Govt slashes source tax on raw material to 4%

In the proposed budget for FY2022-23, the government has cut tax at source on supplies of raw materials to manufacturers from 7% to 4%, with a view to reducing production costs. 

Besides, the source tax rate on supplies of trading goods has been reduced to 5% from 7% and on supplies of books except those by the government to 3% from 7%.

"The present government is pledge-bound to ensure ease of doing business and to maintain business-friendly environment. Noteworthy that the existence of varied rates of tax at source on different types of supply causes excessive effective tax burden for business people in certain cases. With a view to mitigating this issue, I propose to reduce the rate of tax at source on supply of trading goods from 7% to 5%, and on supply of books except government supply from 7% to 3%. In order to reduce the cost of production in industries, I propose to cut the rate of tax at source on supply of raw materials to manufacturers from 7% to 4%," Finance Minister AHM Mustafa Kamal said while placing the budget at the parliament today.

Kamal placed the Tk6,78,064 crore national budget for FY23 at Jatiya Sangsad according top priority to safeguarding marginal people from inflation fuelled by the Russia-Ukraine conflict.

This is the fourth budget of the third consecutive term of the government led by Prime Minister Sheikh Hasina and also the overall 51st budget of the country.

The proposed budget is Tk74,383 crore higher than the original budget size of the FY2021-22 fiscal year, which was Tk6,03,681 crore.