Income Tax Rates:

 Tax Rate for Non-Corporate Taxpayers:

No change in income slabs and corresponding tax-rates in AY 2007-08
except an incentive of tax rebate for the highest tax-rate taxpayers.
Types of Type of Income Tax Rates for AY
Assessee 2006-07 2007-08
Resident (1) Long-term 15% or Av. Tax Rate on total income Same
individual capital gain including capital gain, lower one
assessee*, (2) Accidental 20% or ATR on total income including Same
non-resident income u/s 19(13) accidental income, lower one
Bangladeshi, (3) Other income
association of Total Income-Slab 2007-2008 2008-2009
persons, firm On first Tk. 150,000 165,000*** Nil Nil
and other On next Tk. 275,000 275,000 10% 10%
artificial On next Tk. 325,000 325,000 15% 15%
juridical On next Tk. 375,000 375,000 20% 20%
persons On balance Tk. Balance Balance** 25% 25%
Minimum tax (Tk.) 2,000 2,000
Non-company Total income 25% 25%
non-resident
assessee
(except any
Bangladeshi)
*
The tax exemption benefit on remittance from abroad for resident persons
who are not citizens of Bangladesh has been withdrawn from FY 2006-07.
**
But 10% tax rebates on the additional tax paid by those individual
taxpayers paying tax at the highest rate of 25% disclosing more than 10%
higher income in the assessment year (AY) 2007-08.
***
The exemption limit for female Assessees and senior citizens of age at least
70 years has made to Tk.1,80,000 instead of Tk.1,65,000. [FO – 2008]
  Tax Rate for Corporate Taxpayers:
No change in rates prescribed by the Finance Act 2006 except the
“Charge of minimum tax” u/s 16CC (newly inserted).
Types of Type of Income Tax Rates for AY
Company 2006-07 2007-08
Bank*, (1) Capital gain - Transfer of stocks & shares of private 10% 10%
insurance, arising out limited company [S.R.O. No. 220-Ain/Aykar/2004
financial of dated 13.07.2004]
institutions - Transfer of other capital assets 15% 15%
(2) Dividend income 15% 15%
(3) Other - Both for publicly traded and not publicly 45% 45%
income traded company
Other (1) Capital gain - Transfer of stocks & shares of private 10% 10%
company** arising out limited company [S.R.O. No. 220-Ain/Aykar/2004
of dated 13.07.2004]
- Transfer of other capital assets 15% 15%
(2) Dividend income 15% 15%
(3) Other - For publicly traded company
income * Dividend declared by less than 10% or 40% 40%
failure to pay declared dividend within
SEC stipulated time
* Other situation 30% 30%
- For other company 40% 40%
*
Under section 16C, a bank company, if shows, in the return, profit exceeding 50% of the aggregate sum of
capital and reserve, shall pay tax @ 15% of such excess profit as additional tax.
**
Under section 16B, a listed company other than a banking or insurance company, if has not issued, declared
or distributed dividend or bonus share equivalent to at least 15% of paid-up capital within six months
immediately following any income year, shall pay tax @ 5% of “undistributed profit” (accumulated profit
including free reserve) as additional tax.

Charge of Minimum Tax [section 16CC][Repealed by FO 2008]: Under this newly

inserted section 16CC, a company shall pay a minimum income tax of Tk. 5,000 or
0.50% of turnover whichever is higher for companies irrespective of profit or loss. Here,
“turnover” means gross receipts from sale of goods, gross fees for rendering services or
giving benefits including commission or discounts, gross receipts from any heads of income
excluding ‘income from capital gains and receipts from speculation business’ and the
company’s share of amounts stated earlier of any AOP (association of persons) of which the
company is a member.
Thus, a company has to pay Tk. 5,000 or 0.50% of turnover or tax at usual rate,
whichever is higher. But as per the clarification given in the Circular No. 1 (Income Tax)
dated 30.07.2006 issued by the Income Tax Policy Section of the NBR (National Board of
Revenue), this provision is applicable from AY 2006-07 and not applicable in following
cases:
1. Company enjoying Tax Holiday;
2. Company having tax exemption under any S.R.O.; and
3. Income of a company on which tax deduction is applicable and the TDS (tax
deducted at source) is a final settlement of tax liability as per section 82C.
 Special Reduced Corporate Tax Rates:
  Agro-processing, jute and textile industries: Existing benefit of tax exemption and rebate
up to 30 June 2006 extended till 30 June 2008 [S.R.O. No. 166-Ain/Aykar/2006, S.R.O.
No. 168-Ain/Aykar/2006, and S.R.O. No. 169-Ain/Aykar/2006 dated 06.07.2006]. Past
provisions were:
- Agro-processing industries tax-exempted since 1-7-2002 (initially up to 30-6-2005,
then extended in 2003 up to 30-6-2006).
- Textile industries were subject to reduced tax rate of 20% for income year 2003-2004
and 15% for income years 2004-2005 and 2005-2006.
- Jute industries were subject to reduced tax rate of 15% for income years 2004-2005
and 2005-2006.
 New sector subject to reduced rate: Diamond cutting and polishing industry to be
taxed @ 15% [S.R.O. No. 174-Ain/Aykar/2006 dated 06.07.2006].
 Tax Rate for Local Authority: No change in tax rates.
Type of Income Tax Rates for AY
2006-07 2007-08
(1) Long-term capital gain 15% or Average Tax Rate (ATR) on total income Same
including capital gain, lower one
(2) Dividend income 15% 15%
(3) Other income 40% 40%
 Other Tax Rates for Special Tax Treatment:
Increase in tax rates on initial investment in House, Land, and Motor Vehicle out of
undisclosed income by the Finance Act 2006 [Sections 19B, 19BB and 19BBB
amended]:
 Special tax treatment regarding investment in house property building/ apartment
at a higher rate for selected posh areas [sec. 19B amended]: Tax rates for posh
residential and commercial areas of Dhaka and Chittagong have been increased [effective
from 1 July 2006 for tax payment irrespective of the period of investment].
Location of building or Plinth area in Previous Rate New Rate
apartment square meter
(smt)
Posh residential and Up to 200 smt Tk. 200 per smt Tk. 300 per smt
commercial areas of Dhaka Above 200 smt Tk. 300 per smt Tk. 500 per smt
and Chittagong*
Other area Up to 200 smt Tk. 200 per smt Tk. 200 per smt
Above 200 smt Tk. 300 per smt Tk. 300 per smt
*
Prescribed posh residential and commercial areas: Gulshan Model Town, Banani,
Baridhara, Defence Officers Housing Society (DOHS), Dhanmondi Residential Area,
Bashundhara Residential Area, Dhaka Cantonment, Motijheel Commercial Area,
Dilkhusha Commercial Area, Kawran Bazar Commercial Area of Dhaka and Khulshi
Residential Area, Panchlaish Residential Area of Chittagong.

 Special tax treatment regarding investment in land property increased [sec. 19BB
amended]: Tax rate of 5% has been increased to 7.5% irrespective of the location of the
land (previously it was for land situated in city corporation or pourashava or cantonment
board) [effective from 1 July 2006 for tax payment irrespective of the period of
investment].
 Special tax treatment regarding investment in motor vehicle doubled [sec. 19BBB
amended]: Tax rate has been doubled and due to repeal of proviso (under which the tax
was applicable for first time registration in Bangladesh), this tax will be collected at the
time of any registration of new or old car [effective from 1 July 2006 for tax payment
irrespective of the period of investment].
Capacity of the motor Previous Rate New Rate
vehicle
Up to 1500 c.c. 5% of purchase value 10% of purchase value
Above 1500 c.c. 7.5% of purchase value 15% of purchase value