Banks will have to deduct 0.25 percent source tax on exports of apparel and other items, except for jute goods, with effect from the first day of January, said the National Board of Revenue (NBR) recently.
The tax collector made the disclosure in a clarification issued to Bangladesh Bank and managing directors of banks on January 17. Earlier this month, the NBR slashed source or withholding tax on export proceeds, except for jute goods, to 0.25 percent from 0.60 percent. The notification created confusion among bankers as the date when this would come into effect was not mentioned.
“We have issued the clarification to all banks to remove confusion,” said a senior official of the NBR.
For fiscal 2018-19, the NBR imposed 1 percent source tax on export of garments and other export items other than jute goods. It reduced the rate to 0.60 percent in September 2018 in the face of demand from garment exporters.