The National Board of Revenue (NBR) has reduced the turnover tax on the carbonated beverages industry to 3 per cent, which was set at 5 per cent for the current fiscal year.
The decision will come into effect immediately, according to a Statutory Regulatory Order (SRO) by the NBR on Wednesday.
The immediate effect, meaning up to August 28 this year, beverage companies are liable to pay 5 per cent turnover tax or minimum tax on revenue, and then from onward they will pay 3 per cent on such tax.
Until August 28, beverage companies are obligated to pay 5 per cent or a minimum tax based on their revenue and then from onward they will pay 3 per cent on such tax.
Turnover tax rate was 0.60 per cent in the industry and the government imposed 5 per cent turnover tax on June 22.
Insiders say due to such policy mismatch, some companies, mostly small ones, will face difficulties as increasing costs for those which filed returns in the meantime and compete with the giant companies.
Suppose, a company, with year ended on December 31 will pay minimum tax at 0.6 per cent from January 1 to June 21 this year. Then, the company will pay 5 per cent up to August 28 from June 22 this year and later the company will pay 3 per cent for the rest of the period.
Already, due to government’s intervention in increasing turnover tax from 0.6 to 5 per cent for the incumbent FY caused a price hike carbonated beverages.
According to the Bangladesh Beverage Manufacturers’ Association (BBMA), more than 100 small and large companies are producing various types of beverage products including carbonated soft drinks, flavored drinks and malt and power drinks for meeting local demand and export also.
This sector has an annual turnover of around Tk 8,000 crore, in which major market players have already invested about Tk 10,000 crore in the industry, the association said.
