Economic Reporter :
The National Board of Revenue (NBR) has conditionally exempted tax from domestic and joint venture-based Active Pharmaceuticals Ingredients (API) molecule and laboratory reagent manufacturers registered in Bangladesh.
The tax benefit was announced through a Statutory Regulatory Order (SRO), signed by NBR Chairman Abu Hena Md Rahmatul Muneem, on Monday.
According to the SRO document, the facility will be effective from July 1, 2016 till June 30, 2032.
To avail tax-free benefits from 2016 to 2022, the API molecule and laboratory reagent manufacturers need to produce API molecule and laboratory reagent locally in their own factories.
From July 1, 2022 to June 30, 2032, these API molecule and laboratory reagent manufacturers will have to produce at least five new API and laboratory reagents every year to get the full tax-free benefit.
The manufacturing company has to submit the certificate of the Directorate General of Drug Administration every year as per the rules.
Fines will be levied for producing substandard drugs and the tax benefits for that year will be cancelled.
As per the procedure, managing directors of the API manufacturing companies will have to apply for the tax break after providing details, such as the name of companies, taxpayers identification number, business identification number, date of company registration, office address, period of machinery installation, date started of commercial production, the volume of investment, volume if paid up and approved capital, number of employees, date of gas and electricity connection, list of manufactured goods, product-wise raw materials, location and address of factory, copies of company registration, memorandum and article of association, VAT documents, audited financial statement of last year of application, details of the investment, details of building, plant or machinery if those are used in rent or lease, details list of product-wise raw materials and its suppliers.
An NBR committee, led by the first secretary of income tax policy, would conduct an investigation and submit a report to the NBR after scrutinising the application.
The NBR would issue the certificate of tax exemption or reject the plea within 30 days of getting the investigation report.
However, the API manufacturers would be able to submit applications requesting reconsideration if it is rejected.
A three-member committee of NBR would give a final decision within 30 days of the application for reconsideration after arranging to hear with the manufacturers.
Square Pharma, Beximco Pharma, ACI Limited, Globe Pharma, Gonoshasthaya Pharma, Opsonin Pharma, Drug International, and Eskayef produce around 40 APIs locally.
Around 60 per cent of the locally manufactured API is contributed by Gonoshasthaya Pharmaceuticals Limited.
