NBR to Phase Out All Tax Rebates by June 2027

he National Board of Revenue (NBR) has announced plans to eliminate all forms of tax rebates by June 2027, aligning with its 10-year Medium and Long-Term Revenue Strategy (MLTRS). The move aims to streamline the tax system and increase state revenue, placing the withdrawal of rebates as a high priority.

According to NBR estimates, the government currently forgoes nearly Tk 2.5 trillion annually in tax rebates. Officials believe reducing these exemptions could free up significant funds for sectors such as education, healthcare, and infrastructure.

Though some rebate provisions will remain in effect as per existing laws beyond mid-2027, NBR clarified that no further exemptions will be granted through special notifications.

The decision is also linked to commitments under the International Monetary Fund’s $4.7 billion loan programme, which requires Bangladesh to broaden its tax base and improve fiscal transparency.

NBR officials noted that tax rebates are disproportionately enjoyed by privileged groups and industries, contributing to an unequal tax burden across the population. To address this, the agency plans a phased and rational reduction of rebates.

As part of its roadmap, NBR will take five key steps over the next two years: evaluating sector-specific rebates, reviewing and scaling them down, coordinating with other ministries, drafting standard guidelines, and gradually phasing out all remaining exemptions.

Three NBR departments—Tax Policy, VAT Policy, and Customs Policy—will lead the implementation, with completion targeted by early 2027.

NBR’s internal reviews show that taxpayers received over Tk 2.73 trillion in total tax relief in a recent fiscal year. For instance, in 2020–21, the agency collected Tk 1.58 trillion in VAT and supplementary duty while offering rebates worth Tk 1.3 trillion in the same category.

Income tax rebates also exceeded collections, with Tk 1.16 trillion in rebates granted against Tk 828.71 billion in income tax collected that year. Major rebate sources include tax holidays and exemptions related to final tax liabilities at source.

Over the past five decades, more than 200 notifications have been issued granting various tax exemptions. A dedicated NBR team is now tasked with drafting a comprehensive plan to withdraw these long-standing benefits in a structured manner.NBR to Phase Out All Tax Rebates by June 2027

Story:

The National Board of Revenue (NBR) has announced plans to eliminate all forms of tax rebates by June 2027, aligning with its 10-year Medium and Long-Term Revenue Strategy (MLTRS). The move aims to streamline the tax system and increase state revenue, placing the withdrawal of rebates as a high priority.

According to NBR estimates, the government currently forgoes nearly Tk 2.5 trillion annually in tax rebates. Officials believe reducing these exemptions could free up significant funds for sectors such as education, healthcare, and infrastructure.

Though some rebate provisions will remain in effect as per existing laws beyond mid-2027, NBR clarified that no further exemptions will be granted through special notifications.

The decision is also linked to commitments under the International Monetary Fund’s $4.7 billion loan programme, which requires Bangladesh to broaden its tax base and improve fiscal transparency.

NBR officials noted that tax rebates are disproportionately enjoyed by privileged groups and industries, contributing to an unequal tax burden across the population. To address this, the agency plans a phased and rational reduction of rebates.

As part of its roadmap, NBR will take five key steps over the next two years: evaluating sector-specific rebates, reviewing and scaling them down, coordinating with other ministries, drafting standard guidelines, and gradually phasing out all remaining exemptions.

Three NBR departments—Tax Policy, VAT Policy, and Customs Policy—will lead the implementation, with completion targeted by early 2027.

NBR’s internal reviews show that taxpayers received over Tk 2.73 trillion in total tax relief in a recent fiscal year. For instance, in 2020–21, the agency collected Tk 1.58 trillion in VAT and supplementary duty while offering rebates worth Tk 1.3 trillion in the same category.

Income tax rebates also exceeded collections, with Tk 1.16 trillion in rebates granted against Tk 828.71 billion in income tax collected that year. Major rebate sources include tax holidays and exemptions related to final tax liabilities at source.

Over the past five decades, more than 200 notifications have been issued granting various tax exemptions. A dedicated NBR team is now tasked with drafting a comprehensive plan to withdraw these long-standing benefits in a structured manner.