Field offices of the National Board of Revenue have begun collecting 10 percent tax on interest paid on microsavings, along with a 2 percent fine for non-compliance, citing the Income Tax Act 2023. Microfinance institutions say the measure falls on precisely the savers the government says it wants to protect.
Around 700 MFIs licensed by the Microcredit Regulatory Authority were operating as of June 2025, with roughly 4.40 crore members between them. About 90 percent of those members are women, and the membership is drawn largely from low-income and ultra-poor households. Members can open accounts with deposits as small as Tk 10 to Tk 30.
The sums involved are large in aggregate and small individually. Outstanding MFI loans stood at Tk 1,74,880 crore in June 2025 against savings of Tk 79,932 crore. Interest paid to depositors came to Tk 4,795 crore for the year, which would yield about Tk 479.5 crore under a 10 percent deduction.
Murshed Alam Sarker, chairman of the Credit and Development Forum, questioned the logic of taxing savings held by the poor, given how little each account earns and how much of it represents a buffer against illness or a bad harvest rather than investment income.
Prof Mohammed Helal Uddin, executive vice chairman of the MRA, said the tax runs against the government’s stated policy of supporting marginalised groups.
At the root of the dispute is a drafting question. The Finance Act 2023 required tax to be deducted on interest income but did not make clear whether microfinance member savings fell within scope. Field offices have read it as covering them; the sector reads it otherwise.
The Credit and Development Forum has filed a submission asking the NBR to confirm that interest on microsavings remains exempt. A decision from the board would settle the question for roughly 4.4 crore accounts.
