Bangladesh’s tax authority has proposed cutting the income tax rate for the primary textile sector to 15% from 27.5%, keeping the lower rate until June 30, 2030, The Business Standard reported.
The National Board of Revenue drafted a statutory regulatory order under Section 76(1) of the Income Tax Act and sent it to Finance Minister Amir Khosru Mahmud Chowdhury for approval on November 5. A senior finance official said the order would be issued soon after approval.
The sector covers yarn production, dyeing, finishing and printing. A 15% rate imposed in 2015 for 10 years expired in 2025, returning mills to the standard 27.5%.
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The board said the reduction would protect exports and jobs. It cited higher gas and electricity prices, energy shortages, high interest rates, reduced export incentives and competition after Bangladesh’s graduation from least developed country status. Most mills operate at only 60-70% of capacity, it said. Subsidised yarn and fabric imports from neighbouring countries also hurt local mills.
The Bangladesh Textile Mills Association sought a 10% rate until 2030 in May, noting export-oriented garment makers pay 12%. The cut is not law until the order is approved and published in the official gazette.