Taxation in Bangladesh

In Bangladesh, the principal direct taxes are personal income taxes and corporate income taxes, and a value-added tax (VAT) of 15% levied on all important consumer goods. The top income tax rate for individuals is 25%. For the 2004/05 tax year (July 1 2004June 30 2005) the top corporate rate was 45%. However, publicly traded companies registered in Bangladesh are charged a lower rate of 30%. Banks, financial institutions and insurance companies are charged the 45% rate. All other companies are taxed at the 37.5% rate. Effective 1 July 2002, the VAT rate on computer hardware and software was reduced to 7.5%, and certain agricultural equipment and electricity supplied to the agricultural sector was exempted from VAT altogether. VAT on the transfer of land is also to be abolished. Essential agricultural implements and irrigation pumps had previously been excluded from certain taxes.