Reduced tax for API manufacturers

The government of Bangladesh recently declared a policy to encourage manufacture of active pharmaceutical ingredients (API) in the country. At the moment, over 90 per cent API are imported from abroad. The APIs are used to produce drugs for the local market.

National Board of Revenue (NBR) has formed a panel to provide tax and duty benefits to local API manufacturers. The committee, headed by a Member of the NBR, has been asked to submit their recommendations within a month.

The government provides administrative and financial support to entrepreneurs to encourage establishment of different types of factories in a sector that the government wants to flourish. One of the tools used is allowing tax holiday for certain years for specific industrial units.

This tool needs review so that it does not encourage attitude of not paying income tax. Instead of tax holiday, government can allow reduced income tax for certain years to encourage particular industries to develop. At the moment, 25 per cent income tax is imposed on most industrial and commercial organisations in the country. Commercial banks have to pay 40 per cent income tax and mobile service providers pay 45 per cent income tax.

I would like to urge the government to review its policy. The government can impose five per cent income tax for 10 years on API producing industrial units, rather than providing 12-years tax holiday to them.

Md Ashraf Hossain

120 Central Bashabo, Dhaka-1214

[email protected]