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The National Board of Revenue plans to bring more export-oriented sectors under the bonded warehouse privilege so that entrepreneurs can import raw materials duty-free, said its chief yesterday.
“Upon completion of the present bond automation project, it will be feasible to expand it. If the facility is extended before the automation, it might be misused,” said NBR Chairman Abu Hena Md Rahmatul Muneem.
He made the comments at a pre-budget meeting at the NBR’s head office in the capital’s Agargaon with the Bangladesh Investment Development Authority (Bida), the Bangladesh Export Processing Zones Authority (Bepza) and the Bangladesh Economic Zones Authority (Beza).
The agencies placed a number of proposals seeking tax benefits. The NBR organised the meeting to hear the views and concerns of businesses and stakeholders as part of its preparation to framing tax proposals for the fiscal year of 2023-24, which begins in July.
Studies have shown that a good export market for shoes, leather goods and bicycles has been created. And discussions are going on whether they can be given some support even before the completion of the bonded automation project, Muneem added.
The bonded warehouse facility allows export-oriented industries to import raw materials and packaging materials without paying any duties or taxes.
It aims to encourage industrialisation, facilitate exports and enhance the competitiveness of the products made in Bangladesh.
The facility has been extended to export-oriented readymade garments and shipbuilding industries as well as deemed exporters of packaging materials, cartons, labels, polybags, buttons and hangers.
The Bepza recommended a 12-year tax rebate facility for technology-related and non-traditional products besides garments.
The Bida recommended that the rate of deduction of tax at source applicable on the income of non-residents be 5 to 10 per cent instead of 20 per cent.
It proposed the withdrawal of the current 1 per cent advance tax on raw materials and spare parts as well as the reduction of the advance tax rate in all cases to 3 per cent.
A new entitlement policy on bonded warehouses should be framed, said the Business Initiative Leading Development (BUILD) in its budget proposal, which was also placed in the same meeting.
The think-tank also demanded putting in place separate administrations formulating tax policies and collecting revenue.
“The NBR makes tax policies and collects taxes, but this creates problems on many occasions,” said BUILD Chief Executive Officer Ferdaus Ara.
In reply, Muneem said it may be examined.
He, however, said he did not understand why the demand was being raised.
“Laws related to tax, VAT and income taxes are very technical and complex. So, none can frame policies if they don’t have strong expertise in these areas.”
(TDS)
