The proposed Finance Bill 2026 in Bangladesh seeks to exempt listed banks, insurance, and non-bank financial institutions from the obligation to distribute 30 percent of their income as dividends. The bill, presented in the National Parliament, introduces amendments to Section 22 of the Income Tax Act 2023, allowing these institutions to transfer post-tax profits to retained earnings or reserves without paying the current 10 percent tax on such transfers.

The Bangladesh Bank recently restricted dividend payments by banks with less than Tk 2,000 crore in paid-up capital to strengthen their financial base. The new proposal extends dividend distribution relief to other financial institutions as well. For general listed companies, the bill revises the tax calculation method, imposing a 10 percent tax only on the portion of profit transferred to reserves exceeding the 70 percent limit, instead of taxing the entire amount.

Tax expert Snehashish Barua noted that the changes would significantly reduce the tax burden on companies, lower business costs, and encourage reinvestment, while allowing financial institutions to reinforce their capital structures.