Skills development institutes may get 10-year tax break
To get this facility, an institute must register with BIDA and the minimum investment must be Tk5 crore
The government is likely to offer all kinds of training institutes full tax exemptions for 10 years to encourage private investors to establish such institutes for building skilled manpower in the country.
The initiative applicable to about 30 types of skill development institutions will contribute to achieving the Sustainable Development Goals (SDGs) by 2030, according to skill development experts.
Finance Minister AHM Mustafa Kamal is scheduled to table the proposal in Parliament during the budget session for the fiscal year 2021-22 on Thursday (today).
Professor SelimRaihan, executive director of South Asian Network on Economic Modeling, told The Business Standard they had been demanding full tax exemptions for training as training institutes can provide training and other related education smoothly and at low costs.
"I congratulate the government's initiative to offer full tax exemptions for training institutes. Investors will be encouraged to establish more institutes across the country, and it will help build more skilled manpower," he said.
The training institutes can get full tax exemptions if they introduce training in agriculture, fisheries, science and technology, automobile, preservation of aircraft, food, footwear, glass mining, mechanical, shipbuilding, leather, refrigeration, ceramics, garment design and patternmaking, pharmacy, nursing, integrated medical, radiology and imaging, ultrasound, dental, animal health and production services, clothing and garment finishing, and poultry farming.
DrKazi Iqbal, research fellow of Bangladesh Institute of Development Studies, said the National Skills Development Policy recommends providing full tax exemptions for training institutes to accelerate their activities in order to build a skilled generation for the future as Bangladesh lacks skilled manpower.
"It is an excellent initiative. I believe financiers of institutes will be encouraged to introduce more training courses for people," he said.
According to a Brac study, young people in Bangladesh face a precarious future despite living in one of the world's fastest-growing economies. A third of Bangladesh's population is 10-24 years old and 2.2 million young people enter the workforce every year.
Three out of every four business leaders report that skilled workers are scarce while approximately 10 million young people are currently unemployed or underemployed.
Conditions for getting full tax exemptions
To get full tax exemptions, an institute must register under the Companies Act 1994. It must register with Bangladesh Investment Development Authority and the minimum investment must be Tk5 crore.
It must take permission from Bangladesh Technical Education Board or the health directorate or Bangladesh Nursing and Midwifery Council, and follow the National Skills Development Policy.
The institute must have permanent teachers, trainers, necessary infrastructure, and active labs or workshops as per the National Skills Development Policy.
It will get full tax exemptions for earnings from training and education only.