Govt plans to waive VAT for goods of EZs

The government plans to put on the offer a bundle of incentives to lure foreign investors into the economic zones (EZs), officials said.

Both the developers to be engaged in developing the special economic zones and the investors would be entitled to derive benefits from the package deals, they said.

The plans on offering incentives were discussed at a recent meeting held at the Prime Minister Office (PMO) with Md. Abul Kalam Azad, Senior Secretary of the PMO, in the chair.

"The government wants to offer tax-holiday facility for the investors in the economic zones up to five to ten years and seven years for the developers," a high official at the Bangladesh Export Processing Zones Authority (BEPZA) told the FE Monday.

He said the government also wants to allow duty-free import of all types of machinery, industrial raw material and construction materials.

Furthermore, the government will not impose value-added tax (VAT) on the produced goods.

However, the meeting sources said, there is need for opinions on the issues from the National Board of Revenue (NBR) before finalization.

The official, assigned for developing the incentive packages, presented the offers in the last meeting held on September 02.

Finally, the incentive offers will be presented at the next meeting that will be held shortly.

It's for the country's benefit if the government comes up with incentive packages that can promote foreign direct investment (FDI), sources concerned said.

A package of incentives is set to lure foreign investors and help boost the country's economy, they observed.

The PMO, the Bangladesh Economic Zones Authority (BEZA), the NBR, the finance division, Bangladesh Bank, foreign ministry, the Board of Investment (BoI), Public-Private Partnership (PPP) office and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) will work in implementing the incentive packages, according to the last meeting sources.

Foreign investors are interested to invest in the country due to lower salary structure of its labour, despite various limitations, it was noted at the meeting.  

Sources said the Bangladesh Economic Zones Authority (BEZA) has started to work for preparing an incentive package to attract foreign investment into the country.  

"We collected information from the neighbouring or adjacent countries as to what kinds of opportunities have been provided to foreign investors in those countries," a high official of the BEZA told the FE.

"We followed the rules and regulations of India, Thailand, Myanmar, Malaysia, Vietnam and the Philippines to forward the move," he said.  

Opinion of the NBR has to be taken for each item of the proposed incentive packages.

Also, existing opportunities of the different countries have to be mentioned separately, the meeting minutes said.

In 2012, the BEZA governing board decided to establish five economic zones in the country. Proposed locations of the zones are Mongla in Bagerhat, Sirajganj, Rajshahi, Anwara and Mirersarai in Chittagong and Moulvibazar.