The Cabinet has given policy and final approval to the draft of the Value Added Tax and Supplementary Duty (Amendment) Act, 2026.
The approval was given at a Cabinet meeting held at the Cabinet Division conference room at the Secretariat on Sunday, chaired by Prime Minister Tarique Rahman.
Under the Cabinet decision, the requirement to submit value-added tax (VAT) returns every month or at the end of each tax period, introduced in the budget for the 2026-27 fiscal year, has been relaxed.
Instead, businesses will be required to submit VAT returns within 15 days after the end of every three tax periods, effectively allowing quarterly submissions.
However, the change created various challenges in revenue collection at the field level, prompting the need to amend Section 64 of the Value Added Tax and Supplementary Duty Act, 2012.
As Parliament was not in session when the proposed amendment was being considered, the President promulgated the Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2026, on October 14 under the powers conferred by Article 93(1) of the Constitution. The Cabinet had approved the proposal before the ordinance was issued.
Subsequently, the government initiated steps to convert the presidential ordinance into an act of Parliament. Accordingly, a draft of the Value Added Tax and Supplementary Duty (Amendment) Act, 2026, was prepared, subject to vetting by the Legislative and Parliamentary Affairs Division.
At Sunday's meeting, the Cabinet granted both policy and final approval to the draft legislation, paving the way for the ordinance to be placed before the current parliamentary session for enactment into law.
