“The Land Development Tax Act 2023,” Act No. 31 dated 18 September 2023 passed by the Bangladesh Parliament

The Bangladesh Parliament recently repealed the Land Development Tax Ordinance of 1976 and introduced the new Land Development Tax Act 2023. The primary objective is to streamline land-related taxes and introduce several new provisions.

Under the new law, individuals or families engaged in agricultural activities are exempt from paying land development tax if they own up to 8.25 acres or 25 bighas of agricultural land. However, if their land exceeds this threshold, the entirety of the agricultural land becomes subject to land development tax. Additionally, land used for sugarcane and salt farming, as well as farmers’ ponds (excluding commercial fisheries), will also enjoy this exemption.

The act designates the July-June financial year as the tax year for the collection of land development tax.

One noteworthy feature of the law is that uniform land development tax rates and conditions are applicable to all cases, regardless of whether the agricultural land is situated in a rural or a municipal area. It allows for the categorization of non-agricultural land across the country based on land quality and usage to determine the land development tax rates.

Furthermore, the government has the authority to grant an exemption from land development tax to specific individuals, groups, or organizations. The act also permits the electronic collection of land development taxes. Until the electronic system is fully implemented nationwide, land development tax can be collected through banks in addition to the electronic system.

In cases where the land development tax goes unpaid in a city for three consecutive years, a penalty of 6.25% per year will be imposed from the first to the third year.