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Bangladesh API and Intermediaries Manufacturers Association has demanded more tax benefits in line with a cabinet decision and the National Active Pharmaceutical Ingredients (API) and Laboratory Reagents Production and Export Policy for the sector.
The trade body made the plea to the Prime Minister’s Office saying that there were inconsistencies in the tax scheme offered by the National Board of Revenue with the decision of the cabinet in this regard.
NBR’s terms and conditions for availing the benefit are also not aligned with the production process of the industry, the association said claiming that it would rather create a hindrance to flourishing the knowledge-based industry.
Entrepreneurs are also unable to complete export procedures due to complexities in a statutory regulatory order (SRO) issued by the NBR in this connection.
Prime minister’s economic affairs adviser Mashiur Rahman in a letter to finance minister AHM Mustafa Kamal informed the issue and requested Kamal to take necessary steps to remove the inconsistencies.
In the letter, he also recommended a number of steps including amendment to the NBR’s order and issuance of a new SRO offering some fresh tax benefits mentioned in the policy to facilitate the sector.
The NBR should release raw materials remained stuck at ports and give other tax benefits in line with the cabinet decision under interim measures like taking bond or undertaking if issuance of a new SRO takes time, Mashiur suggested.
In the letter wrote on July 2, he said that the BAIMA had informed in details to the prime minister about the issue.
On May, 2018, the government framed the policy for the sector offering a set of tax benefits including corporate tax holiday, exemption from payment of advance income tax, value-added tax and duty-free raw materials import facility till 2032.
The NBR has been showing reluctance to offer the benefits saying that such wholesale tax exemption would affect the overall revenue collection and the commerce ministry did not obtain vetting from the NBR regarding inclusion of the tax benefits in the policy.
So far, the revenue board has only offered VAT exemption on import of raw materials for the sector.
It has yet to issue any SRO exempting the entrepreneurs in the sector from paying income tax, AIT and allowing other benefits.
The investors claim that the revenue board has also tagged a condition of having 60 per cent value-addition for being enlisted with the NBR for availing VAT exemption though the cabinet set it at 20 per cent, Mashiur mentioned in the letter.
The NBR also formed a committee considering the applications of investors seeking VAT exemption under the SRO but no chemist or biochemist having expertise on API were included in the committee.
The entrepreneurs also got export orders of anti-diabetes API products worth $11 million from Egypt in November 2018 but they could not complete the export procedures due to these complexities.
A copy of the letter was also sent to NBR chairman Md Mosharraf Hossain Bhuiyan.
NBR officials said that they would take next steps on the issue as per the instructions of the government high-ups.
(NA)
