Finance Minister AHM Mustafa Kamal has announced a corporate tax cut in order to reinvigorate the economy after the setbacks caused by the pandemic and the war in Ukraine.
In line with previous budgets, the minister proposed a 2.5 percentage point cut that would put the rate at 27.5 per cent in the coming fiscal year, reports bdnews24.com.
The reduction in the tax, one of the major costs of doing business, will encourage investment and create more job opportunities, Kamal said in his budget speech in parliament on Thursday.
Bangladesh previously cut the corporate tax rate by 2.5 percentage points in each of the two previous fiscal years, lowering it from 35 per cent to 30 per cent. Now it will drop to 27.5 per cent.
The rate will apply to all companies unlisted on the share market, while the rate for listed companies will be lowered to 22.5 per cent.
“To facilitate the formalisation of the economy and to incentivise the formation of one person company (OPC), I propose to reduce the tax rate for OPCs from 25 per cent to 22.5 per cent,” the minister said.
“For the sake of development of the stock market and attracting investments, I propose a tax rate of 20 per cent in place of the existing 22.5 per cent for listed companies that issue shares worth more than 10 per cent of its paid-up capital through an initial public offering,” he said.
“I, however, propose the tax rate to be 22.5 per cent for a listed company that issues shares worth 10 per cent or less than 10 per cent of its paid-up capital through IPO.”
However, all receipts, income and expense and investment over Tk 120,000 must be transacted through the bank in order to avail of these reduced rates.