Tax at source for exports at 0.7 percent in FY 2016-17, says finance minister

Tax at source for exports, including readymade garment will be revised to 0.7 percent, down from 1.5 percent in the proposed budget for the upcoming fiscal year, Finance Minister AMA Muhith tells Parliament.

The decision comes after Prime Minister Sheikh Hasina suggested the revision among others while speaking in the House during discussion on the budget proposal.

Muhith said he will also revoke the proposal to impose a 15 percent VAT on office space rent for Information Technology service providers.
 
As per tradition, the prime minister requests the finance minister after he makes his closing remarks and before the finance bill is placed for passing to introduce amendments if any.
 
Muhith presented a Tk 3.4 trillion budget on Jun 2 for the 2016-17 financial year starting on Jul 1.
 
The budget proposed a 1.5 percent tax at source on garment export prices (FOB), but Muhith has stepped back in the face of a stiff opposition from manufacturers.
 
But businesses said that it might lead to closure of factories.
 
During her speech over the budget proposals, the prime minister said, “Apparel businesses have requested a cut in the tax at source. I propose it to revise to 0.07 percent in an attempt continue the uptrend in export incomes.” 
 
In his closing statement, Muhith said, “Since the prime minister said, it stands cleared.”