Supermarkets seek cut in duty on capital machinery import
Saturday, 1 November 2008
Doulot Akter Mala
Country's supermarkets need government support to thrive their business alongside promoting the agro-based sector, said market operators and businessmen.
Although the dependence of city people has gradually been increasing on supermarkets to buy quality products, the growth of the sector is yet to reach a satisfactory level, they observed.
Presently, there are around 90 supermarkets in the country, most of which are city-based.
Mainly time constraints and busy life push most of the middle group of people towards supermarkets from the conventional kitchen markets.
Market insiders said the country's supermarkets have to bear the burden of higher establishment costs and tax incidence in running their business.
Supermarkets could emerge the most reliable places for quality foods and kitchen items in the wake of the worldwide concern over food safety, they mentioned.
Talking to the FE, Bangladesh Supermarket Owners Association (BSOA) President Niaz Rahim said: "The government is considering operation of supermarkets on a commercial basis as those are promoting the country's agro-based sector."
As per industrial policy, supermarkets are considered as an industry. So it deserves the government facility on offer to an industry, said Mr Rahim, who is also owner of Agora, the largest supermarket group in the country,
Recently, the BSOA urged the government to give them the same tax benefit, which is enjoyed by an industry on import of capital machinery.
In the budget for the current financial year, the government has introduced 3.0 per cent duty on import of capital machinery for industrial purpose.
"Supermarkets should enjoy the same rate of duty on import of its capital machinery," he said.
Presently, the superstores have to pay 25 per cent duty on capital machinery import.
The association sources said the supermarket owners have to carry 70 to 75 per cent tax including customs duty, value added tax, and advance income tax.
The Board of Investment (BoI) and the country's apex chamber body have already requested the National Board of Revenue (NBR) to consider the matter with due priority.
The supermarkets are using the capital machinery for production, preservation and distribution.
However, the machinery used by the supermarkets is not included in the capital machinery list of the revenue board.
"We have requested the revenue board to include the supermarket-imported capital machinery in the list so that we could get the same duty exemption," said Mr. Rahim.
Talking to the FE, a senior customs official said: "We will consider the plea after proper scrutiny. The government offered the low duty rate to the manufacturing sector."
The NBR might consider granting the reduced tax rate to some of the capital machinery of supermarkets.
Country's supermarkets need government support to thrive their business alongside promoting the agro-based sector, said market operators and businessmen.
Although the dependence of city people has gradually been increasing on supermarkets to buy quality products, the growth of the sector is yet to reach a satisfactory level, they observed.
Presently, there are around 90 supermarkets in the country, most of which are city-based.
Mainly time constraints and busy life push most of the middle group of people towards supermarkets from the conventional kitchen markets.
Market insiders said the country's supermarkets have to bear the burden of higher establishment costs and tax incidence in running their business.
Supermarkets could emerge the most reliable places for quality foods and kitchen items in the wake of the worldwide concern over food safety, they mentioned.
Talking to the FE, Bangladesh Supermarket Owners Association (BSOA) President Niaz Rahim said: "The government is considering operation of supermarkets on a commercial basis as those are promoting the country's agro-based sector."
As per industrial policy, supermarkets are considered as an industry. So it deserves the government facility on offer to an industry, said Mr Rahim, who is also owner of Agora, the largest supermarket group in the country,
Recently, the BSOA urged the government to give them the same tax benefit, which is enjoyed by an industry on import of capital machinery.
In the budget for the current financial year, the government has introduced 3.0 per cent duty on import of capital machinery for industrial purpose.
"Supermarkets should enjoy the same rate of duty on import of its capital machinery," he said.
Presently, the superstores have to pay 25 per cent duty on capital machinery import.
The association sources said the supermarket owners have to carry 70 to 75 per cent tax including customs duty, value added tax, and advance income tax.
The Board of Investment (BoI) and the country's apex chamber body have already requested the National Board of Revenue (NBR) to consider the matter with due priority.
The supermarkets are using the capital machinery for production, preservation and distribution.
However, the machinery used by the supermarkets is not included in the capital machinery list of the revenue board.
"We have requested the revenue board to include the supermarket-imported capital machinery in the list so that we could get the same duty exemption," said Mr. Rahim.
Talking to the FE, a senior customs official said: "We will consider the plea after proper scrutiny. The government offered the low duty rate to the manufacturing sector."
The NBR might consider granting the reduced tax rate to some of the capital machinery of supermarkets.