Facing demands from the business community, the National Revenue Board (NBR) is reducing the minimum turnover tax rate.
The NBR is stepping back from its decision under the new Income Tax Act to impose a 1% minimum turnover tax on annual sales regardless of profit or loss.
Under the new decision, the minimum turnover tax will be 0.5% if annual sales exceed Tk2 crore.
The agency is currently working on issuing a notification regarding this.
This information was learned from NBR sources on August 25.
According to sources, under the new directive, annual sales up to Tk2 crore will remain tax-free.
However, if total annual sales fall between Tk2 crore and Tk4 crore, the turnover tax will be 0.5%, and if it exceeds Tk4 crore, the turnover tax will be 1%.
Turnover tax is a direct or indirect tax payable at a fixed rate on a business's total annual sales or transactions, which must be paid even if there is no profit.
Income tax lawyer Hasanur Rahman said that provisions for turnover tax exist under Section 163 of the Income Tax Act, 2023.
According to Section 163(6) as amended by the Finance Act, 2026, if the tax determined under sub-section (3) is less than the prescribed turnover tax, turnover tax must be paid at the prescribed rate on the total gross receipts of the business or profession.
This means that where the law applies, total sales or gross receipts—rather than actual profit—will serve as the basis for tax assessment.
He stated that according to the amended provisions, the turnover tax rate has been set at 3% for tobacco product manufacturers, 2.5% for carbonated and sweetened beverage manufacturers, 1.5% for mobile phone operators and NTTN institutions, and 1% for other cases.
Business owners expressed concern over this tax rate following the announcement of the current FY27 budget.
They noted that most small and medium enterprises operate on limited capital.
Due to rising raw material costs, high bank interest rates, power and energy expenses, transportation costs, and intense market competition, many businesses operate on very low profit margins or at a loss.
Under such circumstances, levying tax on turnover rather than actual profits creates an additional financial burden for many entrepreneurs.