Dbarta24 Business Desk – Bangladesh’s National Revenue Board (NBR) is formulating a plan to expand Value Added Tax (VAT) collection down to the grassroots level by introducing fixed monthly VAT rates for rural and small-scale traders across the country.
Under the preliminary proposal, small business owners operating at the union level may face a fixed monthly VAT of 500 BDT. The slab increases to 1,000 BDT per month for traders at the upazila level and 2,000 BDT for businesses operating within district headquarters and municipal zones.
To streamline compliance, the revenue authority plans to allow payments through mobile financial services (MFS) alongside a dedicated mobile app currently under consideration for future rollout.
The move marks a structural shift toward a system reminiscent of the country’s former “package VAT” regime, which required urban small traders to pay flat fees regardless of total turnover.
While that system was abolished following the implementation of the new VAT Act in 2019, the proposed framework seeks to establish minimum fixed liabilities to capture previously unregistered micro-enterprises.
Currently, VAT registration is mandatory only for businesses generating an annual turnover exceeding 50 lakh BDT, which are generally subject to a standard 15% rate. Enterprises below this threshold have remained exempt from compulsory registration.
By establishing a minimal fixed VAT rate, the revenue board aims to incorporate roughly 300,000 to 500,000 marginal retail stores and small ventures into the tax net.
Field officers from the VAT department have already begun listing shops, shopping centers, and commercial hubs across various upazilas and unions.
Initial data collection highlights varied commercial landscapes—from 52 shops registered at Nur Nahar Plaza in Thakurgaon Sadar (including 4 air-conditioned outlets) to 121 shops at Betpatti Market in Rangpur City and 50 units at Rowmari Market in Kurigram.
This aggressive coverage drive is closely aligned with ambitious fiscal targets. For the current 2026–27 fiscal year, the NBR faces a total revenue collection goal of 604,000 crore BDT, with the VAT target fixed at 257,000 crore BDT.
Expanding the tax base to include grassroots entrepreneurs is viewed as a vital step toward meeting these revenue benchmarks.