The government will extend the same facilities that the garment sector currently enjoys to other sectors as it earnestly looks to diversify Bangladesh’s export basket and reduce the dependency on apparel.
“In case of diversification, we will give the same facilities that we are giving to the garment sector this year,” said Md Mosharraf Hossain Bhuiyan, chairman of the National Board of Revenue, yesterday.
At present, the apparel sector enjoys a host of benefits including 4 percent cash incentive on exports to new destinations, lower corporate tax and bonded warehouse facility.
Bhuiyan’s comments came at the regular luncheon meeting of the American Chamber of Commerce and Industry in Bangladesh (AmCham) at The Westin in Dhaka.
In what will elicit a collective sigh of relief, Bhuiyan said the tax rates will not be increased in the upcoming fiscal year.
“This year the tax rates will not be increased. Rather, the rates may decrease.”
He also called for instances of discrimination faced by investors. “Give us a list within a week and we may examine. But Bangladesh does not discriminate when it comes to taxation.”
He went on to cite the case of the US, where Bangladeshi apparel items are subjected to 15 percent duty but those from Vietnam face 7-8 percent.
“Had it been equitable our exports could grow further and at the same time the profit or the competitiveness of our businesspersons could grow.”
Many American companies have investment in Bangladesh at present. “We also expect more companies to come because we have an atmosphere of equity, justice and equitable tax policy.”
The corporate tax for tobacco companies is higher than the rest, but that is to discourage people from smoking.
Initially, the government tries to promote domestic investors and in some cases levy supplementary and regulatory duty to discourage import of certain products.
“But at the same time we are trying to create an atmosphere of competition as the benefits are gradually phased out.”
Currently, the tax GDP ratio in Bangladesh is around 10 percent, which is one of the lowest in the world.
One of the main reasons for this is tax avoidance by many local companies. “We are trying to improve the situation -- we are going door to door,” he added.
Md Nurul Islam, president of AmCham, also spoke.