VAT-exempted goods, services set to total 1500 from 1200

Essential goods and services under VAT exemption list are likely to be increased to 1,500 in the 2017-18 national budget from existing 1,200. Mild steel rod, edible oil, sugar, purchase of land and apartments might be exempted from payment of Value Added Tax (VAT) from July 01, 2017. Declaration on VAT exemption may come in the budget to be placed in parliament on June 01 next. VAT-exempted goods, services set to total 1500 from 1200 However, the tax authority is set to continue the VAT on English medium schools while all other educational institutions would be exempted from payment of VAT. Mostly essential goods, some 20 types of life-saving drugs, all types of medical services, agriculture sector and training activities are likely to be exempted from payment of VAT. Sources said prices of MS rod might increase substantially after implementation of the new VAT law as the product is currently enjoying tariff value. Earlier, the National Board of Revenue (NBR) said the MS rod is the only product that might be affected due to implementation of the new law.

Source:
http://print.thefinancialexpress-bd.com/2017/05/25/173432
http://www.thedailystar.net/business/more-products-be-vat-free-new-law-1410403
http://www.newagebd.net/article/16253/100-more-goods-services-to-be-on-vat-waiver-list
http://www.thedailystar.net/business/govt-looking-other-revenue-sources-offset-vat-rate-cut-muhith-1410397

Government may raise turnover tax ceiling to BDT 10.0 million

The government instead of lowering the VAT rate significantly might incentivize businessmen by raising turnover tax ceiling to over BDT 10.0 million from BDT 8.0 million. Finance Minister A M A Muhith said Wednesday while briefing newsmen after a meeting with visiting JICA President Shinichi Kitaoka at his secretariat office. Mr Muhith also said he will meet Prime Minister (PM) Sheikh Hasina on Thursday (today) for finalizing the new VAT (value added tax) rate. But the minister again turned down the plea of more than one VAT rates. The new VAT rate is set to be 15%, as the government is going to enforce the VAT and SD Act 2012 from July. However, in the face of strong protest by business community the government is considering lowering the rate to some extent.

Source: http://print.thefinancialexpress-bd.com/2017/05/25/173431

Tax at source for export sector to rise in budget

Commerce minister Tofail Ahmed on Wednesday said that the government would raise the tax at source for the export sector in the upcoming budget for the next fiscal year. He, however, did not specify how much the rate would be increased. ‘Countries like India give many benefits to their export sector. Although we say we give such benefits to our exporters, but we cannot actually give such benefits. For example, the tax at source [for export sector] which is now 0.7% will be raised [in the budget],’ he said while speaking at a roundtable on ‘trade and exchange rate policies for export diversification’ organised by the Policy Research Institute of Bangladesh in the city. He said that like the previous years, exporters would go to the prime minister with demand for reducing the source tax after its increase this year. At the roundtable, experts called for providing equal policy supports to all export sectors to help diversify the country’s export basket. They also suggested an effective exchange rate and policy reform to boost foreign direct investment for export diversification. They said other exporting sectors are not getting the same benefit from the government as enjoyed by the readymade garment sector.

Source: http://www.newagebd.net/article/16256/tax-at-source-for-export-sector-to-rise-in-budget-says-tofail

Cut tall corporate tax to attract investment

Business leaders said the government should lower the ‘high rate’ of corporate tax on a par with other major economies to attract both foreign and local investment in Bangladesh. “Whereas the corporate tax is following a downward trajectory in every major economy in the world in recent times, it is still hovering around 40-45 per cent in Bangladesh,” former President of the Americ/an Chamber of Commerce Aftab Ul Islam said Wednesday at a meeting in Dhaka. He cited examples of various other countries across the globe slashing their corporate-tax rates to encourage trade and business and investment.

Source: http://www.thefinancialexpress-bd.com/2017/05/25/71529/Cut-tall-corporate-tax-to-attract-investment

Cabinet body okays Reliance’s 718 megawatt plant at Meghnaghat

India’s Reliance Power Ltd will build a 718-megawatts (MW) imported LNG (liquefied natural gas)-based power plant at Meghnaghat in Narayanganj. The Cabinet Committee on Public Purchase (CCPP) approved awarding the project to the firm on Wednesday. The Indian company will ink a power purchase agreement (PPA) and an implementation agreement to execute the power plant project. The state-run Bangladesh Power Development Board (BPDB) will purchase electricity from the proposed power plant for 22 years at a levelised tariff rate of 7.31 US cents (BDT 5.85) per unit (1 kilowatt-hour), Additional Secretary of Cabinet Division Muksudur Rahman Patwary told newsmen after the CCPP meeting. The total project cost is around BDT 809.5 billion, he said.

Source:
http://print.thefinancialexpress-bd.com/2017/05/25/173439
http://www.thedailystar.net/business/reliance-gets-cabinet-nod-set-power-plant-750mw-1410400

Export basket should be diversified

Bangladesh has the potential to export footwear, sportswear, denim products, toys, bags and electronic goods along with garment items, a top banker said yesterday. The government can give go-ahead to foreign direct investments in the sectors, said Abrar A Anwar, CEO of Standard Chartered Bangladesh. The government should also find out the reasons why the foreign funds are not coming to the sectors despite having huge potential, Anwar said. He spoke at a programme on export diversification, organised by the Policy Research Institute at its office in Dhaka. As for example, Indonesia and Malaysia have received a lot of FDI in the sectors as many have already relocated their business from China to the two countries because of high cost of production, he said. The cost of production did not decrease in Bangladesh although the local currency appreciated against the US dollar, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry. She marked the inefficiency of the Chittagong port as one of the major causes responsible for the high cost of production. Businessmen have to rely on expensive air shipments due to the poor performance of the country’s premier sea port, Nihad said. She suggested introducing an efficient management for the currency exchange system. Zahid Hussain, lead economist of the World Bank in Dhaka, suggested the local currency should be devalued.

Source: http://www.thedailystar.net/business/export/export-basket-should-be-diversified-analysts-1410394

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