Tax Professionals BD

The Policy Paradox

Under Bangladeshi tax law, the tax on cash dividends distributed by listed companies to institutional or individual retail investors is typically withheld at source (e.g., 10% to 15% for individuals with ETIN, and 20% for companies/institutions as a minimum tax).

If Bangladesh Bank's new circular entirely blocks banks with less than Tk 2,000 crore in paid-up capital from distributing cash dividends, the government's National Board of Revenue (NBR) will face a severe and direct drop in tax revenue collection.

To understand the scale of this loss, we can look at the recent massive dividend declarations from some of the major listed commercial banks for the financial year ending December 31, 2025 (declared in early 2026).

For example : City Bank PLC, Net Profit (2025): Tk 1,324 crore, Total Dividend Declared: 30% (15% Cash, 15% Stock), Paid-up Capital: Tk 1,212 crore, Total Cash Payout: Tk 181.8 crore (15% of paid-up capital), Estimated Tax Collected at Source (assuming a 15% weighted average rate): Tk 27.27 crore.

There are 36 banks listed on the Dhaka Stock Exchange (DSE).

If we assume a standard, healthy year where banks manage an average cash dividend payout of just 10% to 12 across the entire listed sector, the government stands to immediately lose Tk 500 crore to Tk 600 crore in direct withholding tax revenue from the banking sector alone.

The NBR relies heavily on cash dividends to collect its minimum 20% institutional tax and individual source taxes, while simultaneously penalizing companies under Section 23 of the Income Tax Act if they issue paper stock instead of cash.

By implementing this arbitrary Tk 2,000 crore threshold, Bangladesh Bank isn't just hurting capital market sentiment—it is actively cutting off a vital pipeline of revenue for the government's own national treasury.

Tax Professionals BD

Bangladesh Bank’s new rule blocks any bank with paid-up capital under Tk 2,000 crore from paying dividends—leaving only BRAC Bank eligible.

​While meant to strengthen the sector, the policy misses the mark:

​It punishes good banks that are already financially stable.

​It scares investors because cash dividends are the most honest proof of a bank's health. Banning them implies the regulator doesn't trust the banks' data.

​It creates policy chaos, as tax laws actually penalize companies that don't pay cash.

Lets see.

এনবিআর (NBR) বেশ কিছু বৈপ্লবিক পরিবর্তনের পরিকল্পনা করছে:

​সম্পদ কর (Wealth Tax):
এখনকার সারচার্জের বদলে ধনীদের ওপর সরাসরি ওয়েলথ ট্যাক্স বসানোর চিন্তা চলছে। অর্থাৎ, সম্পদ যত বেশি, ট্যাক্স তত।

​উত্তরাধিকার কর (Inheritance Tax):
পৈতৃক সম্পত্তি পাওয়ার সময় এখন কর দিতে হতে পারে, বিশেষ করে সিটি কর্পোরেশন এলাকার দামী সম্পত্তির ক্ষেত্রে। মিউটেশনের আগেই হয়তো এই কর মেটাতে হবে।

​সবই ডিজিটাল:
২০২৫-২৬ অর্থবছর থেকে শতভাগ অনলাইন রিটার্ন চালু হচ্ছে। ম্যানুয়াল অডিট আর থাকছে না, সব হবে সিস্টেমের মাধ্যমে।

​স্বচ্ছতা:
কাস্টমস ও বন্ড ম্যানেজমেন্ট সিস্টেম আরও সহজ আর অটোমেটেড করা হচ্ছে যাতে ব্যবসায়ীদের ভোগান্তি কমে।