Individuals with annual income above Tk 15 million may have to pay income tax at the rate of 35 per cent from the upcoming fiscal year.
Currently, individual taxpayers with annual income above Tk 3.85 million are subject to a 30 per cent tax rate.
Officials at the revenue board say the upward adjustment aims to mobilise higher tax revenue from high-net-worth individuals (HNWIs) in a bid to lessen the tax burden on low-income people.
The new rate is expected to become effective for individual income earned in FY27.
The Medium and Long-term Revenue Strategy (MLTRS) for FY26 to FY35, published by the National Board of Revenue (NBR) in June 2025, indicates the plan to increase the tax incidence on HNWIs.
Talking to the FE, NBR Member (Income Tax Policy) Barrister Mutasim Billah Faruqui says the move is part of the government's broader strategy to reduce widening income inequality.
In Bangladesh, the Gini index is becoming more imbalanced, reflecting rising income inequality.
"We are heading towards a progressive taxation regime by focusing more on direct taxation," Mr Faruqui says, referring to the South Asian countries that mobilise more than 50 per cent of their domestic revenues from direct taxes.
In Bangladesh, the NBR currently collects only around 30-35 per cent of its total revenue from direct taxation, he notes. Vice-President of the Foreign Investors' Chamber of Commerce and Industry (FICCI) Iqbal Chowdhury says the proposed 35 per cent highest tax rate could discourage compliant taxpayers as only a small number of individuals who transparently disclose their income would be affected.
Mr Chowdhury, the first Bangladeshi chief executive officer (CEO) of LafargeHolcim, says salaried individuals are likely to bear the brunt of the measure as taxes are deducted at source by employers.
"It is a penalty for becoming an honest taxpayer and declaring all income in Bangladesh. This may encourage more tax evasion," he adds.
However, the MLTRS outlined the measure to establish tax justice.
"Revisiting tax rates for HNWIs to ensure a higher tax incidence, effective management of their complex financial affairs, and introduction of a system to monitor and enforce compliance are also in the pipeline under the strategic framework," it says.
Currently, affluent taxpayers are required to pay a surcharge ranging from 10 to 35 per cent based on wealth accumulation exceeding Tk 40 million.
The NBR is set to scrap the existing wealth surcharge system, which officials describe as distorted, and introduce a separate wealth tax from the upcoming fiscal year.
According to the Bangladesh Bank (BB) data, the number of HNWIs in Bangladesh stands at around 23,000, each having bank deposits averaging Tk 400 million.
Although the NBR does not maintain compiled data on HNWI taxpayers and their tax contributions, officials say all such bank depositors are under the tax net.
Under the Large Taxpayers Unit (LTU), around 400 HNWI taxpayers are registered, mainly sponsor directors and shareholders of large companies.
Tax officials say if all 23,000 HNWIs pay taxes properly at the existing rates, the contribution of individual taxpayers could account for as much as 80 per cent of the total direct tax revenue.
Mr Faruqui says progressive taxation is essential to ensure equity and fairness.
"The welfare state concept is gaining popularity worldwide, where affluent citizens willingly pay higher taxes to reduce the burden on lower-income groups," he adds.
According to the Bangladesh Bureau of Statistics (BBS), the number of bank accounts holding at least Tk 10 million was only five in 1972.
The Gini index is measured on a scale of 0 to 100, where 0 represents perfect equality and 100 signifies perfect inequality.
Bangladesh's income inequality - measured by earnings, remittances, and returns on assets - worsened, with the Gini coefficient rising from 51 to 54 points, according to a World Bank report published on November 26, 2025.
The Gini coefficient in urban areas increased from 33.1 to 34.5, while it declined from 29.2 to 28.2 in rural areas.
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