To lower rate to 0.30pc for RMG
The National Board of Revenue is going to reduce tax at source on export of all but RMG products to 0.60 per cent from the existing 0.80 per cent for 15 months, officials of the NBR said. Export of the readymade garment items, however, will enjoy 0.30 per cent tax at source, they said. The government took the decision as part of an incentive package for the sectors which incurred losses during the political unrest in the country in the run up to the general elections held on January 5.
An NBR high official said all export-oriented sectors would get the tax waiver benefit up to June, 2015 from issuance of a statutory regulatory order.
After the period the existing tax rate will be restored automatically, he said.
The NBR on Sunday sent a draft of the SRO to the law ministry for vetting and the SRO will be issued as soon as the law ministry sends back the draft to the revenue board, he said.
Initially, the government had decided to provide the tax waiver only to the apparel sector but now the benefit has been extended to other sectors as they also incurred losses during the political turmoil, NBR officials said.
According to article 53BB and 53BBBB of the Income Tax Ordinace-1984, exporters have to pay tax at source at the rate of 0.80 per cent on export value of products.
Tax at source on export of knitwear, woven garment, terry towel, carton and accessories of garments industry, jute goods, frozen food, vegetables, leather goods and packed foods is considered as final settlement and the sectors need not to pay any other taxes.
Tax at source on export of other products is considered as advance payment of tax which will be creditable at the income tax returns of the business entities and they have to pay taxes from their income.
Bangladesh’s export earnings stood at $27.1 billion in the last fiscal year of 2012-2013. Of which, RMG sector including woven and knitwear earned $21.51 billion or around 80 per cent of the total earnings.
Bangladesh earned $1.03 billion from export of jute and jute goods, $543 million from frozen foods, $535.74 million from agricultural products, $399 million from leather and $367 million from export of engineering products.
The revenue board earlier assessed that reduction of tax at source on export of RMG products would cost at least Tk 2,000 crore in revenue.
-With New Age input
