Finance Minister AMA Muhith presented the proposed finance bill 2017 (national budget for 2016-17) in Parliament on June 02 last. It was the largest-ever annual budget in the history of Bangladesh. The minister did not propose any changes for individual income tax rates, though people expected some reduction or increase. Zero customs duty was retained for import of some essential items like pulse, gram, wheat, onion, garlic, turmeric, zinger, pepper, coriander, flour, life saving drugs, etc. There is a strong possibility that the facility may be used for money laundering through over-invoicing. One per cent customs duty could be imposed to prevent over invoicing although it could result in slight price rise of the above commodities. 35 per cent corporate tax has been proposed for all industries and commercial ventures. But corporate tax for export-oriented garment and knit industries has been reduced by 10 per cent and proposed as 20 per cent. To me, it does not appear rational. RMG industries started its journey in early 80’s of the last century and developed very fast during 90’s with financial and administrative support of the government. Bangladesh RMG now occupies the second position in the world in terms of export. Indeed, every year the export volume as well as proceeds has been increasing. Garment and knit industries in Bangladesh have reached a mature stage. It is high time that the industry contributes more to the government’s nation-building efforts. The corporate tax for export-oriented garment and knit industries should be kept at 35 per cent as it was in the outgoing financial year.
