A series of tax reforms have been proposed in the upcoming FY26 budget, with many measures set to take effect from July 2026 to allow time for taxpayer preparation, officials confirmed.

Starting in FY27, individual taxpayers’ tax-free income ceiling will rise by Tk 25,000—from Tk 3,50,000 to Tk 3,75,000. However, the existing threshold of Tk 3,50,000 will remain for FY26.

Corporate tax rates for publicly listed companies will be cut by 2.5 percentage points, effective July 2026, while non-listed firms will face a flat 27.5% rate for two years.

The Finance Ordinance 2025, to be presented today by Finance Adviser Dr Salehuddin Ahmed, includes a provision under section 21 to penalise former citizens—such as S Alam Group’s Saiful Alam, Summit Power’s Aziz Khan, and ex-land minister Saifuzzaman Chowdhury—for undeclared assets both at home and abroad.

Sponsor, director, and placement shareholders of listed firms will face a higher source tax of 15% from July 2025, up from 10%. Siblings will be added to the legal definition of share transfer.

Other key changes include a reduction in source tax for stock exchange members to 0.03%, and for power purchases from captive plants to 4%.

Freight forwarders will be taxed at 1.5% on gross bills, while cargo transport will be exempted from double taxation. Tax files on bad loans must now align with International Financial Reporting Standards alongside existing IAS norms.