Export-oriented industries out of VAT proposed

Staff Reporter :
The Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) proposed keeping all local purchases of export-oriented industries out of Value-Added Tax (VAT).

The association came up with the demand in a pre-budget discussion with the National Board of Revenue (NBR) at the latter’s office in the city on Thursday.

The entrepreneurs of the export-oriented industries are currently paying 15 per cent VAT against all purchases from local suppliers.

In the proposal, the BGAPMEA said that the export-oriented industries purchase various items including stationery from the local market for office management and all these purchases are related to production and export.

As Bangladesh is going to graduate from the LDC, many tax benefits including incentives will be withdrawn for the export-oriented industries. So, remaining competitive in the international markets, NBR should keep the local purchases out of VAT.

The association also proposed a reduction of tax at source to 0.25 per cent from 1 per cent for the next 5 years on all exports.

Besides, reduction tax at source on earning from bank interest to 10 per cent from the existing 20 per cent and power of issuance of utilisation of declaration (UDs) for quick supply, among the other, demands of the BGAPMEA.

On the other hand, Bangladesh Plastics Manufacturers and Exporters Association (BPGMEA) in their proposal demanded reduction of Regulatory Duty (RD) on importing raw materials to 5 per cent from the existing 30 per cent.

In the budget proposals, the Bangladesh Jeweller’s Association (Bajus) proposed a reduction in VAT on the sale of jewellery items.

Meanwhile, also speaking at the meeting, members of the E-Commerce Association of Bangladesh highlighted that a significant number of house owners are not submitting their returns.

Responding to their proposals NBR Chairman Abu Hena Md Rahmatul Muneem assured that they would take the proposals into account.
He also said NBR is going to launch a special drive targeting flat owners and house owners in the capital to ensure tax return submission from them.

“After two years of mandatory return filing for house owners, it’s time to take action. The list has been compiled, and we will initiate the special drive very soon,” the NBR chairman said.

Mentioning that the tax payment process has been simplified, he emphasised that payment of tax is not always mandatory when filing tax returns.

He further said, “We have implemented various initiatives, such as reducing duties, to encourage the legal import of gold.

Despite these efforts, gold imports are not meeting the expected levels, even though gold ornaments are being produced domestically.

It remains to be determined whether this issue is related to duties or another underlying problem.”