Wants favourable investment climate for injecting $80m
US-based Coca Cola, a multinational soft drinks maker, has raised concern over increasing supplementary duty on soft drinks in Bangladesh, claiming that its business in the country was being hampered because of the duty hike. The company informed the Bangladesh embassy to the United States that it would invest $ 80 million over the next five years if it was assured of a favourable investment climate.
Coca Cola has recently written a letter to the Bangladesh embassy in this connection.
On November 12, the embassy conveyed the message of the company to the National Board of Revenue.
In April, the revenue board raised the supplementary duty on soft drinks to 25 per cent from 15 per cent at production stage to check tax evasion by energy drink producers.
The revenue board made the tax rate equal for both types of drinks-makers – energy and soft – as the latter had been evading taxes by abusing the duty structure.
Earlier, supplementary duty for energy drinks and soft drinks were 25 per cent and 15 per cent respectively.
Abusing the tax structure, energy drinks manufacturers had been evading taxes by giving taxes at the rate of 15 per cent, declaring their products as soft drinks.
In a letter to the NBR chairman, Md Shahabuddin Patwary, economic minister at Bangladesh embassy to USA, said the Coca Cola Company claimed that the rise in duty was negatively impacting its business in Bangladesh.
‘The company in this context added that it plans to invest around $80 million over the next five years if it is assured of a favourable investment climate,’ the letter stated.
The value-added tax wing of the revenue board, however, is yet to get the letter, a high official of the wing told New Age on Saturday.
After getting the letter, the revenue board will inform government high-ups of the issue and await their decision, as the issue involves an investment proposal, he said.
According to NBR estimation, annually around Tk 120 crore will come in revenue because of upward revision of duties on soft drinks, officials said.
On the other hand, differentiating energy drinks from soft drinks is troublesome and time-consuming for field level officials as they need to carry out chemical tests, the official further said.
-With New Age input
