The government is likely to offer tax holiday facility for automobile, tyre and bicycle industry in the budget for the upcoming fiscal year (FY) to help boost growth of local manufacturing sector.
The budget for the FY 2015-16 may propose tax incentives for industrial growth and lure investment from both local and foreign investors.
Tax holiday facility may be offered for a 10-year period, sources concerned said.
Currently, a number of industries, both manufacturing and infrastructure development, are enjoying tax holiday facility.
Instead of full-tax exemption, tax holiday facility is being offered in a way so that the industry comes under the full tax-net in phases.
Tunnel brick kiln technology industries may also get tax holiday facility in the next fiscal year.
Official sources said some new industrial sectors are being deprived of the existing tax holiday facility. The government would offer facility for those sectors in FY 2015-16.
Several investors have already shown interest to invest in automobile, bicycle and tyre manufacturing sectors.
Chittagong-based PHP Group has taken initiative to assemble Malaysian Proton cars in Bangladesh. India and South Korea-based car manufacturers have also shown interest to invest in the country.
Meanwhile, Indian CEAT Tyre Company has expressed its willingness to set up a tyre manufacturing plant in the country.
Currently, state-owned Progoti Industries Ltd is assembling Mitsubishi jeep and microbus in the country.
The government is likely to impose heavy penalty for the companies that have employed unauthorised foreign officials.
If any company employs foreign workers who do not have work permit or do not pay taxes would have to pay 50 per cent of its payable tax or Tk 500,000, which is ever higher, as penalty.
Now foreign nationals have to pay 30 per cent tax on their annual incomes. But there is no tax-free ceiling for foreign workers in Bangladesh. There are allegations of tax dodging by foreign workers.
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