IMF wants to lift tax rebate facilities for 33 industries
The International Monetary Fund (IMF) has recommended lifting the tax rebate facilities for 33 industries. These industries have been enjoying tax rebate facilities at various rates for up to 10 years.
The National Board of Revenue (NBR) has already started working on finalising the industries to meet the condition of the IMF, NBR sources said.
An IMF delegation is visiting Dhaka at the moment before the disbursement of the third instalment of the loan taken by Bangladesh to review the overall economic situation. The IMF delegation is scheduled to hold meetings with the NBR officials to learn about the revenue collection related issues and the revenue sector’s progress to meet the conditions set by the IMF.
Earlier, a technical team of the IMF held several meetings with NBR officials last month. The IMF team recommended lifting tax rebate facilities. It has been learnt that the visiting IMF delegation may want to know about the progress in implementing the recommendations. The meetings between the IMF delegation and NBR start next week.
In 2022, Bangladesh made a loan appeal to the IMF. The international agency granted Bangladesh a loan of USD 4.7 billion in 2023. So far Bangladesh has received two instalments of the loan.
IMF said the tax rebate facilities are to be lifted in June 2025 as per the Income Tax Act of the country. The IMF advised not renewing this deadline again after June next year.
The fourth part of the sixth schedule of the Income Tax Act grants 33 types of organisations in the manufacturing sector a 10-year-tax-rebate facility. The sectors in this list includes active pharmaceutical ingredient and radiopharmaceuticals, agricultural equipment, automated bricks, automobiles, barrier contraceptive and rubber latex, basic elements of electronics such as resistor, capacitor, transistor, integrated circuit and multi-layer PCB, bicycles and their spare parts; bio-fertilizers (organic fertilisers); biotechnology based agricultural products; boilers and their spare parts and equipment; compressors and their spare parts; computer hardware; furniture; household appliances (blender, rice cooker, microwave oven, electric oven, washing machine, induction cooker, water filter); pesticides and pesticides; leather and leather products; LED television; processing of locally grown fruits and vegetables; mobile phone; petrochemicals, pharmaceuticals; plastic recycling; textiles machinery; tissue grafting; toys; tire manufacturing; electrical transformers; manufacturing of synthetic fibres or man-made fibres; manufacturing of automobile parts and products; automation and robotics design, manufacturing and parts and components thereof; design and manufacture artificial intelligence based systems; nanotechnology based product manufacturing; aircraft heavy maintenance services, spare parts manufacturing.
On condition of anonymity several commissioners told Prothom Alo that the NBR already gets a huge target for revenue collection every year. Adding to that is the pressure from the IMF for revenue growth. Therefore the tax rebate facilities could be lifted for some of the sectors with low investments or lack of potentiality.