On January 9, 2025, the interim government of Bangladesh issued an ordinance to amend the Value Added Tax and Supplementary Duty Act of 2012. This ordinance introduces significant changes to the VAT registration and enlistment requirements and increases VAT and supplementary duty rates on various goods and services.
Amid ongoing high inflation and an economic slowdown, these increases in VAT and supplementary duty have faced backlash from various stakeholders. In response, on January 22, the government issued multiple notifications to revoke or reduce the applicable rates for certain services. Below is a summary of the changes:
Revised Registration Requirements
Under the previous law, VAT registration was mandatory for businesses with an annual turnover exceeding BDT 30 million. Businesses with a turnover between BDT 5 million and BDT 30 million were required to enlist for VAT and pay a turnover tax of 4%.
The new ordinance significantly lowers these thresholds:
- VAT Registration: Now mandatory for businesses with an annual turnover exceeding BDT 5 million.
- Enlistment: Required for businesses with a yearly turnover between BDT 3 million and BDT 5 million.
Rate Increases
The ordinance also imposes increased VAT and supplementary duties on a variety of goods and services. To view the complete list, please click here.
