The government has offered a lucrative incentive package for investors and developers of the country’s economic zones. The investors will get a 10-year tax holiday while 12-year tax holiday was approved for the developers. National Board of Revenue has published two separate statutory regulatory orders on July 12 offering tax benefits to developers and investors. The investors will get complete tax exemption on their income from the economic zones for first three years and will enjoy the gradually reduced rates for next seven years. As per the SRO, they will get 80% exemption in fourth year, 70% in fifth year, 60% in sixth year, 50% in seventh year, 40% in eighth year, 30% in ninth year and 20% in tenth year of their commercial operation. Investors in high-tech parks will also get the same benefits. After elapse of tax holiday, investors will get exemption of dividend tax. The developers of economic zones and high-tech parks will also get complete tax exemption on income derived from their commercial operation of first 10 years, while the rate will be exempted by 70% for the 11th and 30% for the 12th year. To avail the benefit, both investors and developers, however, have to receive Taxpayers Identification Number and maintain book of accounts and file income tax returns regularly. On July 1, NBR also allowed duty-free import of capital machinery, construction material and development equipment for the economic zone investors. Developers and investors of the economic zones and high-tech parks will be completely exempted from customs, regulatory and supplementary duties and VAT on imports of materials unavailable in the country, according to earlier gazettes. Bangladesh Economic Zone Authority (BEZA) officials said its governing body, headed by Prime Minister Sheikh Hasina, on February 18 finalised a set of investment stimulus. The benefits for economic zone investors include full repatriation of capital and dividend, 50% exemption of stamp duty and registration fee, duty exemption on exports, exemption of double taxation subjected to Double Taxation Agreement, tax exemption on royalties and technical fees, tax exemption on capital gains from transfer of shares. The investors will get resident visa for investment of $75,000 or more while citizenship will be given for investment of $5,00,000 or above. The developers will also get a number of benefits including exemption from custom and excise duties, dividend tax, tax on income from service charges, VAT on local purchase excluding petroleum products. In his budget speech, Finance Minister AMA Muhith said: “Special incentive packages are on the cards to encourage investment in developing Bangladesh’s economic zones and high-tech parks.” The government plans to establish 100 economic zones across the country over the next 15 years, which are expected to increase export earnings by $40bn and generate about 10m additional jobs. BEZA Executive Chairman Paban Chowdhury said more incentive packages would be available for both foreign and domestic investments. “A total of 37 proposals were approved for economic zones across the country. Now investors are sending proposals for establishment of economic zone near Dhaka, and we are analysing the proposals,” he said.
