The Bangladesh government is preparing to extend Value Added Tax (VAT) coverage to a range of retail and service businesses as part of efforts to strengthen domestic revenue collection and broaden the country’s tax base.
Finance Minister Amir Khosru Mahmud Chowdhury said to Parliament on Wednesday that several sectors are being considered for inclusion under the VAT framework during the 2026–27 fiscal year.
The announcement came in response to a question submitted by reserved-seat Member of Parliament Selina Sultana.
“The proposed expansion would bring a variety of businesses into the VAT system, including grocery shops, beauty parlours, clothing and garment retailers, confectionery outlets and cosmetics stores,” the finance minister told in the session of the Jatiya Sangsad.
Other sectors under consideration include traders of plastic and ceramic household goods, footwear businesses, hardware stores, decorators and retailers of electronic products such as mobile phones, refrigerators, air conditioners and ovens.
The government is also looking at extending VAT coverage to paint and sanitary ware businesses, tile sellers, corrugated sheet outlets, traders dealing in rods and cement, furniture retailers, sweet shops and restaurants.
Officials said, "The initiative forms part of a broader strategy to improve revenue mobilisation and reduce reliance on a limited number of taxpayers.”
Expanding the VAT network is expected to increase government income while bringing more businesses into the formal tax system.
During his remarks in Parliament, the finance minister also highlighted the government’s VAT performance, stating that revenue collection from the tax reached Tk 141,586 crore in the 2024–25 fiscal year.
The planned expansion reflects the government’s continuing focus on strengthening fiscal capacity as Bangladesh seeks to support economic development and meet growing public spending requirements.
