Cut in tax at source for exports likely to be reduced

A Tk 3.4 trillion budget for the new financial year is about to be passed with a reduction in tax at source for readymade garment exports and other changes in the tax structure.

Besides, a cut in the tax at source for exporters of jute and jute products, leather and leather goods, packaged food, frozen food, and vegetables is also likely.

Finance minister AMA Muhith gave this indication to bdnews24.com with the budget for the 2016-17 financial year about to be passed in Parliament. 

Each year, changes are made to the budget proposals in the light of suggestion made by MPs during debates before they are passed by the House. 

When asked about the changes in the offing, Muhith told bdnews24.com: “There will be no major changes to my budget proposals this year. There will be some minor changes concerning taxes.” 

Asked of a possible cut in the tax at source for readymade garment exports, Muhith said: “There is a strong demand for this; let us see.”

Muhith, happy with the budget debates in a House devoid of BNP representation, said: “There have been criticisms on some counts; there have been praises for others. Certain additions and alterations have been suggested.”

The finance bill on Wednesday and the main budget on Thursday would be passed by taking these into consideration, he added.

Muhith presented a Tk 3.4 trillion budget on Jun 2 for the 2016-17 financial year starting on Jul 1.

Senior ministers and MPs have already given their views on the proposals. There will be further discussion on Wednesday and Thursday. 

The last word will come from Prime Minister and Leader of the House Sheikh Hasina.

The finance bill will be passed on Wednesday with the parliament session commencing at 10am. Sheikh Hasina, the head of the government, will speak before the bill is passed. 

Next, the finance minister would deliver is closing address and place the finance bill for passing.
 
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, who has presented his eighth budget in a row, faced sharp criticism from apex business body FBCCI.
 
Its president AM Ahmad said in a press conference: “We had made 447 suggestions after painstaking work. Of them, only 53 have been accepted or just about 10 percent.

“As the FBCC president I am ashamed of this.”

Moreover, forums of readymade garment manufacturers such as the BGMI, BTMA, BKME and other bodies connected with the trade have been demanding a cut in the tax at source for garment exports.

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.

A member of the National Revenue Board had hinted that the tax might be reduced to 0.8 percent at the time of passing the finance bill.

The budget proposes a 1.5 tax at source for jute and jute products, leather and leather goods, packaged food, frozen food, and vegetables as well. But indications are that the rate might be brought down to one percent.
 
A proposal to reintroduce VAT on Hawaii slippers and plastic shoes worth up to Tk 120 may also be withdrawn.

VAT exemption on biscuits, cakes and bread priced Tk 100 per kg may continue, though the budged proposed the scrapping of such exemption.
 
Officials of National Board of Revenue hinted of revoking the decision to impose VAT on meditation services.    ok Now