Source tax amount from exports doubles to 0.5 percent
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Exporters will face 0.5 percent tax at source of their export earnings from the next fiscal year as the prevailing 0.twenty five percent tax benefit is defined to end this fiscal year, regarding to tax proposals located by Finance Minister AHM Mustafa Kamal for the 2020-21 fiscal.
However, existing reduced corporate tax rewards for garments and knitwear sectors have already been extended for just two years to 2022 just as the power will expire in June 30 this season.
Apparel makers, who account for a lot more than 80 percent of the country's export revenue, currently enjoy 12 percent corporate tax on incomes, almost three times significantly less than the current corporate tax of 35 percent for non-listed businesses.
The rate of corporate tax is 10 percent for holders of green building certificates.
Taxpayers found in the garments sector will be benefited from the measure, Kamal said found in his budget speech located at the parliament today.
The maneuver comes at the same time when the worst ever recession since World War 2 -- because of the Covid-19 pandemic -- shattered global demands, resulting in dip in earnings from shipments from Bangladesh.
Export receipts plunged 18 percent year-on-year to $31 billion in July-Might of the existing fiscal year from a year ago.
On the other hand, shipments trebled to practically $1.5 billion in-may from just over half of a billion in April this season, according to Export Promotion Bureau data.
Income tax laws stipulates that exporters pay a 1 percent supply tax on the proceeds of their exports. However the NBR cut the fee through notifications on different occasions in the past two years when confronted with demands from exporters.
The NBR reduced source tax on export earnings of garment twice in fiscal 2018-19 -- from 1 percent to 0.60 percent in September 2018 and additional to 0.twenty five percent in January another year -- following pleas from garment makers.
As 1 percent fee of source tax on exports became effective at the start of this fiscal yr in July 2019, the NBR slashed the price to 0.25 percent later on in October and said the privilege would expire on June 30, 2020.
The official said changes have already been brought in the income tax to fix the source tax rate for exporters at 0.5computer from the next fiscal time with the aim to enable entrepreneurs to accomplish long-term planning.
Source: https://www.thedailystar.net
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