Special Correspondent :
Exporters have demanded corporate tax cut for export-oriented industries in the next budget to make local exportable competitive in the global market.
They also suggested for a five-year tax policy after fixing a unified corporate tax rate of 10 per cent for the export industries and reducing the source tax to 0.5 per cent from the existing 0.70 per cent.
Exporters Association of Bangladesh (EAB), the apex trade body of the country’s export sector, made the demand in its budget proposal to the National Board of Revenue (NBR).
“We’re demanding for an equal tax measures for all the export sub-sectors to maintain competitiveness of local export items in the global markets,” EAB President Abdus Salam Murshedy told The New Nation yesterday.
He said price competitiveness of local products is gradually declining mainly because of depreciation of local currency against the US dollar, rising cost of doing business, labour wages and transportation cost.
“So, the tax cut is vital to make domestic export industries more competitive,” he said adding, “The corporate tax and source tax should be fixed for at least five years.”
Referring to corporate tax rate, Murshedy said, the government fixed the rate at 12 percent for export-oriented garment factories whereas the rate is 35 percent for its backward linkage garment accessories and packaging industry.
He called for reducing the corporate tax to 12 per cent in view of the sector’s contribution.
EAB also sought exemption from VAT on products and services used locally by export-oriented industries, duty-free import facility for the capital machinery, fire preventive and energy savings equipment and spare-parts, conducting audit in two years instead of one year and increasing the time to 6 months from existing three to provide related documents. It also demanded cash incentive for the all export-oriented industries, withdrawal of 5 per cent advance income tax on cash incentive for frozen foods export, withdrawal of 4 per cent VAT on packing materials, fuel and lubricant, chemical and detergent, ice purchase and uniform and liveries, and 4.5 per cent VAT waiver on carriage inwards and outwards.
