Textile Income Tax Cut to 15% Until 2030: NBR Proposal Explained (Pending Approval)

The National Board of Revenue (NBR) has proposed cutting the income tax rate for Bangladesh’s primary textile sector from 27.5% to 15% until 30 June 2030. The NBR has drafted a statutory regulatory order (SRO) and sent it to the Finance Minister for approval. The cut is not yet law: it takes effect only when the SRO is approved and published in the official gazette.

What has the NBR proposed?

According to The Business Standard, the NBR recommended a 15% income tax rate for textile businesses, kept in place until 30 June 2030. For this purpose, the textile sector covers yarn production, yarn dyeing, finishing, coning, fabric dyeing, printing and related activities. The draft SRO went to Finance Minister Amir Khosru Mahmud Chowdhury. A senior finance official told the paper that the SRO will be issued soon after approval.^[1]

Section 76(1) of the Income Tax Act, 2023 lets the government reduce tax rates or grant exemptions for a sector by notification in the official gazette. That is why the change can be made through an SRO in the middle of the fiscal year, without waiting for the next budget.

Why does the textile sector pay 27.5% now?

In 2015, the government set a reduced 15% rate for the textile sector for 10 years through an SRO. That benefit expired on 30 June 2025. As part of a wider plan to cut tax exemptions and raise revenue, it was not renewed.^[2] Since then, textile mills have paid the standard 27.5% corporate rate, while export-oriented readymade garment (RMG) makers still pay a reduced rate of up to 12%.^[3]

Why does the NBR want to cut the rate?

The NBR’s proposal says the reduced rate is needed to protect exports and jobs and to support sustainable growth in the industry. It points to these pressures:^[1]

• Higher gas and electricity prices, and an unreliable energy supply
• High bank interest rates and pressure on working capital
• Lower export incentives, and tougher competition as Bangladesh graduates from LDC status
• Cheaper, subsidised yarn and fabric imported from neighbouring countries
• Most mills running at only 60–70% of capacity

What did the textile millers ask for?

In May 2026, the Bangladesh Textile Mills Association (BTMA) asked the Finance Minister to cut the rate from 27.5% to 10% until 2030. BTMA called the current structure “discriminatory”, since garment exporters pay a much lower rate, and said more than 200 mills have closed.^[3] The NBR did not take up the request in the FY2026-27 budget. The new 15% proposal is a middle ground between the industry’s demand and the current rate.^[1]

Current vs proposed rates

What it could mean for textile companies

If approved, the cut would almost halve the tax on taxable profits. For example, a mill with Tk 10 crore in taxable income would pay about Tk 1.5 crore at 15%, instead of about Tk 2.75 crore at 27.5%. That is a saving of about Tk 1.25 crore a year, before minimum tax and source tax are considered. This figure is for illustration only. Your actual tax will depend on minimum tax rules, tax already deducted at source, and the exact wording of the final SRO.

Open questions until the SRO is published

• Effective date: will the rate apply to the whole income year 2026-27, or only from the date of the gazette?
• Who qualifies: will spinning, weaving, knit-composite and mixed-activity companies be covered, and how will income from non-textile activities be treated?
• Conditions: will companies need to keep separate accounts, file their returns on time, or meet any compliance requirements?
• Minimum tax and source tax: how will the lower rate interact with tax deducted at source on export proceeds and local sales?

What textile companies should do now

1. Keep using 27.5% for now. Until the SRO is published, keep calculating advance tax and provisions at the current rate.
2. Prepare a scenario at 15%. Update budgets, deferred tax estimates and cash-flow plans so you can switch quickly once the SRO is issued.
3. Separate your activities. If you also earn income from non-textile activities, start keeping separate accounts now. A reduced rate usually applies only to qualifying income.
4. Watch the gazette. Read the final wording carefully. The final SRO may differ from the draft.

Related: Corporate tax return in Bangladesh · Withholding tax (TDS) return · Corporate tax advisory retainer

Frequently asked questions

Has the textile income tax been cut to 15%?
No, not yet. As of 9 November 2026, it is an NBR proposal. The draft SRO is waiting for the Finance Minister’s approval.

How long would the 15% rate last?
Under the proposal, until 30 June 2030.

What rate do textile companies pay now?
27.5%, which has applied since the earlier 15% concession expired on 30 June 2025.

Does this affect garment exporters?
No. Export-oriented RMG companies have their own reduced rate of up to 12%. This proposal covers the primary textile sector, such as yarn, dyeing, finishing and printing.