NBR eyes 35% tax rate for super-rich

The National Board of Revenue is planning to increase the tax rate on high-income individuals to 35% from the current 30%, as part of efforts to boost domestic revenue, with the proposed change likely to take effect from the 2027-28 fiscal year.

The revenue authority is also considering introducing wealth and inheritance taxes in place of the existing surcharge system, while exploring ways to raise revenue from tobacco products.

"We have a plan to implement this [tax rate hike on super-rich individuals] from the year after the next fiscal year. I plan to place the proposal before the finance minister," NBR Chairman Abdur Rahman Khan said during a pre-budget discussion with leaders of the Economic Reporters' Forum (ERF) at the NBR headquarters in Agargaon today (31 March).

He said the revised rate could apply to a "super-rich group", which may include individuals earning more than Tk1 crore annually, though higher thresholds such as Tk5 crore are also under consideration.

"Those who earn more should pay more," he added.

The NBR chairman also hinted at the possibility of introducing wealth and inheritance taxes during separate meetings with the Newspaper Owners' Association of Bangladesh (NOAB) and the Association of Television Channel Owners (ATCO) today.

"To increase internal revenue, we are thinking of reinstating the Wealth Tax Act, which would help mobilise additional revenue from wealthy individuals beyond their regular taxes," he said.

"Another idea has come to us. Many fortunate children inherit large amounts of property from their ancestors. In many countries, there is an inheritance tax. We can introduce such a tax in Bangladesh as well," he added.

According to him, an inheritance tax could be imposed on very high-value properties, particularly those located within city corporation areas, when ownership is transferred to the next generation.

Tobacco pricing hike likely

The NBR chief also indicated that the upcoming budget for the 2026-27 fiscal year may include measures aimed at increasing the prices of tobacco products.

He noted, however, that the current tax on cigarettes already stands at about 83%, one of the highest rates, leaving limited scope for further tax hikes.

"We are considering mechanisms such as price hikes or other systems to generate more revenue from the sector," he said.

He also said the authority was working to curb counterfeit cigarettes and fake band rolls.

"We have formed a committee and plan to introduce a QR code system to identify counterfeit cigarettes," he added.

The discussions were held as part of consultations ahead of the national budget for FY2026-27, which will be the first budget of the newly elected BNP-led government.

During the ERF meeting, organisation president Doulot Akter Mala and general secretary Abul Kashem, among others, also spoke.

Newsprint tax relief sought

At the meeting with NBR, NOAB called for several tax concessions for the newspaper industry.

The association proposed withdrawing duties on newsprint, reducing the corporate tax rate for newspapers to 10%, fully removing the existing 15% VAT on newsprint imports, and granting institutions an exemption from employees' income tax.

NOAB President Matiur Rahman Chowdhury, editor-in-chief of Manab Zamin, presented the proposals. Prothom Alo editor and publisher Matiur Rahman also spoke at the meeting.

NOAB President Matiur said many export-oriented or priority sectors currently enjoy corporate tax benefits ranging from 10% to 12%, while the newspaper industry has not received similar support. According to NOAB, newspaper organisations currently pay 27.5% corporate tax, similar to other commercial entities.

Prothom Alo Editor Matiur Rahman said it costs around Tk28 to publish a copy of a newspaper, but both readership and advertising revenue are declining, creating a widening gap between income and expenditure, reports UNB.

NOAB noted that imports of newsprint, the industry's main raw material, are subject to 3% import duty, 15% VAT, 5% advance income tax, and 7.5% advance tax. Including transportation and other costs, the landed cost of paper rises to around 130% to 132%.

As the industry is heavily dependent on imports, any increase in global paper prices directly raises production costs, the association said. The price of imported paper has risen from about $560 per tonne six months ago to around $630.

It further noted that many newspaper organisations operate with profit margins below 10%, making it increasingly difficult to manage the tax burden. In many cases, advance taxes cannot be fully adjusted at year-end, putting additional pressure on cash flow.

NBR bifurcation faces setback

Responding to a question about the planned split of the NBR into two separate divisions, the chairman said the process had faced a setback at its final stage. "We have made significant progress on the NBR bifurcation. However, we faced a setback at the final stage," he said.

"Since consensus has not yet been reached, there will be further discussions and fine-tuning. A final decision will be taken at a cabinet meeting regarding how the process will be implemented," he added.

"The government is in principle in favour of the NBR bifurcation, but discussions will continue on the operational procedures, and the cabinet will take the final decision," he said.