Value Added Tax
260. The present government has undertaken various reform measures and changes in the national economy to improve the socio-economic condition of the country. As a part of the structural changes in the indirect tax system a new law titled “The Value Added Tax and Supplementary Duty Act, 2012” has been enacted in the Parliament in 2012. After thorough and detailed discussion with the business community, the Act has been put into force from July 1, 2019 with the aim of introducing a modern, investment and revenue friendly value-added tax system. In continuation of previous years, various steps have been undertaken in this year’s budget to mitigate the problems of taxpayers in implementing the new law. This year’s budget has been prepared with the objective of meeting the revenue target as well as improving ease of doing business. Expanding the VAT net is one of the key strategies to increase the tax to GDP ratio. The proposed budget places special emphasis on this issue. During the last two years, the normal pace of business and industry has been disrupted by the pandemic. Many small businesses have suffered badly. That is why in this year’s budget, special attention has been given not to increase the VAT burden on such businesses and that their working capital flows remain steady. I place the following proposals for the kind consideration of this august House with the objective of promoting economic growth and safeguarding the interests of both industries and consumers. In the process, we hope to increase revenue collection, raise the tax-to-GDP ratio, continue supporting local industries, make Bangladesh an attractive destination to foreign investors and nurture a tax compliance culture.
261. I am presenting the following proposals on the Value Added Tax and Supplementary Duty Act, 2012 and the Value Added Tax and Supplementary Duty Rules, 2016, to mitigate the practical and procedural complexities, to facilitate business and to increase revenue collection:
a) I propose to amend definition of "input", "centrally registered entity" in the Act and to include definition of "contract manufacturer" in the rules;
b) I propose for necessary amendments in the relevant section to bring the branch office or liaison office of foreign organizations located in Bangladesh under VAT registration;
c) As per the existing provision of the Act, there is obligation for a business entity to have more than one manufacturing unit for central registration. Considering the business realities, I propose to introduce a provision that a business entity may get central registration even if it has one or more manufacturing units, instead of two or more, subject to the condition that accounting of that business entity is kept in computerized, automated system;
d) In case of supply of prepaid telecommunication services, I propose to amend the concerned section to allow decreasing adjustment of supplementary duty similar to VAT;
e) I propose to withdraw the obligation of transacting in the banking channel for availing rebate in case of supply made between two business entities having same ownership and to add new provisions to the effect that the rebate can be availed even if the transaction is done through mobile banking;
f) I propose to bring necessary amendments in the relevant section of the input tax credit so that business entities may get rebate more easily;
g) I propose to make necessary amendments in the relevant section of partial input tax credit to make it more comprehensible;
h) To reduce production cost, I propose to include a provision for direct delivery of imported raw materials from the port to the contract manufacturer by the owner of raw materials;
i) In case of VAT deduction at source, I propose to increase the time of decreasing adjustment from 2 tax periods to 4 tax periods;
j) I propose that the invoice issued by the Mobile Financial Service (MFS) provider to be considered as VAT invoice in case of payment of electricity bill;
k) I propose to make necessary amendments in the relevant sections and rules of VAT deduction at source for the purpose of simplifying and making the provisions more consistent;
l) I propose to insert a new section in the law to refund VAT that is deposited mistakenly in the public treasury by an unregistered person;
m) In case of international tenders, I propose to make necessary amendments in the relevant rules in order to allow any kind of supply made against a contract, as is now accepted for L/Cs, to be treated as deemed export;
n) In case of late submission of return, I propose to make provision for obtaining permission within 7 (seven) days after the expiry of tax period instead of getting approval at least 7 (seven) days before the expiry of tax period;
o) I propose necessary amendments in the relevant section on tax determination in order to make it more understandable, clear and undisputed;
p) In case of supply of exempted goods and services, I propose to insert a provision to impose penalty instead of revoking the exemption facility when a violation of the conditions takes place.
q) I propose necessary amendments in some forms under the Value Added Tax Rules to reduce procedural complexity;
r) As per the guidelines of the World Customs Organization (WCO), I propose to amend the H.S. Codes of some goods of the First Schedule.
262. If the penalty imposed and interest charged is too high that creates practical complications and disrupts normal business activities in many cases. I, therefore, present the following proposals in order to make penalties and interests charged more tolerable for the business entities:
a) In case of failure or non-submission of VAT or turnover tax return within due date, I propose to reduce the amount of penalty from “10 thousand taka” to “5 thousand taka”;
b) I propose to reduce the amount of penalty from “equal” to “minimum half and maximum equal” of the amount of tax evaded;
c) I propose to incorporate provisions of non-imposition of penalty in case of unintentional mistake of the taxpayers and non-submission of return for in between the periods a company ceases its operation temporarily and resumes its operation;
d) I propose to accept depositing only a portion of the tax claimed, not the fine and penalty imposed, for submitting an appeal to any Appellate Authority;
e) I propose to incorporate a provision to extend the period for another 60 (sixty) days if a business entity fails to file an appeal within 90 (ninety) days in the Appellate Tribunal;
f) I propose to fix the time limit for charging interest on arrears of VAT up to a maximum of 24 months.
263. To ensure proper supervision of value added tax collection activities and increase revenue collection, I propose the following amendments to the relevant sections and rules;
a) At present the scope of zero-rated VAT is much wider for international transport, which is causing practical problems at the field level. So I propose to bring necessary amendments in this regard;
b) I propose to insert a provision in the law that VAT officials may request the concerned authorities to disconnect the electricity, gas and water connection of the VAT defaulting business entities;
c) I propose to bring the pending cases of the High Court under Alternative Dispute Resolution in order to make the Alternative Dispute Resolution (ADR) process more effective;
d) I propose to incorporate a provision to include "Cost and Management Accountants" alongside "Chartered Accountants" to assist in Alternative Dispute Resolution;
e) I propose to amend the law that no investigating agency can conduct any further investigation in the matter settled through Alternative Dispute Resolution (ADR);
f) At the time of audit, it becomes necessary to review the report of the Credit Rating Agency alongside the annual audit report. Therefore, I propose to incorporate a provision to include "Credit Rating Agency" in the relevant section to help VAT officers when necessary.
264. In order to increase revenue collection in the FY2022-2023, I present the following proposals:
a) I propose to impose 15 percent VAT on first class railway services in addition to air-conditioned services;
b) I propose to increase the amount of specific VAT by tk 200 per ton at manufacturing stage for different types of MS products;
c) I propose to withdraw the existing VAT exemption at the stage of production of Concrete Ready Mix;
d) I propose to withdraw the existing VAT exemption on ‘Meditation Services’;
e) I propose to withdraw the existing 5 percent VAT exemption at trading stage of mobile phone sets;
f) I propose to withdraw VAT exemption at manufacturing and trading stage of COVID-19 Test Kit, PPE, Protective Garments, Plastic Face Shields, Medical Protective Gear, Protective Spectacles, and Goggles for medical use and mask.
265. In order to attract domestic and foreign investment, create employment and keep the growth of domestic industrial development uninterrupted, I present the following proposals:
a) Extension of existing facility of paying 5 percent VAT to local manufacturer of LPG Cylinder for one year;
b) Withdrawing full exemption and imposition of 5 percent VAT at the local manufacturing stage on refrigerators and freezers and to continue existing exemption facilities on imported and local purchase of raw material and equipment till June 30, 2023;
c) Extension of existing VAT exemption facility for production of compressors of refrigerators and freezers till June 30, 2025;
d) Exemption of Advance Tax on imported raw materials of polypropylene staple fiber and keeping the existing exemption facility at the manufacturing stage;
e) In case of manufacture of Active Pharmaceuticals Ingredients (API), VAT exemption at local manufacturing stage and VAT (including Advance Tax) and Supplementary Duty exemption on import and local purchase of raw materials are proposed till December 31, 2025;
f) In order to develop heavy industry in the country, VAT exemption at local manufacturing stage and VAT (including Advance Tax) and Supplementary Duty exemption on import and local purchase of raw materials and parts to manufacture motor car and motor vehicle up to 2500 CC are proposed till 30 June, 2030.However, if conditions of complete manufacturer are not met, 5 percent VAT at the local manufacturing stage will be applicable from 2026;
g) 5 percent VAT will be applicable at the manufacturing stage of three-wheeler and VAT (including Advance Tax) and Supplementary Duty shall be exempted on import of raw materials and parts thereof till June 30, 2025;
h) VAT (excluding Advance Tax) and Supplementary Duty on import of raw materials and parts to manufacture maintenance free and sealed maintenance free battery, using idling stop / start-stop technology, shall be exempted till 30 June, 2025.
266. To make the business environment friendlier and to reduce tax-burden at the local manufacturing stage, I present some more proposals:
a) I propose to fix VAT at the trading stage for M.S. products at Tk. 200 per Metric Ton instead of Tk. 500 per Metric Ton;
b) I propose exemption of Advance Tax on importation of Terephthalic Acid and Ethylene Glycol, which are used as raw materials for manufacturing Textile Grade Pet Chips, by registered manufacturers;
c) I propose to withdraw existing 5 percent supplementary duty on all types of polythene bags, plastic bags (including oven plastic bags) and wrapping materials made of polyethylene;
d) I propose to reduce the VAT rate (for some sectors) from 5 to1.5 percent at the wholesale trading stage;
e) I propose to give VAT exemption at trading stage to those animal feeds which are already enjoying exemption at import and manufacturing stage;
f) I propose to reduce the existing VAT rate on manufacturing hand towels / paper towels / clinical bed sheets from 15 to 5 percent;
g) I propose 5 percent VAT on both AC and Non-AC restaurants (except restaurants in hotels with 3 or more star, and restaurants, where alcohol is served) instead of 10 percent VAT on AC restaurant and 5 percent VAT on non-AC restaurant;
h) I propose to give Advance Tax exemption on import of machinery and equipment by registered poultry farms;
i) I propose to exempt Advance Tax on import of Castor Oil Polyglycol 36-37, Solvesso150 (APAC), Genapol100, Propoconazole Technical 220 KG 22D, Dodecylbzols Acid Branched CA-S Sol, which are used to manufacture pesticides, fungicides used for agricultural purpose by the registered manufacturers;
j) I propose to give Advance Tax exemption to import of aircraft by registered organizations;
k) I propose to give VAT exemption on revenue sharing to BTRC against 4G mobile services provided by mobile operators;
l) I propose to allow VAT exemption on revenue sharing to BTRC against NTTN service;
m) In order to make readymade garment export more cost effective, I propose to give VAT exemption on supply of goods under sub-contract between the manufacturing units when both are enjoying bonded facility.
267. In order to reduce dependence on foreign products, save foreign currency and help develop domestic industries, I propose VAT exemption and reduction in the following areas:
a) VAT exemption at manufacturing stage to produce Textile Grade Pet Chips;
b) Exemption of VAT on first stage purchase of LPG in bulk, which will be sold in bulk later;
c) Reduce VAT on yarn made from man-made fiber and other fibers from Tk. 6 (six) per kg to Tk. 3 (three) per kg;
d) VAT exemption at the trading stage for sugar and puffed rice;
e) VAT exemption at the trading stage for tubular metal needles and needles for suture;
f) VAT exemption at manufacturing stage for Autoclaved Aerated Concrete Block;
g) VAT exemption at manufacturing stage for mobile phone batteries, chargers and interactive displays for the development of information technology and computer industry;
h) VAT exemption at manufacturing and trading stage for Power Tiller;
i) VAT exemption on manufacturing and trading for poultry, dairy and fish feed products as described in Customs S.R.O. No. 128-Ain / 2020/79 / Customs, Date: 03 June, 2020;
j) VAT exemption on supply of locally procured scrap in the foundry industry;
k) VAT exemption on Braille printing materials for visually impaired people as a social welfare service.
268. Excise duty on bank accounts and air tickets are collected as per provisions of the Excises and Salt Act, 1944 (Act No. 1 of 1944). At present excise duty of Tk. 40,000 is collected on bank accounts where the balance, at any time of the year, was above tk. 5 (five) crore. I propose to increase excise duty to Tk. 50,000/- from Tk. 40,000/- for bank accounts, where balance at any time of the year is above Tk. 5 (five) crore.
269. In order to reduce the use of tobacco products and increase revenue, I present the following proposal on tobacco and tobacco products:
a) I propose to fix the price of lower slab 10-stick/pack cigarette at Tk. 40 and higher and supplementary duty at 57 percent. Apart from this, I propose to fix the price of medium slab 10-stick/pack cigarette at Tk. 65 and higher, high slab at Tk. 111 and higher, and premium slab at Tk. 142 and higher. The rate of supplementary duty for these three slabs is proposed to be 65 percent;
b) I propose to continue existing price of non-filtered 25-stick/pack bidi at Tk. 18, 12-stick/pack bidi at Tk. 9 and 8-stick/pack bidi at Tk. 6 and 30 percent supplementary duty for all. I also propose to continue existing price of filtered 20-stick/pack bidi at Tk. 19, 10-stick/pack bidi Tk. 10 and supplementary duty 40 percent for all;
c) I propose to continue existing price of 10 gm Jarda at Tk. 40 and 55 percent supplementary duty. I propose to continue existing price of 10 gm Gul at Tk. 20 and 55 percent supplementary duty.
270. The VAT Online Project has already been successfully completed for the implementation of the new Value Added Tax Act on the digital platform from FY2019-20. VAT registration and return filing can now be done online from any place. Already hundred percent VAT registrations have been done online and about 73 percent VAT returns have been submitted online. At present, arrangements have been made for online payment of VAT through E-payment and A-challan. This has increased transparency and accountability of all activities of respected VAT payers, VAT collectors and VAT officials. Apart from this, Electronic Fiscal Device (EFD) / Sales Data Controller (SDC) have been set up from FY2020-21 to increase revenue collection from various retail and wholesale businesses. About 4,595 EFD / SDC machines have already been installed in various sectors. A total of 10,000 EFD / SDC machines are planned to be installed in various business establishments by June 2023. Alongside current government initiative to install more EFDs/SDCs, procurement process is underway for hiring outsourced services to collect revenue through installation of EFD / SDC. Efforts are being made to increase the scope and coverage of VAT, which will consequently increase tax to GDP ratio. I firmly believe that steps, which are already undertaken, will lead to the desired success in VAT collection by 2026.
271. The budget for FY2022-2023 has been prepared with the twin motive ofreinvigorating the economy, which has been hard hit by the global pandemic and recent uncertainties in international trade, and bringing dynamism in the economy and in revenue growth. Various steps have been taken to prepare for our LDC graduation, to create new employment, accelerate GDP growth, develop local industries, increase investment through protection and trade facilitation, pay special attention to export oriented and heavy industry development and continue ‘Made in Bangladesh’ slogan. Careful consideration has been given to the proposals received from various organizations, business associations and stakeholders to safeguard the interests of domestic industry, trade and consumers. I am now presenting the proposals regarding import duties and taxes in the budget of FY2022-2023 to this august House.
272. The following factors have been considered in formulating the proposals regarding import duty, regulatory duty, supplementary duty and value added tax at the import stage:
273. I propose to continue the existing 6 (six) slabs of Customs Duty rates (0%, 1%, 5%, 10%, 15% and 25%), 3% Regulatory duty on the products that have the highest import duty and 12 (twelve) slabs of supplementary duty rates (10%, 20%, 30%, 45%, 60%, 100%, 150%, 200%, 250%, 300%, 350% and 500%) in the next fiscal year. In addition, tariff rates on essential commodities, fertilizers, seeds, life-saving medicines and some other industrial raw materials are proposed to remain unchanged.
274. Considering the above objectives, I present to this august House the sector-wise details of the proposals with your kind permission:
275. Agriculture is our priority sector. It has been proposed not to change the structure of the existing tariff rates on imports of major agricultural inputs, especially on fertilizer, seed, pesticide, essential food items and on imports of other daily necessities.
276. Creation of two new H.S. Codes for fortified and non-fortified Basmati rice, where total tax incidence will remain unchanged, has been proposed.
277. ‘Wheat gluten’ is used in food preparation of domestic poultry industry. At present there is 25% import duty on that product. It has been proposed to reduce the import duty on that product from 25 percent to 15 percent in order to reduce the cost of production in the livestock industry and ensure the supply of protein to the consumers at low price.
278. ‘Sugarcane molasses’ is a major ingredient for the production of cattle feed. I am proposing to reduce the import duty on these products from 15 percent to 10 percent to reduce the production cost of cattle feed.
279. In order to ensure sustainable development of the fisheries, poultry and dairy sector, it has been proposed to continue the zero tariff rates and other concessions given in the past for the import of food items and miscellaneous items of this sector. In addition, it has been proposed to expand the concession facility for 03 new materials (test kits for use in poultry, molasses feed grade and cane molasses feed grade) used in livestock sector.
280. It is proposed to expand the concessional facility by including two new agricultural machinery (combined Harvester-Threshers and other threshing machinery) in the existing SRO for that sector.
281. Butter and cheese are two similar products. Although there is 20 percent supplementary duty on butter, there is no supplementary duty on cheese. Therefore, it has been proposed to impose 20 percent supplementary duty on cheese at the import stage.
282. Cold storage freezers and chillers used in agriculture and food industry are subject to high import duty. As a result, the cost of preserving domestic agricultural products is high. I am proposing to provide concessional facilities for import of cold storage freezers used for agro-based food storage. At the same time, I am proposing to decrease the total tax incidence of cold storage chillers to 37 percent.
283. It is proposed to expand the existing concessional facilities for certain raw materials used in production of pesticides, which are used in agriculture.
284. Incentives for various sub-sectors of the agricultural sector have been highlighted (table-1 in annexure B).
B) Health sector
285. To combat the outbreak of coronavirus (COVID-19), all duties and taxesapplicable on the import of coronavirus testing kits, special types of masks and hand sanitizers, raw materials required for the production of masks and PPE, raw materials required for the preparation of RT-PCR kits for detection of coronavirus have been waived through a special notification. Under the visionary leadership and guidance of the Hon’ble Prime Minister, the corona situation in the country has improved a lot. Therefore, I am proposing to abolish the existing concessional facility at import stage offered on these products after June 30, 2022.
286. In order to consolidate the achievements of the health sector, it has been proposed to continue the existing concessional facilities for import of raw materials required for the production of medicines and medical supplies.
287. I am proposing to reduce the applicable duty on Air-Zinc Battery used in the special device for hearing impaired people.
288. It is proposed to abolish all existing tariffs on the importation of specialized wheelchairs for the physically challenged people. (table-2 in annexure B).
C) Industry sector
289. The importance of the industrial sector is immense in creating employment and attracting domestic and foreign investment. In addition, proper preparation in the industrial sector is required for successfully facing the post-graduation challenges. In order to increase investment in the industrial sector, to maximize the productive capacity of the existing industry through proper protection and to adopt a multi-faceted expansion strategy of export-oriented industries, I propose the following sector-wise proposals to increase/ decrease duty taxes: (Annexure B, Table- 3)
1) Small and Medium Industries
290. In order to protect small and medium enterprises, I am proposing to increase the applicable duty on the import of some finished products made by those industries.
291. In case of import of capital machinery by small and medium industries, it has been proposed to continue the facility to import at the rate of 1 percent, irrespective of commercial or industrial entity.
292. In order to protect the paper cup manufacturing industry, it has been proposed to increase the supplementary duty on the import of some finished products.
2) Export oriented industries
293. In order to develop the cashew nut processing industry in the country and to create new export sector, it has been proposed to reduce the tariff on import of raw cashew nuts.
3) Miscellaneous steel industry
294. In order to encourage the production of import substitute products in the Electrode Manufacturing and Wire Drawing Industry, I am proposing to reduce import duty on the import of Bars & Rods of alloy steel used as a raw material to 5 percent.
295. Since different types of wires are almost homogeneous, it is difficult during assessment to distinguish between them. Therefore, to bring parity, I am proposing to increase the existing import duty on the import of both the products from 5 percent to 10 percent.
296. There are 15 percent and 25 percent import duties on different types of pipes. As it is a homogeneous product, it is time consuming and difficult to ascertain the exact type of pipe at the time of assessment. Therefore, for the interest of revenue protection, it has been proposed to fix 25 percent import duty on such products.
297. Galvanized Iron (GI) fittings manufacturing industry has now developed in the country. Therefore, it has been proposed to impose 20 percent supplementary duty on imported GI fittings to ensure protection of domestic industry.
298. It has been proposed to impose 20 percent supplementary duty on Screws / Nuts / Bolts etc. for uniformity of total tax incidence for different types of threaded articles as well as protection of local industry.
299. At present some local industries are producing high-quality stainless-steel products. In order to encourage the establishment of local backward linkage heavy industry and to ensure market competitiveness of the product, I am proposing to reduce the existing import duty from 10 percent to 5 percent on Hot-Rolled Stainless-Steel sheet as raw material.
300. Wires, rods, tubes, plates, electrodes and similar products are subject to different import duty rates. In order to harmonize the duty rates on such products, it has been proposed to increase the existing import duty on such products from 10 percent to 15 percent.
4) Motorcycle manufacturing industry
301. In our country, factories have been set up to manufacture motorcycles with engine capacity of more than 250 cc. There is currently no supplementary duty on the import of such products. On the other hand, in case of import of motorcycles up to 250 cc, there is a supplementary duty of 60 percent for four stroke and 250 percent for two stroke motorcycles. Therefore, I am proposing to impose 100 percent supplementary duty in case of import of four stroke and 250 percent supplementary duty in case of import of two stroke motorcycles with engine capacity above 250 cc.
5) Rubber industry
302. Conveyor belts or belting is a rubber product with 1 percent import duty. As a result, local industries are facing uneven competition. Therefore, I am proposing to increase the import duty on all types of conveyor belts or belting from 1 percent to 5 percent.
6) Other industries
303. ‘Other made-up clothing accessories’ have a 45 percent supplementary duty on all products except other accessories. Therefore, in the interest of expediting assessment and revenue protection, I am proposing to impose 45 percent supplementary duty on all products including ‘Other made-up clothing accessories’.
304. 20 percent supplementary duty is imposed on import of Aluminum Foil (Backed by Paper / Paper Board). Aluminum Foil (backed by others) is a similar product. No supplementary duty is imposed on that product. Therefore, in the interest of proper revenue collection, it has been proposed to impose 20 percent supplementary duty on import of Aluminum Foil (backed by others) products.
305. There is 10 percent import duty on Electric Motor up to 750 watts. Such motors are now being produced in the country. I am proposing to increase the import duty from 10 percent to 15 percent for electric motor up to 750 watts to protect the local industry.
306. At present 0 percent import duty is applicable on solar panel imports. In view of the application of the domestic solar sector, I am proposing to increase the existing import duty on imported solar panels from 0 percent to 1 percent.
307. At present factories that produce optical fiber cable have been set up in the country. There is 15 percent import duty on the import of the product. I am proposing to impose 10 percent supplementary duty on the import of optical fiber cable for protection of the domestic industry.
308. The import duty of Complete Kilowatt Hour Meter is 25 percent. On the other hand, import duty on the parts of the product is 10 percent. For the interest of revenue protection, I am proposing to increase the import duty on parts of Kilowatt Hour Meter from 10 percent to 15 percent.
309. Most of the ‘Seats’ are subject to supplementary duty. On the other hand, there is no supplementary duty on import of parts of seats. Therefore, in the interest of protection of government revenue, I am proposing to impose 10 percent supplementary duty on the import of parts of seats.
310. The total tax incidence on raw roasted Coffee is 89.32 percent but the total tax incidence of processed and ready to consume Coffee is 58.60 percent. In the interest of revenue protection, I am proposing to impose 20 percent supplementary duty on Processed and Ready to Consume Coffee at the import stage.
311. I am proposing to increase the import duty on Cellular Phone Battery Charger from 15 percent to 25 percent in order to further develop the domestic cellular phone manufacturing industry.
312. ‘Gas Lighter’ is currently being produced in the country. Therefore, in order to protect the domestic industry, I am proposing to impose 10 percent supplementary duty on the import of such products. Similarly, I am proposing to increase the import duty on parts of Lighter from 10 percent to 25 percent.
313. Some local industries have been given the opportunity to import finished printing ink at a concessionary rate of 10 percent. As a result, local ink manufacturers are facing losses. Therefore, to protect the local industry, I am proposing to increase the concessional rate of the said product to 15 percent instead of 10 percent.
314. The existing import duty on winding wire of cable industry is 25 percent. There is a 5 percent import duty on products where such wire is used as raw material. As winding wire is used in various industries, currently there is 5 percent concessionary rate of import duty on it. As a result, local industries are facing unequal competition. Therefore, to protect the domestic industry, I am proposing to increase the concessional import duty on winding wire of copper from 5 percent to 10 percent.
315. At the import stage, 5 percent import duty exists for both industrial and commercial importers for Crude Tar. In order to develop the manufacturing industry, I am proposing to impose 5 percent import duty on crude tar imports for manufacturing companies and 15 percent in other cases.
316. Import duty on photographic plates, film, paper etc. is 10 percent and import duty on printing plates is 1 percent. Both products are almost identical and used for the same purpose. The difference in duty rates creates scope for revenue evasion. Therefore, I am proposing to increase the import duty on printing plates from 1 percent to 10 percent to make total tax incidence uniform.
317. The import duty of up to 20 liters capacity water distillation equipment is 10 percent. Domestic Type water purifying apparatus / machine is a similar product. As it is functionally homogeneous, there are some complications at the field level during assessment. Therefore, I am proposing to increase the import duty on domestic type water purifying apparatus / machine from 1 percent to 10 percent, which will make the total tax incidence equal.
318. Import duty on Cash register is 0 percent. On the other hand, import duty on Ticket Calculating Machine is 10 percent. Since the machines are almost similar, the tariff rate needs to be consistent. Therefore, in case of cash register, I am proposing to impose the import duty at 10 percent.
319. At present the country is importing luxurious birds, which attracts 5 percent import duty. Since birds are luxurious, I am proposing to increase the import duty from 5 percent to 25 percent on those.
320. Import duty on Calcium Chloride Based Container Desiccant products is 10 percent. On the other hand, import duty on other desiccants is 25 percent. Therefore, it is reasonable to rationalize tariff rates for all types of desiccants. So, I am proposing to impose the import duty on all types of Desiccants at the rate of 10 percent.
321. Due to the increasing demand for lifts, local industrial entrepreneurs have started to invest in the lift manufacturing industry. However, 1 percent import duty is applicable on the import of complete lift and skip hoists. In the interest of development of domestic industry and in order to discourage imports, I am proposing to withdraw lift and skip hoists from capital machinery SRO and impose 5 percent import duty at the import stage with a total tax incidence of 31 percent.
322. High-capacity tanks or reservoirs (silos) are used in food manufacturing industries. There is a 25 percent import duty on the product now. I am proposing to impose 5 percent import duty on the import of tanks or reservoirs (silos) with a capacity of more than 300 liters for food manufacturing industries.
323. In Bangladesh Customs Tariff (First Schedule) six HS lines have crossed bound tariff rate, which is set by the World Trade Organization (WTO). It has been proposed to adjust the tariff rates for these products so that they are within the permissible range.
324. It is proposed to make some amendments in the existing SROs for production of motorcycles, cellular phones, elevators, textile industry and LP gas cylinders. I am also proposing to issue new SROs for the expansion of the local air-conditioner, refrigerator & freezer manufacturing and pre-fabricated building structure industry.
325. It has been proposed to rationalize the tax incidence of the raw materials of various industries such as carbon dioxide, methanol, purified isophthalic acid (IPA), thermal coating slurry, ball clay, China clay, rotor washer, 14 mm to 30 mm diameter wire rods, and ball points, which is used as raw material in making ball pens.
326. Many Sewage Treatment Plants (STPs) are being set up in Bangladesh with the aim of making the country’s environment sustainable and pollution free. Its demand is increasing day by day. Hence, I am proposing to reduce import duty on Sewage Treatment Plant (STP) from existing 25 percent to 5 percent.
D) ICT sector
327. For the protection of domestic computer / laptop and ICT product manufacturers, I am proposing to expand the concession facility for import of raw materials for computer accessories and ICT industry.
328. To promote “Made in Bangladesh” branding worldwide and to protect the investment of domestic manufacturing industries, I am proposing to withdraw the concessions on import of printers and toner cartridges. This will help local manufacturers to reach the target of exporting digital devices.
329. Laptop computer imports are subject to VAT exemption. As a result, domestic computer manufacturers are facing uneven competition. So, I am proposing to impose 15 percent VAT on laptop computer imports. As a result, the total tax incidence of the product will be 31 percent.
330. I am proposing to include a few more raw materials which are used in the production of computer and computer equipment in the existing SRO for Hi-Tech Park.
331. The various incentives for the ICT sector and high-tech parks have been highlighted in the attached Annexure. (Annexure-B, Table-4)
332. In order to save foreign currency, discourage and control import of luxury goods and to rebuild the post-COVID economy, it is recommended to increase the total tax incidence by imposing supplementary duty on high-end luxury motor vehicles and jeeps along with chandeliers and light fittings at the import stage.
Amendment of the Customs Act, 1969
333. In order to facilitate trade, ensure national security and to establish effective customs regulation, some necessary amendments were made in the existing Customs Act, 1969. I am proposing to make necessary amendments in the existing Customs Act, 1969 to include the issue of exchange of information by Customs authority. Furthermore, I am proposing to rationalize the amount of penalty for common Customs offenses in the present context and to carry out the operation of bonded warehouses in an automated manner in the Customs Act.
Amendments of First schedule of the Customs Act
334. I propose to properly examine, review and correct the existing HS codes, descriptions, import duties, supplementary duties, value-added tax, etc., in order to eliminate the complexity of naming and classification of goods for the purpose of facilitating international trade and creation and rationalization of separate HS codes where necessary. (Annexure-B, Table-5).