DHAKA, April 28, 2026 (BSS) – The Institute of Cost and Management Accountants of Bangladesh (ICMAB) has put forward a wide-ranging set of income tax and Value Added Tax (VAT) reform proposals for the national budget of fiscal year 2026–27 (FY27), aiming to enhance revenue mobilization, ensure transparency, and promote investment and economic stability.

Speaking at a pre-budget meeting with the National Board of Revenue (NBR) at NBR Bhaban in the city, ICMAB Fellow Member Md Mohiman FCMA emphasized modernization of the tax system, simplification of procedures, and expansion of the tax base while ensuring fairness across different taxpayer groups.

He proposed making tax audits more inclusive by allowing professional accountants, alongside chartered accountants, to conduct audits. 

This is expected to improve transparency, reduce tax evasion, and enhance compliance, he added.

He also recommended mandatory audited tax computations to ensure accuracy in complex financial reporting and minimize revenue leakage.

To establish equity, he suggested revising tax exemptions for government employees, bringing most allowances under the tax net except limited lump-sum benefits.

Among relief measures, he proposed increasing the tax-free income threshold and raising the agricultural income exemption limit to support middle-income groups and farmers.

To encourage capital market participation, he recommended tax exemption on dividend income up to Tk 50,000 and simplifying dividend taxation by treating Tax Deducted at Source (TDS) as final tax.

In addition, he called for reducing the minimum tax rate from 1 percent to 0.5 percent to ease the burden on businesses, while proposing a uniform corporate tax rate of 27.5 percent to simplify the existing structure.

Other notable suggestions include increasing the tax rate on lottery winnings to 25 percent, introducing mandatory tax return acknowledgement receipts, and aligning tax rules with international financial reporting standards.

On VAT reforms, ICMAB Fellow Member Mohammad Mohaimen strongly advocated for the introduction of a mandatory electronic invoicing (e-invoicing) system to enable real-time monitoring and reduce fraud.

He also proposed a risk-based audit system to improve efficiency by focusing on high-risk taxpayers while easing compliance for low-risk entities.

To support small and medium enterprises (SMEs), he recommended simplifying VAT return forms and making online VAT return submission fully mandatory to enhance transparency and automation.

He further suggested setting a maximum cap on penalties to improve the business climate and reduce litigation.

In the industrial sector, he proposed revising VAT rates for MS steel production to boost local industry competitiveness and encourage import substitution.

Other proposals include introducing automated VAT refund systems, ensuring VAT deduction at source for imported services through banks, and providing flexibility in VAT return submission deadlines during system disruptions.

ICMAB noted that the combined implementation of these reforms would strengthen compliance, reduce administrative inefficiencies, and curb tax evasion. The proposals also aim to build taxpayer confidence by ensuring a transparent, predictable, and business-friendly fiscal environment.

The institute expressed optimism that the recommended measures would contribute to sustainable revenue growth in both the short and long term while supporting Bangladesh’s broader economic development goals.