Tax holiday facility likely to continue
Thursday, 13 March 2008
Doulot Akter Mala
The government might continue the tax holiday facility, which expires in June this year, to enable the local industry sustain themselves in the competitive global market which is experiencing an economic slowdown.
A high-powered committee is meantime scrutinising the impact of tax holiday it had on the national economy in previous years compared to revenue loss.
The high-powered committee has been conducting a study to find out the justifications on continuation of the tax holiday, said NBR chairman Mohammad Abdul Mazid.
He said the tax holiday facility should not be bound for a specified period. Rather, it should be offered on the capability of local industries.
"Some industries often cash-in by abusing the facility offered, so the government will have to be careful while offering those facility on the basis of eligibility," he said.
Official sources said the NBR would propose continuation of the facility in a limited scale and for a specific period.
It is imperative to continue the facility for encouraging investments in some sectors, where it is needed most, the source said. Tax exemptions and tax holiday will continue although International Monetary Fund (IMF) has been repeatedly pressing for withdrawal of those facilities, he said.
The government had withdrawn tax exemption facilities from 11 sectors in 2004, from seven sectors in 2005 and from five sectors in 2006.
At present, the tax-GDP ratio in the country is over 9.0 percent--the lowest in the Southeast Asia.
The IMF has suggested to increase the ratio to 12 percent by 2008, but at the same time urging Bangladesh to withdraw all exemptions and tax holiday.
The government will consider withdrawal of tax holiday when the particular sector has become self-reliant, sources said.
The government might continue the tax holiday facility, which expires in June this year, to enable the local industry sustain themselves in the competitive global market which is experiencing an economic slowdown.
A high-powered committee is meantime scrutinising the impact of tax holiday it had on the national economy in previous years compared to revenue loss.
The high-powered committee has been conducting a study to find out the justifications on continuation of the tax holiday, said NBR chairman Mohammad Abdul Mazid.
He said the tax holiday facility should not be bound for a specified period. Rather, it should be offered on the capability of local industries.
"Some industries often cash-in by abusing the facility offered, so the government will have to be careful while offering those facility on the basis of eligibility," he said.
Official sources said the NBR would propose continuation of the facility in a limited scale and for a specific period.
It is imperative to continue the facility for encouraging investments in some sectors, where it is needed most, the source said. Tax exemptions and tax holiday will continue although International Monetary Fund (IMF) has been repeatedly pressing for withdrawal of those facilities, he said.
The government had withdrawn tax exemption facilities from 11 sectors in 2004, from seven sectors in 2005 and from five sectors in 2006.
At present, the tax-GDP ratio in the country is over 9.0 percent--the lowest in the Southeast Asia.
The IMF has suggested to increase the ratio to 12 percent by 2008, but at the same time urging Bangladesh to withdraw all exemptions and tax holiday.
The government will consider withdrawal of tax holiday when the particular sector has become self-reliant, sources said.