best Practices

Advance Ruling

National Enquiry Point

Authorized Economic Operator

Customs
Risk Management
Act,
2023
Single Window

Post Clearance Audit

Non-Intrusive Inspection (NII)

Customs
Continuation of the Customs Act, 1969

The rules, regulations, notification, order or record issued

under the Customs Act, 1969 will prevail unless it
contradicts with the Customs Act, 2023

Customs
Act, 2023 Customs
Act, 1969

Customs
Refund or Repayment

Customs Act, 2023 Customs Act, 1969

Refund for overpaid
Refund for overpaid
duty can be claimed
duty can be claimed
within 03 years within 06
months

➢ Significantly longer window to identify

overpaid duty taxes and appeal for refunds
➢ Reduce the risks of losses

Customs
Electronic Scanning

Any goods not exempted

from scanning through
official gazette notification
shall not be exempted from
the control of Customs for
domestic consumption or
warehousing or for export to
any place outside Bangladesh ➢ Deterrence Against
except by electronic scanning Smuggling
➢ Prompt Clearance
➢ Keeps product intact, safe
and protected

Customs
 Declaration & Clearance

Substitution of Declaration
• Simplifies the process
• Ease of doing business
Amendment & withdrawal of • Transparency
• Opportunities to avoid penalties
Declaration

Self Clearance

Customs
 Charging Interest
Failure to pay the duty, tax & others within 10 days will attract charging
interest:

Interest:
10% on unpaid duty, tax & others
➢ Encourage to maintain compliance.
➢ Extra cost burden for the company.
➢ Discretion power given to Board to exempt interest

Customs
 Amount of Deposit Decreased for filing Appeals

50%
Percentage of the
claimed/imposed tax required
to be deposited
Customs

• Relief for the taxpayers to challenge the

10% •
decision of the authority
Seeking Justice becomes less expensive

Customs
 Reduction of Customs Duty

SL
H.S. Code Descriptions Previous Current
No
1 0801.32.90 Casew Nuts in Shelled in Bulk 15 5
2 2905.11.91 Methanol in Bulk 10 5
Folding Cartoons, boxes and cases, of non-
3 4819.20.10 25 10
corrugated paper and paperboard of aseptic pack
4 5402.53.00 Polypropylene Yearn 10 5
5 8111.00.00 Manganese 10 5
6 8418.69.97 Chiller, Capacity 50 tons or above 20 5
7 8421.29.30 Dialysis Filter 10 1
8 9033.00.10 Dialysis Circuit 10 1

➢ Prices of these products will be reduced

➢ Will flourish overall industries
Customs
 Increase in Customs Duty
SL No H.S. Code Description Previous Current
1 7217.10.00 Wire of iron or non-alloy steel not plated or coated, whether or not polished 10 15
2 7217.20.00 Wire of iron or non-alloy steel Plated or coated with zinc 10 15
3 7217.30.00 Wire of iron or non-alloy steel Plated or coated with other base metals 10 15
4 8409.91.90 Parts of spark-ignition internal combustion piston engines 5 15
5 8421.21.20 Domestic type water purifying apparatus/machine 10 15
Portable automatic data processing machines, weighing not more than 10 kg, consisting
8471.30.00 5 10
6 of at least a central processing unit, a keyboard and a display
7 9028.30.20 Pre-payment KWH meter 15 25
8 9028.30.90 Other Electricity meters 15 25
9 9028.90.20 Parts of Pre-payment KWH meter 10 15
10 9028.90.90 Parts of Other Electricity meters 10 15
11 CNG Conversion kits, CNG Cylinder, LPG Conversion Kit, LPG Cylinders 3 5
12 8414 Compressors for Air-Conditioner & Refrigerator manufacturing 5 10
84.07, 84.05,
Compressor ignition, Generators 0 1
13 86.01
14 7212 Rolled iron or non-alloy steel for Air-Conditioner manufacturing 5-10 10-15

➢ Increase price of wire, water purifying and electricity meters

➢ Price of gas will increase
Customs ➢ AC price will increase
 Increase in Regulatory Duty

SL
Heading H.S. Code Description Previous Current
No
1 8.01 0801.32.90 Cashew Nuts in Shelled in Bulk 0 10
Racks of a kind used in the
2 94.03.20.20 0 20
pharmaceutical laboratory
94.03
Furniture of a kind used in
3 94.03.60.10 0 20
pharmaceutical laboratory

➢ Encourage to produce cashew-nuts locally

➢ Increase forex reserve if we can produce locally
➢ Increase Local employment
Customs
 Changes of Supplementary Duty
SL
H.S. Code Description Previous Current
No
1 0402.10.10 Milk In powder form, in retail packing of upto 2.5 kg 20 0
2 0402.21.10 Milk In powder form, in retail packing of upto 2.5 kg 20 0
3 0402.29.10 Milk In powder form, in retail packing of upto 2.5 kg 20 10
4 1806.90.00 Chocolate 45 20
5 8418.69.97 Chiller, capacity 50 tons or above 30 0
6 9403.20.20 Racks of a kind used in the pharmaceutical laboratory 0 20
7 9403.60.10 Furniture of a kind used in pharmaceutical laboratory 0 20

➢ Decrease the price of powder milk

➢ Prices Racks & Furniture for pharma
laboratory will increase
Customs
 Exemption of VAT

SL
H.S. Code Description Previous Current
No
1 2905.31.10 Mono-Ethylene Glycol (MEG) 5 Exemption
Portable automatic data processing machines, weighing
2 8471.30.00 not more than 10 kg, consisting of at least a central 15 Exemption
processing unit, a keyboard and a display

➢ Boost availability of laptop

➢ Price of laptop will decrease

Customs
 Exemption of AT & AIT

SL AT AIT
H.S. Code Description
No Previous Current Previous Current
1 2905.31.10 Mono-Ethylene Glycol (MEG) 5 0 5 0
2 2917.36.10 Purified Terephthalic Acid (PTA) 5 0 5 0
3 8418.69.97 Chiller, capacity 50 tons or above 5 0 N/A N/A

➢ Production cost of textile items will be increased

➢ Free of working capital
➢ Inward remittance will increase

Customs
 Withdrawal of exemption of Capital Machineries

BEZA Hi-Tech Parks

Materials
Previous Current Previous Current
Capital Machineries 0% 1% 0% 1%
Materials to be used by developers 0% 1% 0% 5%

Current:
Importation of Vehicle by BEZA and Hi-
Tech Parks fully exempted

New Provision:
All duties to be levied except CD

➢ Cost will be increased

Customs ➢ Investment in BEZA & Hi-Tech Parks will be discouraged
Increase of Customs Duty

Materials Previous Current

Medical equipment's 1% 10%
Materials of CC Camera & ATM Machine 1% 5%
Prefabricated building structure 5% 10%
Import of materials for Rampal Power Plant 0% 5%
Laptop computer and similar 5% 10%
products available

Increase cost of medical equipment's,

CC Camera, building structure and
electricity
Customs
Split of H.S. Code
29.05.11.91 Methanol in bulk
2905.11.90
29.05.11.99 Others

3304.99.10 Face and skin cream

3304.99.20 Moisture lotion

2905.11.90
3304.99.30 Petroleum jelly

3304.99.40 Other

4819.20.10 Of aseptic pack

4819.20.00
4819.20.90 Others

9033.00.10 Dialysis circuit

9033.00.00
9033.00.10 Others
Customs
 Merge of H.S. Code
3901.10.10 Polyethylene having
3901.10.00 a specific gravity
3901.10.90 of less than 0.94

7601.10.10 Aluminum, not

7601.10.00
alloyed
7601.10.90

7318.22.10
7318.22.00 Other washers
7318.22.90

7408.19.10
7408.19.00 Other
7408.19.90

8532.22.10 Aluminum
8532.22.00
8532.22.90 electrolytic

8536.69.10
8536.69.00 Other
Customs 8536.69.90
 New addition of H.S. Code

SL No. H.S. Code Description

1 9018.39.50 Spinal needle
2 2710.19.33 Synthetic lubricating oil
3 8418.69.97 Chiller, capacity 50 tons or above
4 8421.29.30 Dialysis filter
5 9801.00.71 Cellular Smartphone, Value not exceeding 30,000.00 Taka
Cellular Smartphone, Value exceeding 30,000.00 Taka but not
6 9801.00.72
exceeding 60,000.00 Taka
7 9801.00.79 Cellular Smartphone, Value exceeding 60,000 Taka
M.S. Rod/Shaft imported by Industrial IRC holder VAT compliant electric
8 7227.90.10
fan motor or water pump motor manufacturing industry

Customs
Industries getting Advantage & Disadvantage

Industries getting overall Industries getting overall disadvantages

advantages
BEZA & Hi-Tech
Motor-cycle
CNG, LPG, Electricity
Aircraft
Refrigerator
Medicine
Air-condition
Cashew Nuts
CC Camera & ATM Machine
LRPC
Generator

Customs
 Disclaimer!

No part of this presentation may be reproduced, stored in a

retrieval system or transmitted in any form by any means-
electronic, mechanical, photocopying, recording or otherwise-
without prior permission from the presenter.

This presentation is intended to provide information but is not a

substitute of legal or accounting advice.

Disclaimer!
 Directors’ Contact Details

Snehasish Barua, Zareen Mahmud Hosein, Sukanta Bhattacharjee,

FCA (ICAB), ACA (ICAEW) FCA FCA
Director Director Director
snehasish@smac-bd.com mahmud@smac-bd.com sukanta@smac-bd.com
+8801819319319 +8801730022131 +8801729070663

SMAC Advisory Services Limited

House No: 46, Suraia Tower, Progati Sarani Rd, Baridhara J Block, Dhaka, Bangladesh

www.smac-advisory.com