Sunday, September 24, 2017
Bangla Apparel Desk
August 09, 2017
The government has reduced the income tax at source on export earnings to 0.70 per cent from the existing 1 per cent for the current fiscal year 2017-18 following demands of exporters.
The National Board of Revenue on Saturday issued a statutory regulatory order lowering the tax, known as export tax, for all sectors except jute and jute goods with retrospective effect from July 1.
Exporters will enjoy the benefit till June 30, 2018, the SRO stated.
According to the SRO, the benefit will be applicable for the export of knitwear, woven garments, terry towel, carton and accessories of garments industry, frozen food, vegetables, leather goods, packed food and any other goods and the banks will deduct the tax at the time of crediting the export proceeds to the account of the exporter.
The government in the fiscal year 2015-16 fixed the tax at 0.60 per cent for jute and jute goods until June 2019.
Officials of the revenue board said that the government would get at least Tk 900 crore less in revenue due to reduction of the source tax on export.
The NBR initially estimated that it would get the amount as additional revenue from the sector after it increased the rate to 1 per cent from the last year’s 0.70 per cent.
According to the Income Tax Ordinance-1984, the rate of source tax on export is 1 per cent since the FY 2015-16 but the revenue board reduced the rate through issuing SRO following demands from the business community.
The source tax will be considered as advance tax as well as minimum income tax on export proceeds, officials said.
They said that exporters would have to pay additional income tax if they show additional income from the export sector in the income tax returns.
There are different corporate income tax rates for different sectors in the country.
The revenue board on Saturday also issued another SRO reducing the corporate income tax for knit wear and woven garments manufacturers and exporters to 12 per cent for the current fiscal year from the previous year’s 20 per cent.
The rate of corporate tax, however, was reduced to 10 per cent for green factories which will have internationally recognised green building certification.