Bangladesh has brought retail shopkeepers into the tax net for the first time, requiring them to pay a 0.2% advance income tax on goods bought from manufacturers or importers. Under a new Section 127(b) added through an amendment to the Income Tax Act 2023, a retailer would pay two taka in tax for every 1,000 taka of goods purchased. The July 28, 2026 report said the measure is intended to broaden the tax base and raise revenue.

The National Board of Revenue plans to collect the tax through an app that is still at an early stage of development and may take at least three months to build. Company sales representatives or agents would use it to generate an “A” challan against a retailer’s TIN. Retailers would receive tax information through digital copies or SMS, and excess advance tax could be refunded if they file returns.

Officials cited major implementation obstacles, including no reliable database of shopkeepers, some manufacturers lacking TINs, network problems and the need for piloting and training. Earlier VAT collection efforts using ECR and EFD systems did not achieve expected results. Sources estimate annual revenue could reach about Tk5,000 crore, while manufacturers or importers could face penalties if collection fails.