Local industries cannot enjoy tax benefits forever: NBR

The existing tax, VAT and customs duty benefits to local industries will not be available forever, National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem has said.

Urging entrepreneurs of the local industrial sector to get ready, he said, "We gave you a stick [tax support] to stand on your own feet. But should we make you handicapped by providing this support continuously? This support will not be of the same magnitude [forever]."

He made the remarks in response to the demands of local industrialists at a pre-budget meeting at Agargaon in the capital on Tuesday.

"We gave you a stick [tax support] to stand on your own feet. But should we make you handicapped by providing this support continuously?"

Abu Hena Md Rahmatul Muneem, Chairman, National Board of Revenue

However, in order to protect local industries, the existing duty will not be reduced in the case of importing the same products produced locally, he said. "The NBR has been supporting the development of local industries."

He said, "Those who fight and survive will be given support. But one who is going to die, why should I keep him alive? We don't want to keep supporting a weak player."

At the meeting, the Bangladesh Refrigeration & Air-Conditioning Merchants Association highlighted its progress in overcoming import dependency over the last decade and a half and demanded the continuation of the existing reduced VAT facility (5% on sales) for the sector for a few more years.

On behalf of the Bangladesh Association of Software and Information Services, its Vice President Samira Zuberi Himika demanded extension of the sector's tax exemption, which is scheduled to end in June this year, until 2031.

At the meeting, the traders referred to various legal complications related to the NBR's customs and various forms of harassment, including increased valuation in assessment of imported goods by customs officers at ports.

Electricity sector entrepreneurs said that goods are assessed at values higher than imported prices. "[For example,] goods imported for $1600 are assessed considering a value of $2400, leading to an increase in taxes," said an entrepreneur.

Mohsin Bhuiyan, an entrepreneur, said, "Not only in our sector but in all sectors, such lawlessness is prevailing. It needs to be stopped."

Citing an example, he said, "In the case of importing circuit breakers from China, value per unit is not more than $0.45. But we are charged tax on values ranging from $0.60 to $1."

In that case, he proposed that the tariff value be fixed.

At another meeting, the Automobile Association of Bangladesh demanded a reduction of duty tax on electric vehicles.

The NBR chairman said, "Manufacturing should be open to all by fixing certain standards. A section is currently taking advantage of the lack of policy. They are charging Tk6 lakh, while the cost is Tk2 lakh."

He also raised the question of whether these companies are preventing the introduction of a policy for electric vehicles. ***