Automobiles, tyre industries to get 10-yr tax holiday in Bangladesh

Jasim Uddin
The government is likely to provide tax holiday benefit to some sectors including automobiles and tyre industries from the upcoming national budget to facilitate industrialisation in the country, officials of the finance ministry said.
They said that the proposed tax holiday facility would encourage setting up the import substitute manufacturing plants in the country which would create new employment opportunities as well as save foreign currency through reducing dependence on import.
Finance minister AMA Muhith might declare the benefits for 10 years for the sectors in the budget documents to be placed before parliament on next Thursday.
The tax holiday facility may also be provided for the bicycle and tunnel brick kiln technology sectors.
The sectors will be included in the Article 46 of Income Tax Ordinance-1984 under which newly established industrial undertakings were provided tax exemption for 10 years.
Local and foreign investors have been demanding the tax holiday facility for the sectors as some domestic and foreign companies have come forward to set up automobiles and tyre industries in the country.
Bicycle industry has also become one of the potential export-oriented sectors in the country.
Chittagong-based PHP Group has already taken an initiative to assemble and gradually go into production of Malaysian Proton cars in the country.
The initiative may be launched by the end of this year.
On the other hand, India and South Korea based car manufacturers have also expressed keen interest to invest in Bangladesh.
State-owned Pragoti has already started assembling of Mitsubishi jeep and microbus in the country.
Currently, around 15,000 cars are imported from Japan and some other countries. Of which, more than 70 per cent are reconditioned cars.
Officials of the finance ministry said that automobiles manufacturing industry would be able to change the scenario.
Indian CEAT tyre company is also going to set up a tyre manufacturing plant in the country.
The decision of providing tax holiday facility will also encourage other companies to invest in the sectors, they said.
Source: http://newagebd.net/125033/automobiles-tyre-industries-to-get-10-yr-tax-holiday/#sthash.ZQCtGBmn.dpuf

Bangladesh mulls heavy penalty for illegal employment of foreigners

Jasim Uddin 

Companies employing foreign nationals without securing necessary permits will have to pay as much 50 per cent of their total payable tax, or Tk five lakh, as a fine. The government is likely to impose the heavy penalty from the next fiscal year, officials of the finance ministry said. The National Board of Revenue will also deny all tax benefits given to the company if it finds even a lone illegal foreign worker working in the company, they said. Finance minister AMA Muhith may declare the imposition of penalty in the budget to be declared on Thursday. The revenue board will also include this provision in the Income Tax Ordinance-1984. The decision comes on the back of repeated failures of the government to rein in the illegal employment of foreign nationals in the country. There is no clear statistic on the number of foreigners working in the country, however, unofficial estimates vary from two lakh to five lakh people. ‘The government has taken the decision to crack down on companies employing unauthorized foreign workers to prevent employment of such workers in the country,’ a high official of the ministry told New Age on Sunday. He said that employment of illegal foreign nationals became widespread in recent years shrinking the job opportunities for the country’s skilled manpower. Many legal foreign workers also evade income tax with the help of their local employers, he said. Foreign nationals have pay income tax at the rate 30 per cent on their income. According to different government sources including Board of Investment, the NBR and special branch of Bangladesh Police, more than four lakh foreign nationals, mainly from neighboring India, Pakistan, China and Sri Lanka, and many from African and Western countries are working in the country, and most of them do not have work permits from the BoI. The actual number may even exceed such estimates. In 2013, India’s largest circulated technology magazine Siliconindia said in a report that a total of five lakh Indians were working in Bangladesh at that time and sent $3.7 billion as remittance. Bangladesh has become the fifth highest source of annual remittance for India. According to recent data of the BoI, only around 12,000 foreign nationals are working in the country with work permits from the board. A few thousand more foreigners are working in the country with permission from the Bangladesh Export Processing Zone Authority and a few hundred with permission from NGO Affairs Bureau. There are thousands of foreigners working in Bangladesh, particularly in readymade garment industry, buying houses, liaison offices of multinational companies, IT, different joint-venture companies and other manufacturing industries, but leave the country without paying taxes, officials of the revenue board said. They said that most of the foreigners entered Bangladesh on tourist visas and took up jobs with cover provided by local employers. The government took various steps in the past, including compiling a list of foreigners in the country, however, everything has failed to ebb the flow so far. The revenue board also failed to bring them under the tax net. 

source: http://newagebd.net/125168/govt-mulls-heavy-penalty/#sthash.e9BSihay.dpuf