Govt changes VAT return rules to boost revenue collection

Under the new system, returns will have to be submitted within 15 days of the end o f each tax period

The government is reintroducing the provision for submitting value-added tax (VAT) returns for each tax period to boost the pace of revenue collection.

At present, taxpayers can submit a return once after every three tax periods, but under the new system, returns will have to be submitted within 15 days of the end of each tax period.

The move is aimed at making revenue collection more dynamic and effective through the regular submission of VAT returns.

At the 22nd cabinet meeting held at the Bangladesh Secretariat on Monday, the draft of the ‘Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2026’ was given policy and final approval. Prime Minister Tarique Rahman chaired the meeting.

According to the draft approved by the cabinet, a return must be submitted within 15 days of the end of each tax period. Instead of the existing provision allowing submission within 15 days after the completion of three tax periods, the deadline will now apply to each individual tax period.

The government’s initiative will bring the VAT-related transactions and liabilities of businesses and institutions under regular accounting. At the same time, it is expected to reduce the time gap in the process of collecting revenue from taxpayers.

Under the proposed amendment, if the 15th day of a tax period falls on a government holiday, the return may be submitted on the following working day.

However, government, semi-government and autonomous organisations, banks and insurance companies, as well as individuals or entities submitting zero returns, will be given additional time. These taxpayers will be able to submit their returns within 20 days of the end of the tax period.

At the cabinet meeting, the draft was given final approval subject to vetting by the Legislative and Parliamentary Affairs Division. The meeting noted that the main objective of the measure is to accelerate revenue collection at the field level.