Finance Minister AHM Mustafa Kamal has proposed to reduce taxes on Bangladeshi export-oriented products to make them globally competitive.
He suggested encouraging diversification of export goods and ensuring a level-playing field for all other sectors exporting goods and services in the budget for the financial year 2022-23 (FY23).
“In order to increase the contributions of the export sector to our GDP, long-term tax incentives have been granted to goods ‘Made in Bangladesh’ and services in the last fiscal year,” Kamal said as he presented a budget of TK 6.78 trillion for the coming fiscal year in parliament.
“As a continuation of that effort, initiatives should be taken to create new export sectors, to diversify goods and to search for new export markets so that ‘Made in Bangladesh’ can be made a global brand.”
“The prevailing tax rate for the export-oriented RMG sector stands at 12 per cent for general factories and 10 per cent for green factories. I propose to introduce a 12 per cent tax rate for all other general industries exporting goods and services and 10 per cent for all other green industries exporting goods and services.”
“This sort of export-friendly initiative will bring down the trade deficit with other countries. As a result, the deficit in the current account, a major economic indicator, will be minimised.”
In FY22, Bangladesh announced a 10-year tax exemption for six individual sectors in agro-based industries to generate employment under the 'Made in Bangladesh' title and tackle the drought in investment during the pandemic.
Along with a reduction in the corporate tax rate, the latest move boosts prospects to diversify production, export and import, reports bdnews24.com.
The budget for the new fiscal year has been formulated "with a view to reviving and accelerating the growth of the economy, which has been hampered by the long-term effects of the pandemic".
“At the same time, various measures have been taken and are planned to prepare for LDC graduation, create new jobs, sustain GDP growth, develop local industries, increase investment through protection and trade facilitation, pay special attention to the development of export-oriented and heavy industrial enterprises, and promote the 'Made in Bangladesh' tagline.”
In the last budget, Kamal proposed tax exemptions for companies that are engaged in the production of automated vehicles in Bangladesh as part of supporting 'Made in Bangladesh' brands.
"I propose to provide tax exemption, subject to certain conditions, to the companies engaged in the production of three and four-wheelers in Bangladesh for 10 years."