The reduced rate of tax at source on export of all products including the readymade garment items will be applicable only for the current fiscal year, said the National Board of Revenue. The government on June 29 through the finance bill for the FY 2015-2016 set the tax on export proceeds at 0.60 per cent reducing from the 0.80 per cent placed in the proposed budget. The NBR on July 2 issued a statutory regulatory order saying that the reduction in the rate of tax at source on export of RMG and non-RMG items will remain in effect up to June 30, 2016. Officials of the revenue board said the government set the tenure of export tax benefit at the reduced rate for exporters as the tax would be revised in the next FY 2016-2017. Usually, the rate of any tax remains applicable only for the post-budget fiscal year unless the rate is included in the Income Tax Ordinance-1984. The rate of export tax is set under law. The effective date has been set this time so that the rate can be reviewed in the next fiscal year. The government was forced to reduce the tax under severe pressure from the exporters particularly those from the apparel sector but it considers that the tax rate should be increased further, NBR officials said. Generally, the government thinks that the exporters should pay tax on export earnings at higher rate as the sector has been enjoying tax benefit from the very beginning. The revenue board initially sought an increase in export tax to 1 per cent from 0.30 per cent and 0.60 per cent paid by the RMG exporters and the non-RMG exporters respectively in the previous fiscal year. The rates were reduced from 0.80 per cent in the FY 2013-2014. The NBR will get at least Tk 800 crore less because of the reduction in the export tax for all items.
