‘Common bonded warehouse will inspire SMEs to be exporters’

Business Initiative Leading Development (BUILD), a public-private dialogue (PPD) platform, has urged the National Board of Revenue (NBR) to establish a common or central bonded warehouse in FY24 for plastic, light engineering and shoe sectors aimed at encouraging SMEs to become exporters gradually.

“Currently, small and medium-sized enterprises (SMEs) cannot get facility of bonded warehouse. So, NBR can bring the partial exporters under the bonded policy to give such facilities,” BUILD said in a pre-budget discussion organised by the revenue board on Sunday at its office in the capital’s Agargaon area.

“It will encourage the SMEs like finished leather, leather goods and shoes, plastic, light engineering sectors to be exporters gradually in the near future.”

“Besides, the duty-free access to all for importing raw materials to process exports is equally required with inclusion of the partial exporters in the relevant provision,” it adds.

The platform suggested withdrawal of advance income tax from import of those which are using industrial Import Registration Certificate (IRC). “BUILD wants termination of term “turnover” tax as there is no relation with value-added tax or supplementary duty.”

“Instead, the revenue board will have to replace turnover tax with “SME VAT” in the VAT and Supplementary Act 2012 while it is required to insert provision of VAT credit and reduced VAT rate up to Tk3 crore transaction,” it says.

Terming the income tax management on source tax ‘anti-revenue biased’, BUILD said that it motivates possible taxpayers to be kept out of the tax net. It suggested that NBR should incorporate the refund provision in the law as refund is actually now nearly 20 per cent while non-refundable source tax increases actual tax.

BUILD also urged the NBR to frame audit guidelines for the taxpayers so that they can understand why they are considered for tax audit and separation of tax policy authority and tax collection authority.

Build claims, “The field level assistant commissioners of taxes and inspectors of taxes sometimes are misusing their special powers.”

It has also urged the NBR to decide on adjustment of phase-based duties through discussion with the private sector people, taking competitiveness of the local industries into consideration.

While presiding over the discussion, NBR Chairman Abu Hena Md Rahmatul Muneem said, “ .”

The NBR boss said, “An environment has been created nowadays that the tax policy authority and the tax collection authority should be separated. But I do not know what does mean it.”