DHAKA, April 28, 2026 (BSS) – The SME Foundation has proposed the introduction of a unified Preferential Tax Regime (PTR) for Micro, Small, and Medium Enterprises (MSMEs) in the upcoming fiscal year 2026-27 (FY27) to accelerate sectoral growth and simplify tax compliance.

The proposals were submitted to the National Board of Revenue (NBR) during a pre-budget meeting held at Revenue Bhavan in the city. 

The delegation was led by General Manager Mohammad Jahangir Hossain, who presented a comprehensive set of recommendations aimed at reforming the tax structure for MSMEs.

The Foundation highlighted the critical importance of the sector, noting that according to the Economic Census 2024, Bangladesh has approximately 1.17 crore economic units employing around 3.06 crore people. 

It stated that 99.92 percent of these units belong to the CMSME sector, which also accounts for 77.87 percent of total employment and contributes about 30.4 percent to GDP growth. 

Despite this significant contribution, the sector continues to face challenges due to the absence of a unified tax framework, with existing incentives scattered across multiple laws and SROs, creating compliance difficulties for entrepreneurs.

To address these issues, the SME Foundation has proposed the enactment of a separate law or statutory regulatory order to establish a dedicated Preferential Tax Regime for MSMEs.

The proposed framework includes a minimum 10-year tax exemption for new SMEs to encourage business growth, along with a simplified VAT system that would replace monthly returns with an annual filing structure based on turnover thresholds.

The Foundation also recommended introducing long-term green tax incentives for MSMEs adopting environmentally friendly technologies and production processes, as well as establishing a five-year bonded warehouse facility to support export-oriented enterprises in importing raw materials.

In addition, the Foundation submitted a total of 113 recommendations covering VAT, income tax, customs, and excise duties.

It proposed allowing SMEs with annual turnover of up to Tk 5 crore to file VAT returns semi-annually instead of monthly, alongside introducing a specific tax model for enterprises with turnover between Tk 1 crore and Tk 5 crore.

On income tax, it recommended increasing the tax-exempt turnover limit to Tk 1.5 crore for general MSMEs and Tk 1 crore for women entrepreneurs, while also proposing a reduction of Advance Income Tax on raw material imports from 5 percent to 1 percent.

The Foundation further suggested customs reforms aimed at protecting local industries by increasing tariff values on imported finished goods such as plastic toys, furniture, and light engineering products that are already produced domestically. 

It also recommended VAT exemptions for plastic waste recycling and higher duties on imported frozen Pangas fillets to safeguard the local fisheries sector.

The SME Foundation expressed optimism that the proposed Preferential Tax Regime and related fiscal reforms would create a more supportive business environment for MSMEs, strengthen domestic industries, and enhance long-term government revenue generation.