Tax incentive package for SMEs in budget likely

---

Doulot Akter Mala
Government is likely to offer a tax incentive package to the small and medium enterprises (SMEs) and cottage industries in the upcoming fiscal, aiming to boost the production capacity of the local manufacturing sector, officials said Monday.
The revenue board is set to scale up annual turnover threshold to 4.0 million from existing 2.4 million for fixing value added tax (VAT) on SMEs. Cottage industries will enjoy tax exempted ceiling amounting to Tk 2.5 million on investment of their capital machinery, up from the present level of Tk 1.5 million.
The government will also bring the cottage industries under subcontracting system of
VAT law. Under the law, industries enjoying facilities of cottage industries presently barred from producing any products using others brand names.
The next budget will be a boon for SME sector. It will be the most benefited sector in view of the new fiscal measures, said a revenue board official.
"SMEs having an annual turnover below 4.0 million will not be entitled to take Vat registration number from the next fiscal. They will have to pay 4.0 per cent as turnover tax instead of paying VAT at 15 per cent," a competent source said.
The government is expected to announce new fiscal measures in the next budget focusing on the growth of local industries in the wake of global financial meltdown, he said.
Revenue board has laid emphasis on the budget proposals of apex chamber body that has sought the facilities to boost local industries, he added.
Commerce minister Muhammad Faruk in the inaugural ceremony of SME fair also hinted at providing a special incentive package next year.
"SME sector is yet to flourish to the desired level due to lack of logistics support, fund constrains and high rate of taxes," an official said.
Although the sector has been generating huge employment opportunities in the country and is able to compete with the imported goods, the government is yet to patronise the sector properly, he added.
The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) placed a set of proposals for the next fiscal, suggesting some measures to boost the SMEs and cottage industry.