Finance Minister M Saifur Rahman in his budget speech for the 2004-2005 fiscal year proposed withdrawal of customs duty on medical equipment and accessories, and exemption of all kinds of taxes and duties on certain life-support systems used in referral hospitals.

But the National Board of Revenue (NBR) could not finalise the tax exemption policy until now.

The internationally reputed Apollo Hospitals Group has started implementing a project in Dhaka with an investment of Tk 200 crore but its implementation is being seriously hampered as the NBR did not give it duty exemption. Rather, the board asked the management of the project to submit bank guarantee in case of releasing imported medical equipment.

"Obtaining permission from the NBR and arranging bank guarantees for several letters of credit (L/Cs) involve a lot of money and it is a time consuming process, which will make it difficult to implement the project by March this year," said an official of the project.

When asked, NBR Chairman Khairuzzaman Chowdhury said a committee has been formulated to recommend the NBR a list of medical equipment that will get such tax exemption.

"The government decision will be effective from July this year," he added.

Those who are importing such equipment now will also get such benefit but they have to provide bank guarantee for releasing the imported equipment, the NBR chairman said.

In his budget speech in July 10 last year, the finance minister said there is no high quality referral hospital of international standard in the country. So, a large number of people are compelled to go abroad for treatment, although the same is often extremely expensive.

Despite having highly qualified, efficient and experienced physicians and doctors, Saifur said, high-quality treatment is not available in the country for the sheer lack of quality hospitals.

Proposing withdrawal of customs duty on medical equipment and accessories, and all kinds of taxes and duties on certain life-support systems, the finance minister in his budget speech hoped that entrepreneurs will come forward to take advantage of the opportunity to establish quality hospitals of international standard in the country.

Besides, chamber leaders drawing attention of Prime Minister Khaleda Zia at a meeting few months back pointed out that Tk 3,000 crore is being drained out annually for receiving treatment abroad. They sought her support to improve medical facilities in the country.

The Apollo Hospitals Dhaka is expected to start its operations from March this year. STS Holdings Limited, a 100 percent locally owned company, has made a franchise agreement with Apollo Hospitals Enterprise Limited.

Under the deal, Apollo Hospitals Dhaka will receive project and operation management as well as architectural services and be in the chain of 37 Indian Apollo hospitals with 6,400 beds.

With a capacity of 450 beds, the hospital in Dhaka will be developed as a referral centre for all high-end medical needs of patients in Bangladesh with over 60 specialty medical departments.

Apollo Hospitals Group is the single largest healthcare provider in Asia. Apart from different provinces in India, Apollo has its presence in Dubai and Colombo.