SME Foundation wants tax benefit for the sector

Dhaka, April 29: The SME Foundation yesterday urged the government to make a raft of changes in the tax and VAT regime in the upcoming budget for the betterment of the sector.

The foundation placed the demands while submitting their proposals for the budget for fiscal 2011-2012 at a meeting with the National Board of Revenue (NBR) in the city.

NBR Chairman Nasir-uddin Ahmed, SME Foundation Chairperson Aftab ul Islam, its Managing Director Syed Rezwanul Kabir and other senior officials of the two government agencies were present.

The foundation suggested the government impose duty on all imported raw materials for the growing plastic industry in the lowest slab of the tax regime at 3 percent, cutting it from the existing 5 percent. Export oriented plastic industries should be allowed inter-bond transfer facilities, the SME Foundation said.

The foundation urged the NBR to double the time for bond renewal from one year, as the annual renewal system involves cost and time.

It said value added tax (VAT) should be completely withdrawn from powdered milk produced from liquid milk supplied by domestic dairy farms.

Advanced income tax on exports of leather goods and footwear should be cut by half to 0.25 percent, which will act as incentive for the industry, it proposed.

The foundation said the government should specify the agro-processing industries that will enjoy income tax exemption for the next five years to 2016.

In 2008, the government exempted agro-processing industries from paying taxes. But as the authorities did not specify the industries eligible for the tax holiday, many such industries are not getting tax amnesty despite being agro-processing farms, the foundation said.

It proposed that shops or enterprises run by women entrepreneurs should get income tax and VAT exemption facility for two years.

The foundation urged the tax administration to give cash incentives against exports of plastic products, leather goods and footwear. The women exporters should be given 5 percent more incentives than their male counterparts, it added.

Source: The Daily Star