Bangladesh’s NBR is moving to bring the country’s massive retail sector into the formal tax net for the first time. Under the proposed framework, dealers supplying goods to retail shops will collect the tax at the point of distribution, based on the value of products sold. The initiative has already received a green signal from the finance minister and may be included in the upcoming budget speech.
The scale of the push is significant. Officials estimate that tax is effectively collected from only around 15 lakh individuals nationwide, despite there being around 1.17 crore economic units across the country. In the first phase, officials plan to target around 50 lakh retailers out of an estimated 1 crore nationwide.
Who Collects It and How?
The tax is not paid directly by the shop owner at a government counter. Collection responsibilities are placed primarily on dealers and supply chain entities, with the new levy operating in addition to existing taxes and specifically targeting retail transactions.
When your dealer delivers goods to your shop, they deduct the tax from the transaction and deposit it to the government on your behalf. NBR officials said the tax will be collected through an automated system known as A-Challan, supported by a mobile application. Taxes collected at the dealer level will be deposited directly into the state treasury through digital channels, with retailers tracked using mobile numbers and periodic SMS updates.
Rates Already Applying to Retailers
The new source tax sits on top of existing obligations every shop owner should already know:
Companies are currently subject to a minimum turnover tax of 1% on annual sales, while dealers pay a 1% source tax on commissions and a 0.25% turnover tax.
On VAT, businesses below Tk 30 lakh in annual turnover do not need VAT registration. Turnover between Tk 30 lakh and Tk 80 lakh attracts a 3% turnover tax. Above that, the standard 15% VAT rate applies.
Will Prices Go Up?
Business representatives and tax experts have warned that the proposed system could increase pressure on distributors and potentially push up consumer prices. If your dealer’s invoice increases due to the new levy, your retail price will likely need to adjust to protect your margins. Ask your dealer for a written breakdown of any new tax component on their invoices.
What Shop Owners Must Do Now
Get a TIN. TIN registration is done online through the NBR e-TIN system at secure.incometax.gov.bd/TINHome. You will need your National ID, contact information, and bank account details. The process is free.
Check your VAT status. VAT registration must be obtained once turnover exceeds BDT 5 million, and is obtained online through the NBR portal free of charge, typically within one to two weeks.
File quarterly returns. From Assessment Year 2025–2026, returns for tax deducted or collected at source must be submitted quarterly instead of monthly.
Use digital payment channels. The NBR chairman has called for a complete phase-out of manual challans and pay orders, saying modern digital payment channels have made such instruments obsolete. Use A-Challan or bKash for all tax payments going forward.
Keep all supplier invoices. Every dealer invoice is your proof that the source tax was collected and deposited. Store them carefully — they will be essential at the return time.
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At a Glance: Key Rates for Retailers
| Tax Type | Threshold | Rate |
| VAT registration | Above Tk 50 lakh turnover | 15% |
| Turnover tax | Tk 30–80 lakh turnover | 3% |
| Dealer source tax (existing) | On commissions | 1% |
| New retail source tax | All retail supply | TBC in budget |
The confirmed rate will be announced in the budget. Check nbr.gov.bd for the latest update — and if in doubt, consult a local tax adviser before the new fiscal year begins.
Summary: A new tax at source on retail transactions will be collected by dealers using the A-Challan digital system. Shop owners need to understand how it works, what existing VAT and turnover tax obligations apply, and how to stay fully compliant.
