Trade bodies seek tax cuts on raw materials, lower land and flat registration costs

Leading industry bodies have urged sweeping fiscal reforms ahead of the FY 2026–27 national budget, focusing on reducing housing costs, rationalising import duties, and easing tax burdens on manufacturers.

On Wednesday, 12 organisations submitted their budget proposals during a pre-budget discussion held by the National Board of Revenue (NBR), attended by Chairman Md. Abdur Rahman Khan.

The Real Estate and Housing Association of Bangladesh (REHAB) and land developers called for a significant reduction in registration costs for land and flats, citing high transaction expenses as a barrier to housing affordability.

REHAB proposed cutting the gain tax to 3 per cent, stamp duty to 1 per cent, and local government fees to 1 per cent. VAT on flat sales would be reduced to 1.5–3 per cent, with a flat 2 per cent VAT for all registrations.

To formalise the secondary market, the association suggested a unified 4.5 per cent registration fee for the resale of flats and plots.

REHAB also requested the reinstatement of a previous provision in the Income Tax Ordinance allowing investment of undisclosed funds in housing without questioning the source of funds.

Vice-President Liaquat Ali Bhuiyan said, “Overseas Bangladeshis often do not declare the money they send. If it is not used for flats here, it remains undisclosed or ‘black’ money and eventually leaves the country.”

Responding, NBR Chairman Md. Abdur Rahman Khan stressed that the government will no longer allow such practices.

“Sending money from abroad is now very easy. If sent through official channels, the government even provides incentives. So, if expatriates or anyone else has undisclosed funds, they must pay tax at the regular rates to legalize it—there is no alternative.”

Abdur Rahman Khan said, “We have had this culture for 55 years, and we do not want it to continue.”

He also noted that the government aims to change this culture to ensure accountability and reduce tax evasion.

He said, adding that tax-dodging practices ultimately harm compliant taxpayers the most.

Meanwhile, the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) urged the NBR to rationalise duty structures and recognise natural wastage in imported raw materials.

It noted that key inputs such as China clay and ball clay contain 30–35 per cent moisture, with total wastage reaching around 40 per cent after processing.

The association proposed a 35 per cent deduction in weight when calculating duties and called for a uniform 5 per cent import duty on key raw materials and chemicals, such as talc, printing ink, and nano chemicals.

They also suggested removing regulatory and supplementary duties on certain items.

The Bangladesh Cement Manufacturers Association (BCMA) has proposed cutting Advance Income Tax (AIT) from the current 2–5 per cent at import and 2 per cent at sales to just 0.5 per cent.

It also suggested lowering the Advance Tax on key raw materials to 1 per cent, fixing the customs duty on cement clinkers at Tk 500 per metric tonne, and removing the 10 per cent supplementary duty on limestone.

BCMA president Mohammad Amirul Haque said to ease financial pressure on manufacturers, the cement makers proposed cutting Advance Income Tax from existing rates of 2 to 5 per cent at import and 2 per cent at sales to 0.50 per cent, and reducing Advance Tax on key inputs to 1 per cent based on invoice value.

The association president further recommended introducing a tariff-based VAT system with a uniform rate per tonne to eliminate valuation disputes and improve revenue collection.

He also called for invoice-based assessment instead of fixed minimum values and restoration of a simplified duty drawback system to support exports.

The Bangladesh Land Developers Association requested land valuation based on on-site measurements, with Secretary AKM Nowsherul Alam noting that current practices result in excessive capital gains taxes.

“Currently, we have to pay hundreds of thousands of taka in capital gains tax per per cent of land. This could be simplified by determining tax based on document value at a 3 per cent rate,” he added.

The Bangladesh Association of Pharmaceutical Industries called for policy support in light of the country’s upcoming graduation from LDC status, while the Bangladesh Tanners Association proposed reducing duties on imported chemicals.

The Bangladesh Tanners Association proposed reducing duties on imported chemicals.

Other industry groups, including the Bangladesh Association of Construction Industries, Tea Traders Association of Bangladesh, Bangladesh Foodstuff Importers & Suppliers Association, Footwear Leathergoods & Accessories Exporters Association, Bangladesh Finished Leather, Leather goods and Footwear Exporters Association, Plastic and Rubber Shoe Merchant Association,  Marble, Granite & Other Natural Stone Blocks Processing Industries Association and Bangladesh Paduka Prostutkarak Samity, also submitted their budget proposals.

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