Excise Duty in Bangladesh 2026: Bank Deposits, Air Tickets and Service Code E033.00

Excise duty in Bangladesh: the 2026 legal framework

Excise duty in Bangladesh is a small tax with an unusually wide reach. It no longer touches factory output in any meaningful way, yet almost every person with a bank account above the exemption threshold, and every passenger who buys an airline ticket departing from a Bangladeshi airport, pays it. The charge is levied under the Excises and Salt Act 1944, collected by banks and airlines on the state's behalf, and changed far more often than its age suggests: twice in 2025 alone, and again in 2026.

This guide sets out how the regime works in October 2026. It explains the statutory framework, the excise duty on bank deposits under Service Code E032.00, the excise duty on air tickets under Service Code E033.00, the January 2025 Ordinance that raised the airline figures, its replacement by the Excises and Salt (Amendment) Act 2026, the higher deposit threshold that applies from 1 July 2026, and how banks, airlines and their customers should collect, report, reconcile and, where necessary, challenge the duty. It also explains how to read historic excise schedules safely when an old ledger or audit query points back to a superseded version.

Summary: Excise duty in Bangladesh now applies to two services only: bank and financial institution accounts (Service Code E032.00) and airline tickets (Service Code E033.00). From 1 July 2026, balances up to Tk 4 lakh are exempt, with fixed annual charges above that. Airline duty is a flat amount per ticket that rose in January 2025. The 2025 Ordinance behind that rise has been replaced by Act No. 76 of 2026.

Key point: The rate printed in the First Schedule to the Excises and Salt Act is not always the rate collected. Effective rates for bank balances and air tickets are set through Finance Acts and NBR exemption orders, so any calculation, refund claim or audit response must be checked against both the schedule and the order in force on the relevant date.

At a glance

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Table of Contents

What excise duty in Bangladesh covers in 2026

Excise duty in Bangladesh is a charge on specified goods produced and services rendered inside the country. Section 3 of the Excises and Salt Act 1944 imposes it at the rates set out in the First Schedule, and section 2 defines excisable goods and excisable services by reference to Part I and Part II of that schedule respectively.[1] In practice, the goods side is dormant. The live part of the regime is Part II, which today lists two services: services rendered by banks or financial institutions (Service Code E032.00) and services rendered by airlines (Service Code E033.00).[2]

A levy that survived the move to VAT

Most consumption taxes in Bangladesh moved to value added tax decades ago, and today VAT and supplementary duty are governed by the Value Added Tax and Supplementary Duty Act 2012. Excise survived on a narrow base because it is simple to collect: a bank can calculate it from its own ledger, and an airline can add it to a fare at the point of sale. That simplicity explains why successive budgets have used the two service codes as revenue levers rather than abolishing them. Our overview of VAT in Bangladesh covers the separate VAT regime.

Excise duty, VAT and supplementary duty distinguished

The three taxes can apply to the same customer in the same transaction, but they are distinct. VAT is a percentage charge on value added, generally creditable through the supply chain. Supplementary duty is an additional, usually percentage-based, charge on listed goods and services. Excise duty on the two remaining services is a fixed amount: a band charge per account per year, or a flat charge per ticket. It is not creditable as input tax, and it is not calculated on the fare or on interest earned. An airline ticket can therefore carry VAT on certain airport charges, excise duty and other levies all at once.

Why such a small tax deserves attention

The amounts per customer are modest, but the aggregate is not. In January 2026 the NBR chairman put annual excise collections at an estimated Tk 6,000 crore.[10] For a bank, the duty is a statutory collection obligation across millions of accounts. For an airline or travel agent, it is a per-ticket liability that must be priced, collected and accounted for correctly. Errors in either role carry interest, penalties and reputational cost, which is why the duty should sit inside a business's tax-compliance framework rather than be left to system defaults.

The Excises and Salt Act 1944 framework

The Excises and Salt Act 1944 is old legislation that has been amended almost every year through Finance Acts. Its core machinery is compact, and anyone dealing with the duty should know five parts of it.

The charging section and the First Schedule

Section 3(1) levies duty on excisable services provided or rendered in Bangladesh at the rates set out in the First Schedule.[1] The schedule is arranged as a table with a service code, a description and a rate column. Amendments are usually made by substituting words and figures in that rate column, which is exactly how the January 2025 Ordinance worked for Service Code E033.00.[3]

Statutory rates and exemption orders

The schedule is only half of the picture. The government can exempt services wholly or partly from duty by notification, and for years it has used that power to fix the effective rates for bank balances and air tickets. NBR order SRO No. 143-Law/2020/104-Excise, issued on 11 June 2020 under section 12A(1) of the Act and amending an earlier order of 1 July 2017, exempted the portion of duty on Service Codes E032.00 and E033.00 that exceeded fixed amounts set out in its own table.[2] The duty actually collected is therefore the lower of the schedule rate and the rate fixed by the exemption order in force at the time.

Valuation and regulatory duty

Section 4(3) deals with the value of services and facilities, including services supplied free or at a concessional rate. Section 3A allows the government to impose an additional regulatory duty of excise by gazette notification, within statutory caps; any such notification lapses at the end of the financial year in which it was issued unless rescinded earlier.[1] Neither provision drives the two service codes day to day, but both matter when an officer asserts that a service was undervalued or when a mid-year levy is announced.

Determination of duty, interest and limitation

Section 3AA lets the Commissioner of Excise determine unpaid duty after giving the person a hearing, where there is a false statement or a failure to pay on time. The determination notice must be served within 45 working days of the hearing and must give at least 15 working days to pay. A determination is generally barred five years after the relevant period, unless there is wilful neglect, fraud or concealment. Unpaid duty carries simple interest at 2 per cent per month from the day after it fell due.[1]

Offences, penalties and recovery

Section 9 lists offences, including evasion and supplying false information, punishable by imprisonment of up to three years, a fine of up to Tk 5 lakh or twice the duty involved, whichever is greater, or both. Section 11 gives Excise Officers of Assistant Commissioner rank and above wide recovery powers: set-off against money owed, garnishee notices, attachment and sale, stopping the removal of goods, and notices requiring a bank to pay over or freeze the account of a defaulter. Unrecovered sums can be certified to the Deputy Collector and recovered as a public demand.[1]

Excise duty on bank deposits under Service Code E032.00

The most familiar form of excise duty in Bangladesh is the annual charge that appears on bank statements in late December. Service Code E032.00 covers services rendered by banks and financial institutions, and the duty is assessed account by account on the highest balance, credit or debit, reached at any time during the year.[2]

How the balance test works

Three features of the test catch customers out. First, it looks at the peak balance, not the average or year-end figure, so a single large receipt can move an account into a higher band. Second, each qualifying account is charged separately, so a customer with three accounts above the threshold pays three times. Third, the duty is charged once a year per account, however often the balance crosses the threshold. It generally applies to savings, current, fixed-deposit, DPS and salary accounts.[9]

The slabs from 1 July 2026

The Finance Act 2026 raised the exempt threshold from Tk 3 lakh to Tk 4 lakh from 1 July 2026, while leaving the higher bands unchanged.[11] [12] The current bands are set out below.[13] On a phone, scroll the table sideways.

How the threshold has moved

The exempt threshold has risen quickly. Until the 2025-26 budget, duty applied once an account reached Tk 1 lakh. The FY2025-26 budget raised the threshold to Tk 3 lakh, and the deduction made in December 2025 applied to accounts whose balance reached that level during 2025.[9] The FY2026-27 budget then raised it to Tk 4 lakh.[11]

The transitional year

Because banks deduct the duty on a calendar-year cycle while Finance Act changes take effect on 1 July, the year in which a threshold changes raises a practical question: which threshold applies to a balance that peaked in, say, March 2026? Customers whose peak balance fell between Tk 3 lakh and Tk 4 lakh during 2026 should check how their bank applies the new threshold before the December 2026 deduction, and ask for a written explanation if they are charged. Banks should document their reading of the transitional position in their excise working papers.

Loan accounts and Islamic banking

Because the test counts debit as well as credit balances, loan accounts are within scope.[2] The FY2026-27 budget addressed a long-standing complaint by providing that the duty should be charged only once on a single loan facility, however many linked accounts it uses.[11] For Islamic banks, the Finance Act 2026 provides that the duty is deducted only once a year against the main loan account, even where a facility runs through several deal accounts.[12] [13] Our guide to Islamic finance in Bangladesh explains how those deal structures work.

The policy debate

The duty on bank deposits is criticised as a charge on saving rather than on income, and as a disincentive to keeping money in the formal banking system. In January 2026 the NBR chairman questioned the fairness of taxing deposits, noting that duty is deducted even where the money in an account is borrowed, and said the government intended to move away from excise gradually rather than abolish it at once.[10] The higher 2026 threshold is consistent with that signal. For now, however, the duty remains in force, and banks remain obliged to collect it.

Excise duty on air tickets under Service Code E033.00

The second live head of excise duty in Bangladesh is Service Code E033.00, which covers services rendered by airlines.[2] The duty is a flat amount for each seat on a single-journey ticket, banded by destination, and it is collected when the ticket is sold.

The structure of the airline charge

Under the 2020 exemption order, the effective rates were Tk 500 for a domestic ticket; Tk 500 for an international ticket to a SAARC country; Tk 2,000 to other Asian countries; and Tk 3,000 to Europe, the United States and the rest of the world. A connecting domestic leg does not change the band of an international single-journey ticket, and foreign nationals of diplomatic class who show a diplomatic passport at the ticket and check-in counters pay nothing.[2]

The January 2025 increase

The interim government's advisory council approved a package of mid-year tax measures on 1 January 2025, and because Parliament was not in session they were issued as ordinances on 9 January 2025: one amending the VAT and Supplementary Duty Act 2012, the other amending the Excises and Salt Act 1944.[5] The NBR's announced per-ticket rates rose as follows: domestic from Tk 500 to Tk 700; SAARC from Tk 500 to Tk 1,000; other Asian destinations from Tk 2,000 to Tk 2,500; and Europe and America from Tk 3,000 to Tk 4,000.[5] [6]

The commercial impact

A senior NBR official said the government expected to raise about Tk 1,000 crore in additional revenue from the change. Domestic carriers objected that the increase came suddenly, outside the budget cycle, and that a rise from Tk 500 to Tk 700 was a 40 per cent increase on short, price-sensitive routes; and the increase took total taxes and fees on a domestic ticket from Tk 925 to Tk 1,125.[6] Excise duty on air tickets is therefore a pricing issue for airlines as much as a compliance issue.

Hajj exemptions

Exemptions are granted by statutory regulatory order. The NBR granted a full exemption from excise duty on air tickets for Hajj 2025, and in November 2025 the advisory council approved a further exemption for Hajj 2026 pilgrims, to be implemented by an SRO vetted by the Legislative and Parliamentary Affairs Division under the government's tax expenditure framework.[14] Airlines and Hajj agencies must apply such exemptions only to tickets that meet the order's conditions, and keep evidence that they do.

The 2025 Ordinance and Service Code E033.00 in detail

The Excises and Salt (Amendment) Ordinance 2025, Ordinance No. 02 of 2025, was published in an extraordinary issue of the Bangladesh Gazette on 9 January 2025 and came into force at once.[3] [4] It was a narrow instrument. It did not rewrite the 1944 Act or touch the bank-deposit entry; it amended a single row of the services table in Part II of the First Schedule.

What the Ordinance changed

Against Service Code E033.00, the Ordinance made two substitutions in column (3). In paragraph (a), "Taka 700 (seven hundred)" replaced "Taka 300 (three hundred)". In paragraph (b), "Taka 4000 (four thousand)" replaced "Taka 3000 (three thousand)".[3] Those are the only operative changes in the gazetted text.

Why the schedule figures and the route rates differ

Readers comparing the gazette with the press coverage will notice that the figures do not line up one for one. The Ordinance amended two paragraph amounts in the statutory schedule, while the NBR announced four route-based rates, including SAARC and other Asian bands not mentioned in the Ordinance at all.[3] [5] The explanation lies in the two-layer structure described above: the schedule sets statutory amounts, and the effective per-ticket rates by destination are fixed through exemption orders under section 12A.[2] Anyone reconstructing the rate for a particular ticket must read the schedule entry and the exemption order in force on the date of sale together.

Ordinance to Act: the 2026 repeal

Ordinances made while Parliament is not in session must be laid before the new Parliament. On 25 March 2026 the cabinet, chaired by Prime Minister Tarique Rahman, gave final approval to bills converting five revenue ordinances into Acts, including the excise ordinance, noting that revenue had been collected under it since issue.[7] The Excises and Salt (Amendment) Act 2026 became Act No. 76 of 2026 and was gazetted on 10 April 2026.[8] The official legislation record now lists Ordinance No. 02 of 2025 as repealed by that Act.[4]

What the repeal does and does not tell you

The repeal notice establishes the status of the Ordinance; it does not by itself prove the wording of the 2026 Act. The cabinet presented the bill as continuing the Ordinance's changes, and in January 2026 the NBR chairman confirmed that excise still applied to domestic and international airfares.[7] [10] The excise amendments in the Finance Act 2026 dealt with bank balances rather than air tickets.[12] For any live excise question, read the 2026 Act and the current exemption orders directly rather than relying on the 2025 text.

Reading historic excise schedules after the 2026 repeal

Because the schedule changes so often, a dispute or audit can easily turn on a version that is no longer in force. A bank reviewing a 2024 deduction, an airline answering a query about tickets sold in February 2025, or an auditor testing a prior-period provision all need the text that applied at the relevant time, not the consolidated text on the portal today.

Version control in practice

Start by fixing the date of the taxable event: the date of ticket sale for an airline, or the calendar year of the peak balance for a bank account. Then identify the instruments in force on that date: the schedule entry as amended, the exemption order fixing the effective rate, and any Finance Act or Ordinance amendment. For a ticket sold between 9 January 2025 and the commencement of Act No. 76 of 2026, the 2025 Ordinance is part of that set.[3] [8]

Keeping an audit trail intelligible

A good historic file records the instrument number, the date of commencement, the schedule part and service code, the paragraph, the former and substituted figures, the exemption order applied and a copy of each source as it stood. It also states plainly which figures are historic. That discipline prevents a common error in excise reviews: treating a later repeal notice, or a current consolidated text, as if it described the rule for every earlier period.

Where historic schedules matter most

Historic readings matter in refund claims, in responses to determination notices under section 3AA within the five-year window, in contractual cost-allocation disputes between airlines and corporate customers, and in reconciliations of amounts that a bank deducted but did not remit on time.[1] In each case, the person who can show the exact text and order in force on the date usually controls the argument.

How excise duty in Bangladesh is collected and reported

The duty is designed to be collected by institutions rather than paid directly by the people who bear it. That makes banks and airlines the compliance front line.

Banks and financial institutions

Banks calculate the duty for each account from their own records, deduct it automatically, usually in the final week of December, notify customers, typically by SMS, and deposit the amounts into the government treasury on behalf of the NBR.[9] Core-banking parameters therefore need to reflect each change in threshold and band, the once-per-facility rule for loans and the Islamic banking rule from 1 July 2026.[11] [12] An incorrect parameter can mean over-collection from customers or under-remittance to the state, both of which create liability.

Airlines and travel agents

For air tickets, the duty is added per seat at ticketing, so the airline's reservation and fare-filing systems must apply the correct destination band and any exemption, such as the diplomatic exemption or a Hajj order.[2] [14] When rates change with immediate effect, as in January 2025, carriers and agents must update systems quickly and decide how to treat tickets issued before the change. Collected duty must then be deposited and reconciled with the revenue authority.

Who does what

Records, reconciliation and scrutiny

Excise officers can determine unpaid duty, charge interest at 2 per cent a month and use section 11 recovery powers, including notices to a defaulter's bank.[1] The best defence is a monthly reconciliation of duty collected against duty deposited, with treasury challans, system reports and exemption evidence filed together. Our tax compliance checklist for Bangladesh sets out a wider control framework, and our note on tax audits in Bangladesh explains how audits are conducted.

Challenging a determination

A person served with a section 3AA notice is entitled to a hearing before the determination, and the notice must state the reasons, the basis of calculation, the payment date and where to appeal.[1] Use the hearing to put the correct historic text, the exemption order and the reconciliation in front of the officer. If the determination stands, the appeal route and its deadlines run from service of the notice, so act promptly. TRW's tax disputes practice handles excise, VAT and customs challenges.

A compliance routine for excise duty in Bangladesh

Whether you collect the duty or bear it, the same disciplined sequence avoids most problems.

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For depositors, the routine is simpler: know your peak balances, check the December deduction against the current table, and raise any discrepancy with the bank in writing promptly.

Common mistakes to avoid

• Using the schedule figure as the rate: the effective rate may be fixed by an exemption order, so a schedule figure alone can overstate or misstate the duty.[2]
• Applying the wrong year's threshold: the exempt threshold moved from Tk 1 lakh to Tk 3 lakh and then to Tk 4 lakh in two budgets, and the calendar-year deduction cycle complicates the transition.[9] [12]
• Charging linked loan accounts more than once: from 1 July 2026, one facility should bear the duty once.[11]
• Treating the 2025 Ordinance as current law: it was repealed by Act No. 76 of 2026, and current questions must be answered from the 2026 Act and current orders.[4] [8]
• Applying exemptions loosely: diplomatic and Hajj exemptions are conditional and must be evidenced ticket by ticket.[2] [14]
• Late remittance: duty collected but not deposited on time accrues interest at 2 per cent a month and exposes the collector to penalties.[1]

The 2026 position and what to watch

Three themes will shape excise duty in Bangladesh over the next year. First, the direction of policy is toward reduction. The NBR chairman said in January 2026 that the government would move away from excise gradually, offsetting lost revenue from other sources such as tobacco, and the 2026 threshold increase is a step on that path.[10] [12] Second, the legislative base has been regularised: the 2025 Ordinance has given way to Act No. 76 of 2026, alongside the VAT and Supplementary Duty (Amendment) Act 2026 and the Finance Act 2026.[8] Third, revenue administration itself is being reorganised, which our tax law in Bangladesh overview tracks.

For businesses, the practical message is to treat every budget and every SRO as a potential change to excise parameters, to keep historic versions on file, and to reconcile collections monthly. For depositors and travellers, the duty is modest, but it is worth checking. If you need advice on a determination notice, a refund, a historic schedule or system design for collection, TRW's tax compliance practice can help, and our analysis of the VAT and Supplementary Duty Amendment Ordinance 2025 covers the companion January 2025 VAT measures.

Frequently asked questions

What law governs excise duty in Bangladesh?

The Excises and Salt Act 1944. Section 3 levies duty on excisable services at the rates in the First Schedule, and Part II of that schedule lists the two services still charged: bank and financial institution services and airline services.[1] [2]

What is Service Code E033.00?

It is the entry in Part II of the First Schedule for services rendered by airlines. Duty is charged per seat on a single-journey ticket, banded by destination.[2]

What did the 2025 excise Ordinance change?

Ordinance No. 02 of 2025, in force from 9 January 2025, substituted Tk 700 for Tk 300 in paragraph (a) and Tk 4,000 for Tk 3,000 in paragraph (b) of Service Code E033.00. It made no other operative change.[3]

Is the 2025 Ordinance still in force?

No. It was repealed by the Excises and Salt (Amendment) Act 2026, Act No. 76 of 2026, gazetted on 10 April 2026. Current questions must be answered from that Act and the current exemption orders.[4] [8]

How much excise duty is charged on air tickets?

Following the January 2025 increase, the NBR's announced rates are Tk 700 per domestic ticket, Tk 1,000 to SAARC countries, Tk 2,500 to other Asian countries and Tk 4,000 to Europe and America. Diplomatic and Hajj exemptions apply on conditions.[5] [14]

What is the excise-free limit for bank deposits in 2026?

From 1 July 2026 there is no duty on accounts whose highest balance stays within Tk 4 lakh. Above that, the duty runs from Tk 150 to Tk 50,000 a year per account.[12] [13]

When do banks deduct excise duty on bank deposits?

Once a year, usually in the last week of December, based on the highest balance reached during the calendar year. The bank deposits the amount into the government treasury.[9]

Are loan accounts subject to excise duty?

Yes, because the test counts debit balances. From 1 July 2026 the duty is charged once on a single loan facility, and for Islamic banks once a year against the main account, regardless of the number of linked or deal accounts.[11] [12]

What happens if excise duty is paid late?

Simple interest runs at 2 per cent a month from the day after the due date. The Commissioner can determine the duty after a hearing, and officers can recover it through set-off, attachment or notices to the defaulter's bank.[1]

Will excise duty in Bangladesh be abolished?

Not immediately. In January 2026 the NBR chairman said the government would phase it out gradually because removing it at once would cause a revenue shortfall. No timetable has been announced.[10]