NBR chief asks why even wooden chairs should be imported

The National Board of Revenue (NBR) wants to reduce tax benefits on the import of goods that are also produced locally in a move to extend support for the local industry.

"Due to the tax benefits, there is still a reliance on imports for products that can be produced locally. We also need to look at local industries," NBR Chairman Abu Hena Md Rahmatul Muneem said at a pre-budget meeting at the revenue board headquarters in the capital on Sunday.

"We will review the facilities and squeeze them. We will not provide facilities for importing things like office stationery and chairs. Why quality materials for pre-fabricated buildings should not be available in the country and even wooden chairs should be imported from abroad," said the NBR chairman.

The facilities given to foreign investors [in export processing zones-EPZs] will be squeezed too, he said in response to demands for more facilities for foreign investors. 

It has also come out in his speech that this process has already begun. "We have now fixed the number of cars (for EPZs) and the cylinder capacity (CC)," he added.

"When the law was enacted (for EPZs), many benefits were given blindly. Because then there was no local industry. Now the local industry has grown. We facilitated foreign investors. But there is no end to their demand," he said.

However, the NBR chairman said that they will work to make the business process easy and consider giving reasonable tax benefits.

The Bangladesh Export Processing Zone Authority (Bepza), the Bangladesh Economic Zone Authority (Beza), and the Bangladesh Investment Development Authority (Bida) proposed various facilities during the meeting to increase foreign investments.

The NBR chairman urged the government agencies to look at the macroeconomic perspective.

Currently, investors get duty-free benefits for importing several goods if companies have investments in the EPZs. Under an order from the NBR, factories here can import spare parts at duty-free facilities. This facility also covers the import of vehicles for necessary transportation. There are separate laws for the eight EPZs under Bepza, where workers are not allowed to form trade unions directly.

According to Bepza, there are 456 factories running in the EPZs, of which 310 are fully foreign or joint venture investments and the rest, 146, are from local investors.

Shams Mahmud, an EPZ investor, told The Business Standard "There is a misconception about getting additional benefits in EPZs. Here, the cost of doing business is rather high. We invest here, mainly with security in mind."

Abu Hena Md Rahmatul Muneem said that the facility of bonded warehouses will be given to more sectors.

"It will be possible to expand it once the ongoing bond automation programme is completed. If this facility is given before automation, there is an opportunity for misuse," he said.

Regarding the separation between tax policy and tax implementation, he said, "I don't understand what it means. Implementation is not possible without knowledge of law. So what will the outsiders, who don't have technical knowledge about it, do? I will study it."

Participating in the discussion, Business Initiative Leading Development (BUILD) Chief Executive Officer Ferdaus Ara pointed out that tax officials have the discretionary power to create fear among taxpayers. At this time, she highlighted the issue of HS Code harassment at the import level.

Senior officials of the NBR were present during the meeting.