Future industries in Dhaka, its suburbs may face higher taxes

Industries to be set up in Dhaka city and its adjoining areas might face tax rates higher than those located in other areas of the country, the National Board of Revenue (NBR) Chairman, Ghulam Hussain, said Tuesday.
The government is contemplating higher tax rates to discourage establishment of new industries in the capital and its adjacent areas that are already overcrowded with industrial units, Hussain said adding that some units need to be relocated in other districts.
The NBR is now examining the possibility of offering special tax benefit for shifting existing industrial units from Dhaka to other cities and also for setting up new ones there.
Mr Hussain lamented that Dhaka had been adjudged the worst city on earth, in terms of livability, and said a policy guideline should be formulated to save the city.
The NBR chief made these comments at a pre-budget meeting with the Bangladesh Chamber of Industries (BCI) at the NBR premises.
BCI senior vice-president Mostafa Azad Chowdhury Babu placed the BCI budget proposals to NBR for the fiscal year (FY) 2014-15.
BCI leaders also proposed to offer special tax benefits to encourage investors for setting up new industries in under-developed and remote areas of the country.
The NBR chairman said the existing industries in Dhaka would have to pay higher tax for running their operation in capital city.
The NBR chief underscored the need for luring investments to districts to help alleviate poverty through the process of industrial decentralization.
In the meeting, the BCI leaders sought the reduction of duty on raw materials, which are not produced in the country, to make the local manufacturing industry competitive. They also recommended for slapping of higher supplementary duty (SD) on the imported finished and luxury goods.
The chamber wanted the scrapping of the provision of 0.5 per cent income tax on the total turnover of companies, irrespective of their loss and profit,
Income tax related proposals of BCI include, increase of the tax free income limit for individual taxpayers to Tk 2,50,000, reduction of corporate tax to 20 per cent for publicly traded companies and to 30 per cent for private limited companies.
The chamber leaders also sought reduction of import duty on parts of air conditioner, refrigerator, freezer for local industries and increase in duty on finished LED and LCD television and motor cycle.
It also proposed reduced rate of VAT at 10 per cent on production stage and waiver of VAT on toys.