Quarterly VAT Payments Risk Straining Bangladesh’s Cash Flow

• Bangladesh’s Finance Act 2026, effective July 1, cut VAT return filings from 12 to 4 per year, ended denial of expenses for failure to deduct tax at source, lowered the deposit required to dispute tax demands, and fixed income tax rates for five years.
• Under section 64 of the VAT Act, VAT payment shifted from monthly to quarterly: tax is now due within 15 days after each quarter, rather than 15 days after each month.
• The quarterly payment change keeps VAT in businesses’ hands longer, creating an estimated Tk20,000 crore cash-flow float and about Tk2,000 crore in annual government borrowing cost.
• The government says the delay worsens fiscal pressure amid higher LNG and fuel import costs, while the narrower revenue base makes the cash-flow gap harder to absorb.
• The NBR is reviewing whether to restore monthly VAT payment, noting that quarterly payment delays mismatch detection and that digital systems such as eVAT enlistment and Mushak invoicing still need time to mature.

Source: dhakatribune.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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