PRE-BUDGET DISCUSSION

Agri, leather sectors’ trade bodies seek tax benefits

Staff Correspondent | Published: 22:25, Mar 28,2021

 
 

Trade bodies from agriculture and leather sectors on Sunday demanded a number of tax benefits, including withdrawal of source tax on procurement of agro-products and reduction in corporate tax, in the forthcoming national budget for the fiscal year 2021-2022.

At a pre-budget discussion with the National Board of Revenue, the associations sought the tax benefits to remain competitive on the international market amid the fallout of the COVID-19 pandemic.

NBR chairman Abu Hena Md Rahmatul Muneem presided over the meeting held at the NBR conference room in the capital, Dhaka.

At the meeting, the Bangladesh Agro-Processors Association demanded withdrawal of 2 per cent income tax at source on procurement of agricultural products from farmers, exemption from payment of advance income tax on raw material import and waiver from value-added tax on several agro-products.

BAPA recommended waiving tax on certain limit of value of supply and then imposing 0.1 per cent source tax, if the tax could not be waived completely.

It also demanded a reduction in corporate tax for agro-processors similar to other agriculture-based sectors, including poultry feed, fish feed, dairy and dairy products.

The association also sought 30 per cent cash incentive, increasing from existing 20 per cent, on export proceeds to boost export of farm products.

The Bangladesh Cold Storage Association sought continuation of VAT exemption for cold storage services in the next budget to support the farmers in storing their produces.

The association also demanded a reduction in corporate income tax for the sector to 10 per cent from current 35 per cent as almost all of the industries in agriculture sector enjoy a reduced tax rate.

It requested the government to offer 20 per cent rebate on electricity bills in line with the facility

given to other cold storages of the Bangladesh Agricultural Development Corporation.

The Bangladesh Bread, Biscuit and Bakery Manufacturers Association requested the revenue board to waive value-added tax on breads and biscuits valued below Tk 150 a kilogram and cakes valued Tk 100 a kg produced in manual-based bakeries.

Most of the small-scale bakeries are facing closure due to the COVID-19 outbreak and price hike of raw materials, it said.

The Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh placed a number of demands, including reduction in corporate income tax and reduction in source tax on export, to facilitate the sector to be competitive on the global market.

Leaders of the LFMEAB said that the corporate income tax rate for the sector should be consistent with the other export-oriented industries to boost competitiveness and support green industries.

They also said that the NBR should reduce the source tax on export earnings to 0.25 per cent from current 0.50 per cent considering the impact of COVID-19 outbreak on the export market.

Source tax on export subsidy should also be reinstated at 3 per cent from 10 per cent set in the current budget, they said.

The association requested the NBR to increase the tenure of renewal of bond licence to three years from current two years, citing that the renewal process was cumbersome.

The Bangladesh Tanners Association demanded a reduction in customs duty and VAT on import of a number of chemicals required for raw hide processing to 3 per cent and 7.5 per cent respectively from existing 5 per cent and 15 per cent to keep the non-bonded tanners competitive.

The BTA also sought permission to import of salt during the peak season as tanners require huge amount of salt to preserve raw hides.

The Bangladesh Paint Manufacturers Association demanded withdrawal of 5 per cent supplementary duty at the local production stage considering paint as an essential product instead of a luxury item.

The BPMA also sought a reduction in customs duty on import of raw materials and withdrawal of 0.5 per cent tax on promotional expenses above the permissible limit.

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