Govt considers tax rate cut on local biscuits after push from lobbyist gr

The government is reviewing a proposal to reduce tax rate on biscuit after a push from local manufacturers.
Economic affairs adviser to the Prime Minister Dr Mashiur Rahman recently sent the proposal of the domestic companies to cut back on Value Added Tax (VAT), income tax and tariff value of locally -produced biscuits.
He forwarded the proposal of Bangladesh Auto Biscuit and Bread Manufacturers Association (BABBMA) to the finance minister.
Industry insiders said due to tax measure in the fiscal year 2015-16 and 2016-17, imported biscuits became cheaper than those of locally-made products.
"In 2015-16 budget, the supplementary duty (SD) on imported biscuit was reduced from 60 per cent to 45 per cent, but tariff value on locally-produced machine made biscuits was increased by 20 per cent to 30.77 per cent," said Md Shafiqur Rahman, president of BABBMA, in a letter to Dr Mashiur Rahman.
In the current fiscal year, the government reduced SD on imported biscuits, but kept higher tariff value on locally-produced biscuits unchanged.
" … steps have made the imported biscuits cheaper as against increase in costs of local machine made biscuits," said the letter.
The association leaders proposed to set tariff value of local biscuits to Tk 100 per kilo gramme for crackers, digestive, chocolate biscuit, Tk 80 for cream biscuit and Tk 65 for normal biscuit same as the rates of FY 2014-15.
In the FY 16 and 17, the government raised the rate to Tk 120, Tk 100 and Tk 85 for a kg biscuit respectively.
The association also requested the government to reduce the rate of advance income tax on distributors' commission to 3.0 per cent from existing 5.0 per cent.
Distributors are normally getting 4.0 to 6.0 per cent as commission, it said.
The association also called for bringing down the rate of VAT at source from the bill of transport contractors, which was initially 4.50 per cent. The rate was increased to 7.50 per cent in FY 16 and to 10 per cent in the budget for FY 17.
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