Tax waiver widens for firms in hi-tech park

Firms making goods and providing services from hi-tech parks will not have to pay income tax in the first seven years of their operations, up from three years previously.

After that 70 percent of the tax will be waived in the next three years, said the National Board of Revenue (NBR) in an order on December 4.

The tax collector first started offering the waiver to the parks' developers and investors three years ago in an effort to promote investment and youth employment in the country.

At that time, following the first three years of full waiver, the firms were to enjoy a further 80 percent reduction on the fourth year.

The waiver was then to decline by 10 percentage points on each of the subsequent years till the 10th year, when the amount waived comes to stand at 20 percent.

The benefit was phased out from the 11th year. A tax official said the benefits were increased based on the recommendation from the ICT ministry and the Bangladesh Hi-Tech Park Authority (BHTPA).

The BHTPA has so far approved 28 industrial enclaves to foster investment in ICT and technology in the country, which has made strides in ICT adoption in recent years.

Two such enclaves, Janata Tower Software Park in the capital and Sheikh Hasina Software Technology Park in Jashore, have opened and are home to a large number of digital companies.

The operation of the biggest park, Bangabandhu Hi-Tech City at Kaliakair in Gazipur, is likely to begin by 2020.

Recently, the BHTPA allotted plots to nine firms at Bangabandhu Hi-Tech City to manufacture hi-tech products. These firms have proposed to invest a total of $181 million in the park.

This is yet another area where the NBR has widened tax benefits, cutting withholding tax on export proceeds to 0.6 percent in the face of demands from entrepreneurs in September this year.