Parliament passes 2026 finance bill with tax cuts for everyday earners

The Bangladesh parliament has passed the new Finance Bill for 2026, bringing in lower taxes and simpler rules for everyday citizens and businesses.

Finance Minister Amir Khasru Mahmud Chowdhury presented the updated plan to parliament, where it was approved. Following advice from the Prime Minister during earlier budget talks, the government made several changes to the original plan to help reduce living costs and support local industries.

A major change is that people can now earn more money before they have to pay income tax. Over the next two financial years, no tax will be charged on personal earnings up to 400,000 taka. This tax-free amount will rise to 450,000 taka in the following two years and will eventually reach 500,000 taka by 2030.

Listening to public worries, the government also cancelled a confusing new rule that would have forced people to declare certain land and property investments. In addition, people will no longer need to show a Taxpayer Identification Number (TIN) just to open a regular bank account or register family property.

The new bill also cuts taxes for a variety of sectors. Private universities will see their income tax rate drop from 10 per cent to 5 per cent. Meanwhile, indigenous communities living in both the hill districts and plain areas will now be completely free from paying tax on their salaries.

Local farming and manufacturing will receive a significant boost as well. The government has removed import taxes on shrimp feed and farming equipment to help local producers. It has also lowered the taxes on raw materials used to make everyday items, ranging from plastic goods and electrical cables to LED lights and building materials.

To encourage businesses to pay for online services legally through formal banks, the tax on digital advertising on social media and search engines has been cut sharply from 15 per cent to 5 per cent.

Finally, the government has lowered taxes on locally made pickup trucks and microbuses, removed value-added tax on all fish supplies, and introduced simple, fixed tax rates for buying gold and silver jewellery.