The National Board of Revenue (NBR) has announced a reduction in the capital gains tax on profits from the sale of shares in listed companies on Bangladesh’s stock exchanges, aiming to make the market more attractive to both domestic and foreign investors. Under the new NBR notification, a flat 15 percent tax rate will apply to capital gains exceeding Tk 50 lakh from trading listed shares. Previously, capital gains from shares sold within five years of purchase were taxed at the regular rate, with a maximum capital gains tax rate of 30 percent on amounts above Tk 50 lakh. Income tax return submission deadline may be extended: NBR Chairman Additionally, wealthy taxpayers will still be subject to a surcharge based on their net worth. This surcharge ranges from 10 to 35 percent, depending on the taxpayer’s net assets: - Net assets above Tk 4 crore: 10 percent surcharge on tax payable - Above Tk 10 crore: 20 percent surcharge - Above Tk 20 crore: 30 percent surcharge - Above Tk 50 crore: 35 percent surcharge For example, a taxpayer with net assets exceeding Tk 50 crore will face a 15 percent tax on capital gains above Tk 50 lakh, along with a 35 percent surcharge on this tax, resulting in a total effective rate of 20.25 percent. NBR embraces data automation, upgrading system to international standards This revised tax framework, applicable from July 1, 2024, to June 30, 2025, significantly lowers the maximum effective rate for capital gains from 40.50 percent to 20.25 percent for eligible taxpayers. NBR officials anticipate that the streamlined tax policy will increase investment in Bangladesh's stock market, promoting growth and liquidity.

The National Board of Revenue (NBR) has initiated steps towards data automation, aiming to implement an international-standard risk analysis system to better identify tax evaders.              To support this effort, the revenue authority is prioritizing the collection of taxpayer data, which will be essential for applying risk management analytical tools. “We have issued instructions to follow international risk analysis standards in identifying tax evaders,” said NBR Chairman Md Abdur Rahman Khan in a recent press briefing. However, he stressed that obtaining accurate taxpayer data is a prerequisite for implementing these measures. “Once we have the necessary data, we can proceed with programming the system to target appropriate cases, ensuring minimal hassle for taxpayers,” he added. NBR Advisory Committee seeks stakeholder proposals for reforms Previously, NBR’s audit selection relied on a manual approach, raising concerns about potential bias. “The manual system has led to questions,” the NBR chairman noted. Traditionally, field officials reviewed tax files based on personal judgment. “We are moving away from that system; an office order has been issued to discontinue it,” he stated. In alignment with its digital transformation efforts, the NBR has temporarily paused the selection of new tax files for audit. Following the interim government’s formation, Md Alamgir Hossain, NBR’s member for tax audit, intelligence, and investigation, directed all field-level tax offices to suspend new audit selections until further notice, aiming to alleviate challenges under the current manual process. Additionally, the NBR has mandated online income tax filing (e-Return) for government employees within the income tax circles of Dhaka North, Dhaka South, Gazipur, and Narayanganj City Corporation. NBR confirms five-year tax exemption for Grameen Bank to end discrimination E-filing has also been made compulsory for employees of all scheduled banks, mobile telecom providers, and certain multinational companies, including Unilever Bangladesh, British American Tobacco Bangladesh, Marico Bangladesh, Berger Paints Bangladesh, Bata Shoe Company (Bangladesh), and Nestlé Bangladesh. The NBR aims to simplify income tax return submissions and payments through its online platform for the 2024-2025 tax year. The online return filing system, launched on September 9, allows taxpayers to pay through internet banking, card payments, and mobile banking, while enabling downloads of filed returns, receipts, income tax certificates, and TIN certificates. Past e-Returns can also be accessed. The newly introduced Income Tax Act 2023 includes updated audit guidelines, sparking concerns about possible increased bureaucracy and costs. Under these guidelines, taxpayers may face multiple interrogation stages, raising fears of potential underhand dealings. To address these issues, the NBR is developing a “Risk Management Engine” software to enhance audit transparency. This software will integrate with other government agencies, using risk factors to select tax files for audit, thereby strengthening measures against tax evasion.

The National Board of Revenue (NBR) is now putting its focus on settling the long pending cases through Alternative Dispute Resolution (ADR) system to boost the revenue collection. The revenue collecting authority of the country is at unease as the first two months of the running FY24-25 saw a setback in the collection due to the political unrest, officials said. A senior official of the NBR said that all commissionaretes have been asked to make a list of long pending cases which can be settled through the ADR. The NBR official said that emphasis has been given to utilise the ADR system to clear these cases. The official wished anonymity as he is not authorised to speak on the subject. In a recent meeting, NBR Chairman Md Abdur Rahman Khan asked the officials to take effective steps in this regard, said another official this week. "The NBR chairman also asked the officials to take all out efforts to realise the outstanding taxes," the NBR official said. The NBR introduced ADR on July 1, 2012 to speed up disposal of the revenue-related cases through out-of-court settlement. NBR reforms advisory committee likely to start work next week despite some confusions ADR is a tool that parties can use to settle disputes with the help of a third party. It is used for disagreeing parties who cannot come to an agreement short of litigation. However, ADR is also increasingly being adopted as a tool to help settle disputes within the court system. The NBR chairman has asked the  officials concerned to expedite the Alternative Dispute Resolution (ADR), the NBR official told UNB. Another senior official of the NBR said that as per the law taxpayers have to apply to resolve the tax related disputes. He mentioned that some taxpayers always try to evade tax and feel encouraged to settle the matter in the courts.  He also said that those who failed to make any headway in the courts usually come to the ADR system for resolving their disputes. An NBR official involved in the ADR said that due to the reluctant attitude from the businesspeople of the country the system is yet to give its full swing benefit for them and also for the national exchequer. "The NBR has taken various types of initiatives to vibrant the system, and a former NBR member has been appointed after forming a neutral cell for this system," he said. The NBR chairman, while talking to reporters recently, said ADR is a system where both parties can avail a win-win chance. NBR accelerates efforts to clear revenue case backlog He mentioned that if the taxpayers and tax authority do not come to a consensus then there is nothing to do in this ADR system. “For that reason many do not want to go to the ADR process,” he said. In this connection, the NBR chairman pointed out the reluctant attitude of taxpayers and tax collecting authority as they both want to win it all. “In ADR system both have to compromise or both have to sacrifice, that is the meaning of the ADR,” he said. The chairman  mentioned that those who are involved in the ADR are very much experienced and know the law very well. “They try to convince both parties to come for a consensus. If the taxpayers and tax collecting authority do not want to go for a long legal battle then ADR is the best option,” the NBR chairman said. As per available data, there are more than 27,000 cases pending in various courts related to income tax, Vat and duty involving not less than Tk 39,000 crore. Read more: How to file your Tax Returns in Bangladesh