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The Financial Express

Tax waiver withdrawn for economic zone factories

Essential goods producers to lose benefit


FE REPORT | Published: June 01, 2020 09:26:16 | Updated: June 04, 2020 11:41:13


Tax waiver withdrawn for economic zone factories

Factories producing essential products, including edible oil, sugar, flour, cement and steel, inside economic zones will no longer be eligible for tax exemptions.

In a regulatory order, the National Board of Revenue or NBR has cut the benefit to address disparity with factories that are located outside the zones.

The income tax wing issued the order on May 10 as factories outside the zones were alleging the uneven competition on determining prices of those products.

Officials said the factories, inside and outside of the zone, are producing same products for domestic consumption, but only factories within the zones are enjoying tax benefit.

They said the facility has been scrapped to remove such a discriminatory measure and demand from the non-zone mills.

Essential consumer goods-manufacturing companies, including TK Group, S Alam Group, Bangladesh Edible Oil Ltd and Globe, made the demand at the NBR.

Competitors such as Meghna Group and City Group are availing tax benefit, including exemption from the payment of advance income tax, but non-zone firms have meet taxation obligations, officials said.

In 2015, the revenue board offered a string of tax incentives, including gradual reduction in income tax exemption for 10 years, to the factories under the Bangladesh Economic Zones Authority or BEZA.

As per incentive scheme, investors enjoy full income tax exemption for the first three years of  operations, 80 per cent for the fourth year, 70 per cent for the fifth year, 60 per cent for the sixth year, 50 per cent for the seventh year, 40 per cent for the eighth year, 30 per cent for the ninth year and 20 per cent for the 10th year.

doulot_akter@yahoo.com

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