A 10-year tax holiday is sought for companies making cent-percent foreign direct investment (FDI) in mobile-phone manufacturing and backward- linkage industries to bag a beckoning trade boon.
The proposal was made Wednesday by Bangladesh China Chamber of Commerce and Industry (BCCCI) at a pre-budget meeting with the National Board of Revenue (NBR) at its conference hall in Dhaka.
If this decade-long tax-break is put as a bet on the mobile-phone manufacturing industry, many foreign companies will be interested to come forward to manufacture 'made in Bangladesh' mobile phones here, the chamber said to underpin its tax-incentive proposal for financial year 2022-2023.
"Besides, tax benefits will also allow backward-linkage industry in mobile- phone sector to grow while foreign investment in the sector will help the country in creating more technically-enriched human resources," said BCCCI member and Country Manager of Xiaomi Bangladesh Ziauddin Chowdhury.
Chairman of the NBR Abu Hena Md Rahmatul Muneem presided over the programme, which was also addressed NBR members Md Masud Sadiq, Zakia Sultana, and Md Shams Uddin Ahmed.
Representatives of India-Bangladesh Chamber of Commerce & Industry (IBCCI), Bangladesh Women Chamber of Commerce and Industry (BWCCI), Women Entrepreneurs Network for Development (WEND), and Anti-Tobacco Media Alliance (ATMA) also took part in the budget-preparatory consultation.
The BCCCI also proposed duty-free or at least minimal-duty facility on electric motorcycle import while urging the revenue authority to differentiate between HS Code value of completely built-up (CBU) and completely knocked-down (CKD) electric cars and motorcycles.
Meanwhile, IBCCI secretary-general S M Abul Kalam Azad urged the revenue authority to determine tariff value of lubricating oil.
He says tariff value on base oil, the raw material of lubricating oil, is fixed at import stage but there is no local tariff value for processed products.
The IBCCI also pleads for removing e the existing 5.0-per cent tax at source and 3.0-to 7.0-per cent advance income tax (AIT) on used lube-oil and engine oil like burnt Mobil.
On their part, BWCCI urged the government to allocate at least Tk 2.0 billion in the next budget for pandemic-hit women entrepreneurs in SME sector.
It feels the tax-free income ceiling for women should be raised from Tk 350,000 to Tk 450,000 in the upcoming budget for FY 2022-2023.
The chamber also seeks continuation of the VAT exemption on showrooms of women-led businesses in the next fiscal, which has been in effect since FY 2019-2020.
Besides, WEND proposed lowering corporate tax for women-owned non-publicly traded companies to 25 per cent from 30 per cent.
They also seek the existing 0.5-per cent Tax Deducted at Source (TDS) for women-owned export-oriented industries to be abolished.
The platform also calls for reinstating VAT exemption for women-led businesses having annual turnover of Tk 5.0 million, which was abolished in 2019.
Meanwhile, Anti-Tobacco Media Alliance (ATMA) proposed introducing a tier- specific supplementary duty (SD) with uniform tax burden (excise share of 65 per cent of final retail price) across all cigarette brands.
For low-tier cigarettes, ATMA proposes setting the retail price at Tk 50 for 10-stick packs, followed by Tk 32.50 as specific SD.
The platform also wants retail price of medium-tier cigarette at Tk 75 for 10-stick pack and Tk 48.75 SD while for high and premium tier, the retail price be fixed at Tk 120 and Tk 150 respectively per 10-stick pack and SD of Tk 78 and Tk 97.50 respectively.
It also urged the NBR to increase prices of smokeless tobacco products like Jarda and Gul by setting the price at Tk 45 per 10-gram jarda and Tk 27 as SD, and for per 10-gram gul, the price should be Tk 25 and SD Tk 15.00.
In response to ATMA's proposals, the NBR chairman said, "We are aware of the massive healthcare cost incurred through tobacco use, though taxation and price increase involve a number of other factors. We want to see tobacco use decreasing."
However, stating that increasing the price of cigarettes does little to keep the youths out of addiction, he said the problems should be addressed socially through anti-tobacco campaigns
Mr Muneem points out a dilemma on this score: if the price of cigarettes increases, the overall expenditure of low-income families will increase, and due to excessive cost on cigarettes, children of these families may be deprived of getting proteins.
"By keeping cigarettes out of reach, I do not want to see youths approaching towards other drugs," he further says to the campaigners against smoking and tobacco uses.
He adds: the revenue authority will take decision about cigarettes after considering the public-health issues.
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