Tax relief for firms with turnover up to Tk 2cr

The National Board of Revenue (NBR) has exempted businesses and companies with annual turnover of up to Tk 2 crore from minimum turnover tax, easing a tax burden that applies regardless of whether a business makes a profit.

The tax authority issued a notification yesterday introducing a revised structure for the minimum turnover tax.

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Under the new arrangement, businesses and companies with annual turnover of up to Tk 2 crore will not have to pay the minimum turnover tax.

Those with annual turnover above Tk 2 crore and up to Tk 4 crore will pay the tax at a rate of 0.5 percent, while businesses and companies with turnover above Tk 4 crore will continue to pay the existing 1 percent minimum turnover tax.

The move is expected to provide relief to small businesses, particularly those operating on thin profit margins, as the minimum turnover tax is payable even when a business reports little or no profit.

The revised threshold is also aimed at reducing the tax burden on smaller businesses and encouraging compliance among firms with relatively low turnover.