NBR plans tax benefits for manufacturing sector
The revenue authority plans to provide manufacturing industries with tax benefits to accelerate expansion of the sector, NBR Chairman Md Mosharraf Hossain Bhuiyan said yesterday.
Manufacturing flourished and exports increased in some sectors owing to the past fiscal benefits provided by the National Board of Revenue (NBR), he said.
His comment came at a pre-budget meeting with mobile phone manufacturers and importers, television and electrical merchandise manufacturers and software makers at the NBR headquarters in the capital.
“We want to do that for important sectors so that you can go for exports,” Bhuiyan said in response to a plea for duty cuts in imports of components of mobile handsets, televisions and electrical items from 2018-19.
Bangladesh Mobile Phone Importers Association (BMPIA) demanded a cut in import duty and tax for components to 1 percent from a total of 16 percent for the next fiscal year. The trade body also urged for a cut in import tariffs on smartphones to 22.19 percent from the existing 30.19 percent to boost use of 4G-enabled handsets.
“We want a balance in tariff between manufacturing and imports,” said BMPIA President Md Ruhul Alam Al Mahbub.
The cut in import tariff would help the smartphone market to grow further, he said.
Already seven firms have applied for permission to go for assembling phones in Bangladesh, said Mahbub, also chairman of Fair Group, which partnered with smartphone giant Samsung to make smartphones here.
A lot of investment will come to Bangladesh as soon as the assembling of smartphones begins, he said.
Bangladesh is one of the largest and fastest growing smartphone markets. Last year, the country imported Tk 10,000 crore worth of devices, 26 percent of which were of Samsung, according to the BMPIA.
He also urged the tax administrator for curbing illegal smartphone imports.
Illegally imported mobile phones should not be given access to network, he said, adding that such steps would stop the state from losing revenue.
The NBR chairman said his office would write to the telecom regulator about the illegal handset imports.
The Bangladesh Association of Software and Information Services (BASIS) sought easing the process for getting tax exemption certificates from the tax authority.
BASIS President Syed Almas Kabir said it was mandatory for software developers and providers of information technology enabled services (ITES) to get exemption certificates every year.
“Sometimes it takes five to six months to get the certificate,” he said.
The government has given a tax break for the IT and ITES sector till 2024 and it will be beneficial if a provision allowed issuance of one certificate to cater for the remaining years, he added.
The BASIS urged for reducing import duty on security software.
The apex trade body for software and associated services also demanded making the software import process easier.
It required downloading, not shipping; so the requirement of cost, freight and insurance papers are unnecessary in this case, said the BASIS.
The BASIS also requested withdrawal of a minimum tax of 0.6 percent on e-commerce ventures on the ground that these sites were yet to make profits.
Bangladesh Electrical Merchandise Manufacturers Association said a section of businesses import parts of switches, sockets and various other parts of electrical items and assemble electrical items, hurting domestic manufacturers.
The trade body pleaded for hiking import duty on such items to protect domestic industries.