PPEs and surgical masks now VAT-free
The National Board of Revenue (NBR) yesterday exempted value-added tax on domestic manufacturing on personal protective equipment (PPE) and surgical face mask to reduce the cost and encourage increased production for the fight against coronavirus.
The revenue board also exempted the indirect tax in the supply and trading stage until June 30, 2020, according to a notification.
"Any firm that will make these will get the exemption benefit," said a senior official of the NBR seeking to remain unnamed.
The waiver comes following appeals from a couple of companies and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to facilitate increased manufacturing of PPE and surgical masks in the face of escalating cases of COVID-19 along with fatalities, fuelling the requirement for the protective gears for physicians, nurses and other healthcare personnel.
In March, the NBR suspended duties and taxes on imports of medical supplies, including protective equipment and test kits.
The NBR said a huge number of PPE and face masks might be required for treatment in the coming days as the pandemic continues to take on a ferocious form.
The revenue official said a 15 per cent VAT is applicable at the manufacturing stage of PPE and surgical masks. For supply, 7.5 per cent VAT is applicable, and for trading, a 5 per cent VAT.
These protective items would be VAT-free for the next two months until June 30.
The VAT benefit comes as concerns about the quality of PPE remains high in the country that reported 11,719 coronavirus positive patients and 186 deaths until yesterday.
Syed Naved Husain, director of Beximco Group and chief executive of Beximco Ltd, said the company is working to make protective gears for both the domestic and global market.
"When Beximco does something, it will not be a seasonal thing. Whatever we do, we look at 20 years ahead. We are not going to do it as an opportunistic thing," he said.
Husain said there is a misunderstanding in the market that if one has a workforce that can stitch, one can make PPEs.
"That's very dangerous."
The medical standard is very different from the fashion standard.
"In the fashion standard, you make a mistake, someone will get angry because the clothes that he bought does not look nice or it does not fit. But in this, you have zero tolerance. You have to deliver quality and that quality must comply with the very clear international standard. So, we are looking at all of that in a proper way on a long-term horizon of 20 years."
Husain said it is not clear when Beximco would be able to get its PPEs ready.
"There is a lot of work going on. We are doing global research to get the product up to the best international standard."
Asked whether Beximco is collaborating with a firm on the venture, he said: "Yes. But I cannot disclose their names.
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