Individual taxpayers will receive refund of the amount paid in excess of due taxes within 60 days of the processing of their tax returns.
The refund will be made under a landmark provision proposed in the Finance Bill 2026 accompanying the new budget.
The refunded amount will be transferred directly into taxpayers' bank accounts electronically, marking a significant shift towards a more taxpayer-friendly and transparent tax-administration system.
Tax experts have described the move as a paradigm shift that could help ensure tax justice and strengthen public confidence in the country's revenue-collection framework.
The new provision, introduced for the first time, will apply to individual taxpayers earning income from salaries, financial assets, and agriculture.
Under the proposal, tax refunds will be generated automatically through the online tax-return portal and transferred electronically within 60 days of the taxpayer's application.
However, the refund will be subject to the completion of return processing, which must be finalized within 120 days.
The Finance Bill further stipulates that "failure to transfer the refund within the prescribed timeframe will be treated as misconduct on part of the responsible tax official".
From the current fiscal year, the National Board of Revenue (NBR) has made online submission of income-tax returns mandatory for individual taxpayers, with only a few exceptions.
A senior tax official says tax -refund mechanisms are a common feature in developed countries and play an important role in building trust between taxpayers and tax authorities.
"We will introduce this system from the next fiscal year to assure taxpayers that they will not have to bear the burden of excess tax payments to the public exchequer," the official says.
Tax expert Snehasis Barua thinks the provision represents a major reform in the country's tax regime and would help strengthen taxpayers' confidence in the revenue administration.
"It is a significant change in tax law and a positive step towards improving trust between taxpayers and tax authorities," he says.
Debabrata Roy, Director-Legal, Regulatory & Scientific and Corporate Affairs at Nestlé Bangladesh, welcomes the initiative, describing it as "beyond imagination" in the context of Bangladesh's tax administration.
However, he notes that effective implementation would be the key challenge.
"The execution of the refund system will be crucial. If implemented properly, automated tax refunds will significantly enhance transparency and accountability in tax administration."
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