Economic zone developers, investors to get 10yr tax break

Govt approves incentive package

Jasim Uddin

Bangladesh Economic Zones Authority has approved an incentive package including tax holiday for 10 years for economic zone developers and investors in the zones, officials said.
At a meeting with prime minister Sheikh Hasina in the chair on February 18, the governing body of BEZA approved the package to attract developers and investors to the country, they said.
The prime minister is the chairman of the BEZA Governing Board.
According to the approved package, mostly related to income tax, customs duty and value-added tax, economic zone developers will get 8 types of benefits while investors in the zones will get a total of 26 facilities.
Prime Minister’s Office last week asked the National Board of Revenue to take next steps in this connection.
According to the package, developers may get income tax holiday on income derived from the business of development of economic zones for 10 years and opportunity of income tax payment at reduced rate for next 2 years.
The governing body has also recommended providing tax holiday facility for investors under which they will enjoy income tax payment at reduced rates for 10 years including full exemption for first two or three years.
They may also be allowed exemption from payment of value-added tax for 10 years from electricity generation and procurement for using in EZs.
Developers may also be exempted from customs duties for establishment and development of EZs.
Income tax on dividend and service charges may also be exempted for the developers, according to the package.
Officials said that BEZA had already approved 22 proposals to establish economic zones across the country. Of which, appointment of developers for two zones is in progress. BEZA also gave two licences for establishing economic zones in private sector.
Currently, there is no economic zones in the country.
Five special economic zones on 8,816 acres of land at Mongla, Sirajganj, Gohira in Anwara Upazila, Mirsorai in Chittagong, and Moulvibazar in Sylhet have already been planned.
The government has a plan to set up at least 100 economic zones by next 15 years, they said.
According to the package, investors in the zones will also be allowed duty-free import of capital machinery, and raw materials and construction materials which are not available in the country.
There will be no ceiling in foreign direct investment in the zones and investors may be allowed full repatriation of capital and dividend, the package said.
There are some other tax related waivers like exemption from export tax, 50 per cent rebate in registration fees for land and 20 per cent VAT exemption for payment of utility services.
They would be given VAT exemption for products they would purchase from the local market.
The foreign investors will be allowed to bring five per cent of a factory’s workforce from their own
country. Foreigner workers having technical expertise in the respective field would be allowed to enjoy 50 per cent income tax exemption for 5 years.
Like the existing incentive of citizenship for foreign investors anywhere in the country, the package for the economic zones will offer the same. A foreign investor could get the country’s citizenship if he invests half a million US dollar and residence visa for investing US$ 75,000.
Officials of the economic zone authority said that Japan, China and India had already sought special economic zones for investors from those countries.

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