The National Board of Revenue (NBR) Chairman, Abu Hena Md Rahmatul Muneem, announced the discontinuation of tax exemption on foreign loan interest after this year. Addressing offshore borrowers at a pre-budget meeting in the capital, Muneem urged them to prepare for tax payments, emphasizing that the concession provided until December would cease thereafter.
“We have provided you with breathing space until December. After this, there will be no such concession. Begin negotiations accordingly,” warned the NBR chairman during the meeting held at the NBR Building in Agargaon.
Muneem emphasized that Bangladesh aims to transition from being a tax-evading haven and is on track to graduate to a developing country. In the fiscal year 2023-24 budget, the NBR had imposed a 20% tax on interest payments for offshore loans from July. This led businesses to shy away from new loans, focusing instead on repaying existing ones, resulting in a decline in short-term foreign loans and a reduction in the country’s forex reserves.
The tax primarily targeted offshore bank interest and was intended to spare local borrowers. However, reports from bank sources suggested that foreign lenders were indirectly passing the tax burden onto local borrowers. In response to concerns, the NBR introduced an exemption facility until February, later extending it to 31 December 2024 to boost dollar inflow.
During the pre-budget meeting, the Bangladesh Export Processing Zone Authority (BEPZA) sought various tax benefits, prompting the NBR chairman to highlight concerns about the misuse of facilities granted to industries under BEZA. Muneem stated, “I can’t take more risks by giving more benefits,” expressing reluctance in the face of evidence indicating misuse.
Representatives from organizations such as Business Initiative Leading Development (BUILD) and Bangladesh Hi-tech Park Authority presented proposals during the meeting. Additionally, the NBR engaged with the Bangladesh China Chamber of Commerce and Industry (BCCCI), India Bangladesh Chamber of Commerce and Industry (IBCCI), Women Entrepreneurs Network for Development Association (WEND), Anti-Tobacco Media Alliance (ATMA), and other organizations on the day.
