EPZ firms awarded extended bond licence facility

The government has announced an extension of fiscal benefits for companies operating within the country's Export Processing Zones (EPZ) as part of its ongoing efforts to streamline business processes and reduce operational costs.
Effective immediately, the customs authority, which falls under the purview of the National Board of Revenue (NBR), has revised its regulations to grant EPZ companies the ability to obtain bonded-warehouse licences for a period of three years. This marks an extension from the previous two-year licensing period.
Besides, EPZ factories will now have the option to renew their bond licences every three years, providing them with increased flexibility and longer-term planning opportunities.
Conversely, companies located outside the EPZ will continue to operate within the existing framework of two-year bond licences.
However, the EPZ companies will still need to undergo an annual audit under their respective bond commissionerate.
The revenue board, in a circular dated May 25, 2023, officially outlined the implementation of these new benefits for EPZ firms, reflecting the government's commitment to creating a favourable business environment and attracting foreign investment.
Md Khorshid Alam, executive director of the Bangladesh Export Processing Zone Authority (BEPZA), said, "It's a welcome step by the government to facilitate existing investors by offering them simplified services."
He said that it was a strong demand from the EPZ investors to ease doing business in Bangladesh. "We conveyed the investors' demand to the NBR. It would send a positive message to investors about the smooth coordination between BEPZA and NBR."
Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), appreciated the decision, by saying that it would reduce the time required for the renewal of bond licences.
Although the BGMEA had previously demanded the extension for all export-oriented companies, Mr Azim said that it would initially benefit the exporters in EPZs.
Export-oriented industries under the EPZ are entitled to enjoy the bonded warehouse facility for the import of raw materials without paying duty taxes, on the condition of export.
The NBR has offered this extended facility by amending the 'Bonded Warehouse Licencing Rule-2008' of the Customs Act-1969.
Customs officials said that this facility, valid for a period of three years for bond licence renewal, will be applicable to EPZ companies that perform audits of their export-import activities.
To ensure compliance, the condition has been included in the Statutory Regulatory Order (SRO) as many exporters were refraining from conducting audits annually, the officials added.
A senior customs officer said the regular audit of export-import activities has started being enforced by the bond commissionerate, after it moved to ensure compliance by not issuing Utilisation Permission (UP) and other approvals without an audit.
Currently, some 6,000 export-oriented companies hold bonded warehouse licences. To ensure compliance, customs has made the maintenance of a register mandatory from July 1, 2023, for all companies holding bond licences.
According to the Finance Bill-2023, presented in the national parliament on June 1, 2023, the owner of the warehouse holding the bond licence must register local purchases or import details.
This step will enable customs officials to keep track of all goods and prevent the abuse of the duty-free facility.

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