The National Board of Revenue plans to impose higher taxes on fresh investments in setting up industrial units in Dhaka and its surrounding areas.
"It is often said that Dhaka has become an unlivable city for increased congestion and industrialisation. New industrial plants should not be allowed in Dhaka and its adjacent areas for the sake of livability of the city," NBR Chairman Md Ghulam Hussain said yesterday.
His comments came at a pre-budget discussion with representatives of Bangladesh Chamber of Industries, at the headquarters of the tax administrator.
Hussain said the NBR might include the proposal of imposing higher taxes on such industrial units in the budget of the upcoming fiscal year.
"We may provide tax breaks to encourage factory relocation from Dhaka. We may consider giving more benefits to the entrepreneurs who will set up plants outside Dhaka."
Over the past few decades, Dhaka city grew fast due to industrialisation, expansion of trade and rising internal migration. The capital and its surrounding areas house nearly 80 percent of the garment factories in the country. Economic activities in Dhaka contribute about 13 percent to the country's gross domestic product.
By 2015, almost 13 percent of Bangladesh's total population or a staggering 22 million will call Dhaka their home, according to a Sixth Five Year Plan document.
Hussain called upon businesses to invest outside Dhaka, saying amenities will be made available in other regions if factories are set up there.
At the discussion, BCI Senior Vice President Mostafa Azad Chowdhury Babu said entrepreneurs would be encouraged to invest in less-advanced regions if the government provides incentives.
He also suggested raising the tax-free income limit to Tk 250,000 from 220,000 now.
The trade body called for eliminating duty on import of capital machinery for all industries, and imposing 2 percent duty for essential raw materials.
It also suggested reducing import duty for spare parts of toys to 5 percent, from 25 percent now, to encourage growth of the plastic-based toy industry.
"Reduced duty will allow local industries to meet the domestic demand for toys and explore scope of exports," it said.