16 non-RMG listed firms to get uniform tax benefit

The uniform 12 per cent corporate tax proposed for non-RMG exporting industry will bring benefits to 16 publicly traded companies as it will increase their income due to the tax cut.

As per the proposed budget for FY23, listed companies have been allowed a conditional 20 per cent corporate tax benefit. But these 16 non-RMG companies have to pay only 12 per cent as the government proposed uniform tax rate for non-RMG firms like those of RMG exporting industries.

In reaction to the uniform tax rate, most companies remarked that while their income will increase from before, it will not measure up too much in terms of percentage.

In the parliament, Finance Minister AHM Mustafa Kamal on Thursday proposed a uniform 12 per cent tax for non-RMG exporting industries. However, the rate is 10 per cent for green factories.

Regarding the benefits provided for exports in the proposed budget, Premier Cement’s Company Secretary Shafiqur Rahman said, “We have to pay 2 per cent advance tax at the import stage, and that is considered the final tax. Besides, source tax on exports has also been increased from 0.5 to 1 per cent.”

“Considering the overall situation, our income will have a positive effect, but not a lot,”

The companies listed on the capital market that will fall under this tax facility in the proposed budget are: Apex Food, Apex Tannery, Gemini Sea Food, Shinepukur Ceramics, Apex Footwear, AMCL (Pran), GSP Steel, Beximco Pharma, BATBC, Crown Cement, Reneta, SquarePharma, JMI Syringes and Medical Devices, BSRM Streel, BSRM Ltd, and Premier Cement.

However, incomes of the companies mentioned above generating from exports will only get the benefit of lower corporate tax if the proposed fiscal measure is approved finally.

JMI Syringe and Medical Devices Company Secretary Tarek Hossain Khan said, “Our medicines are exported more, syringe exports are less than that. While it is true that the government has given benefits in terms of tax, the income will remain the same if other conditions attached are to be implemented.

Apex Food Company Secretary Kamrul Islam and Gemini Sea Food Company Secretary Nazrul Islam both commented that all aspects of the proposed budget had not yet been reviewed, and they will be able to say more about it later.

Capital market analyst Abu Ahmed told The Business Post that the government always gives companies various tax and VAT exemptions. But in contrast, investors do not get much benefit at the end of the year. The government should also keep an eye on how much revenue is growing in contrast to the facilities it is giving to companies.

He said the number of companies listed on the capital market who will enjoy this tax facility is very low. Therefore, it cannot be said for sure that the investors will benefit greatly from this.