The National Board of Revenue (NBR) has withdrawn 5 percent advance income tax (AIT) on the import of edible oils, both crude and refined. The move has been made for the industries located outside the economic zones to remove this disparity.
It has also waived AIT on some raw materials of refining factories and the import of all types of capital machinery by manufacturers.
Income tax wing of the revenue board on August 28 issued a pre-publication of a statutory regulatory order amending the Income Tax Rules-1984 in this connection.
It also sought opinion or objection from stakeholders on the decision within 15 days.
The pre-publication will be considered as final with retrospective effect from July 1 if no opinion or objection is received.
The NBR also imposed 2 percent AIT on import of preparations of a kind used in animal feeding.
According to the SRO, there will be no AIT on import of soya bean oil and its fractions, whether or not refined, but not chemically modified, crude oil, whether or not degummed, other palm oil including refined palm oil, synthetic staple fibres of polyesters and artificial staple fibres.
Earlier, edible oil refiners located inside the economic zones under the Bangladesh Economic Zone Authority had been enjoying exemption from payment of AIT.
Refiners located outside the zones claimed that the disparity in tax would create imbalance in pricing of finished products in domestic market and kicked many factories out of competition.
The NBR waived the all refiners from payment of AIT as it found the claim justified.
Regarding withdrawal of AIT for all capital machinery import, they said that the decision was taken to facilitate industrialisation in the country and reduce the cost of investment.
Previously, the AIT exemption benefit at the rate of 5 percent was given only to that capital machinery which was exempted from payment of customs duty or enjoyed concessionary rate of customs duty.
Now the AIT will be applicable only to import of capital machinery by commercial importers as they make profits by selling the products at the local market.
According to the customs data, the NBR generally offers duty concession on import of 662 types of capital machinery as manufacturers can import the items by paying customs duty at reduced rate of 1 percent.
Some other manufacturing industries like compressor, motorcycle and mobile manufacturers also availed either complete exemption of customs duty or reduced rate to 5 percent on import of the items under special orders of the NBR.