Extend bonded warehouse benefit to non-garment firms: BUILD

Non-garment exporters should be allowed to import raw materials duty-free under the bonded warehouse privilege as it would help diversify the country's export basket, the Business Initiative Leading Development (BUILD) said yesterday.

The public-private dialogue platform also suggested the government give a common bonded warehouse benefit for firms that cannot export all of their products.

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"This will give a huge boost to export diversification as small and medium enterprises that cannot export all of their goods will be able to avail the opportunity to export by using raw materials imported at zero duty," said Ferdaus Ara Begum, chief executive officer of the BUILD.

The organisation placed the proposal to the National Board of Revenue (NBR), requesting the revenue authority to include the recommendations in its tax measures for the fiscal year of 2022-23, at a discussion organised by the NBR at its office.

She went on to say that the garment industry flourished and become the biggest export earning sector for Bangladesh because of the policy support and incentives like bonded warehouse facilities.

Similar benefits can be extended to other sectors.

Particularly, the bonded warehouse facility should be extended to promising sectors such as leather, leather goods, footwear, light engineering, plastics and agro-processing, Ferdaus Ara added.

The BUILD CEO said the present entitlement policy for importing raw materials under the bonded warehouse benefit needs to be revised as it becomes complex due to changes from time to time.

A new policy on entitlement should be formulated for all export-oriented sectors, she said, adding the current policy was introduced in 2008.

The bonded warehouse privilege provides entrepreneurs with the opportunity to import raw materials duty-free on the condition that the items manufactured by them would not be sold in the domestic market.

The BUILD also proposed incorporating a provision in the tax law for refunds or adjustments to the tax deducted at source with total payable taxes.

At the event, the Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza), Bangladesh Export Processing Zones Authority (Bepza) and Bangladesh Hi-Tech Park Authority (BHTPA) proposed a further cut in corporate tax rates.

On the issue, Abu Hena Md Rahmatul Muneem, chairman of the NBR, said he did not expect a proposal for corporate tax cuts from agencies such as the Bida, the Beza, the Bepza and the BHTPA.

He said the NBR will, however, consider some other proposals of the investment promotion agencies.

"We have reduced the corporate tax rate a lot already," he said.