Tax to double for new industries in and around Dhaka: NBR

April 30, 2014

The National Board of Revenue chairman Ghulam Hussain on Tuesday said that they were seriously mulling imposition of tax at double the present rate on new industries to be set up in Dhaka and adjacent areas. The revenue board will also offer attractive tax break for relocating factories from Dhaka and establishing new factories in other districts, he said.‘Dhaka has already become one of the worst cities to live in and we have to prepare a policy guideline in terms of tax measures to reduce pressure on the city,’ he said at a pre-budget discussion with Bangladesh Chamber of Industries held at NBR conference room.
Finance minister AMA Muhith also said at a pre-budget meeting with members of the parliamentary standing committees on Sunday that the government would not allow anyone to establish new industrial factories in Dhaka and would provide special facilities to investors for setting up factories outside Dhaka.
At the meeting with the NBR, BCI also proposed a special package lowering income tax, value-added tax and customs duties for new investors who will set up factories in non-developed and remote areas of the country.
They also sought some tax benefits to boost domestic industries.
Investors will have to pay tax at higher rate to set up factories in Dhaka and surrounding areas while they will get tax benefits for going outside the major cities including Gazipur, Narayanganj, Chittagong, he said.
The existing industries in Dhaka will have to pay at the highest rate in the existing structure, he said.
The measures, if implemented, will encourage entrepreneurs to shift their industries from Dhaka and to make fresh investment in different districts, he hoped.
He said that spreading investment in districts level would reduce poverty from remote areas.
Citing examples of Noakhali, Kushtia and some other districts, he said that decentralization of industries also reduces some problems related to workers unrest.
The income tax wing of the NBR will prepare a policy guideline in this connection.
He also urged the businessmen to adopt the idea and requested the Federation of Bangladesh Chambers of Commerce and Industry to include the issue in its agenda for budget consultative meeting to be held on May 8.
At the meeting, BCI demanded reduction of duty on import of raw materials which are not produced in the country and reduction of duty on import of secondary raw materials for industries.
It also proposed for imposing supplementary duty at higher rate on import of finished and luxury goods.
The trade body also demanded for increasing duty on import of LED and LCE television, motor cycle as a complete built unit and reduction of import duty on parts of refrigerators, freezers, and air-conditioners to protect local industries.
BCI sought reduction of VAT to 10 per cent from the existing 15 per cent at production stage, withdrawal of VAT on toys produced in the country to help the sector to flourish.
It also proposed to increase tax-free income limit for individual taxpayers to Tk 2.5 lakh from the existing Tk 2.2 lakh and reduce corporate tax to 20 per cent for publicly traded companies and to 30 per cent for private limited companies.
The trade body also demanded for withdrawal of minimum tax at the rate of 0.5 per cent on total receipt of the companies irrespective of loss or profit.
BCI senior vice-president Mostafa Azad Chowdhury Babu placed the budget proposal.
NBR members Syed Aminul Karim, Jahangir Hossain, BCI directors Mohabbat Ullah, Shamsur Rahman, Nazmul Haque, among others, were present at the meeting.

-With New Age input

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