The National Board of Revenue (NBR) has waived tax on Active Fine Chemicals Limited's (AFCL) business income from production of molecule laboratory reagents of active pharmaceutical ingredients (API).
As per an order, the publicly-listed company will enjoy the tax-exemption facility from July 1, 2016 till June 30, 2022, with retrospective effect.
The NBR's income tax wing issued the order exempting AFCL from paying income tax , attaching some conditions.
The company will produce API molecule laboratory reagents locally in its own factory, submit income tax return, certificate and other information to the tax authorities, states the order issued by NBR member (income tax appeal and exemption) Md Abdul Mazid.
A senior tax official said the company will be refunded the paid tax
worth Tk340 million as it is entitled to the benefit since 2016.
AFCL Managing Director SM Saifur Rahman said the tax exemption on production of molecule and laboratory reagents will help develop capacity of the local API industry.
The industry has been in a wait of long four years to get the much-desired facility (tax waiver).
Second secretary of the income tax wing Md Mohidul Islam Chowdhury said the order has been issued in line with the National Active Pharmaceutical Ingredients and Laboratory Reagents Production and Export Policy-2018, issued by the Ministry of Commerce to facilitate API industry.
There is a Statutory Regulatory Order (SRO) under which NBR offered tax break to the API manufacturing industries until 2032 on certain conditions, he added.
The companies will have to apply to the NBR with details of their molecule production capacity to get the tax wavier, he added.
For enjoying full tax exemption from July 1, 2016 until June 30, 2022, the manufacturers will have to produce API molecule and laboratory reagents in their own factories locally, he said.
However, the manufacturers who will be able to produce at least five new API molecule and laboratory reagents in a year in their own factories will enjoy a full tax waiver from July 1, 2022 up to June 30, 2032, he added.
The manufacturers will be able to pay tax at a concessionary rate of 7.5 per cent if they produce at least three new API molecules and laboratory reagents locally in a year, he said.
