The National Board of Revenue (NBR) has reduced taxes on mild steel (MS) products, cement sheet, bidi and some other raw materials for the steel sector, report agencies.
Officials said the revenue board has slashed taxes at the request of industry insiders to make the prices of these products affordable in the local market.
However, tax on bidi has been cut because of pressure from the lawmakers.
The NBR cut specific VAT at trading stage of MS products to Tk 500 per tonne from previous Tk 1,000 per tonne.
It also reduced VAT on production of cement sheets to 5.0 per cent and credit rating agency service to 7.5 per cent from previous 15 per cent.
Supplementary Duty (SD) on bidi has been cut by 5.0 per cent to 30 per cent from 35 per cent.
Sources said it is a 'contradictory' move against the government's vision to build a tobacco-free country by 2040.
The VAT wing of NBR issued three separate Statutory Regulatory Orders (SROs) on Sunday, making reduced tax rates effective.
Considering the negative impacts on the steel and construction industry, the board has reduced specific tax on MS products and some raw materials for the steel sector.
In the proposed budget, the government had fixed specific tax on MS products at Tk 2,000 per tonne. Later in the Finance Act-2019 passed on June 30, the government cut it to Tk 1,000 per tonne.
Officials said the NBR reduced VAT once again to Tk 500 at the request of industry insiders to keep the prices of these products low in the local market. Reduced tax benefit has been offered for sales of MS rod, billet, ingot and other products in the domestic market.
Steelmakers have long been demanding cut in VAT on steel products. The VAT wing also reduced taxes on production of ferromanganese, ferro-silico-manganese alloy and ferrosilicon alloy, and raw materials for the steel industry, It has imposed specific tax on those materials, instead of 5.0 per cent VAT, to reduce tax incidence on those raw materials.
As per the SRO, specific VAT will be payable at Tk 1,000 per tonne of ferromanganese and ferro-silico-manganese alloy and Tk 1,200 per tonne of ferrosilicon alloy.
SD on bidi, produced manually, has been reduced to 30 per cent from previous 35 per cent. Officials said lobbying by a group of parliament members and pressure from bidi manufacturers has forced them to cut SD on health hazardous product.
During the budget preparation stage and after the budget, more than 50 parliamentarians sent demi-official letters to the revenue board for not increasing tax on bidi.
In the budget for the current fiscal year, the government had increased SD on bidi to 35 per cent from 30 per cent.