Corporate tax for the readymade garment (RMG) industry of Bangladesh has been reduced from 15 per cent to 12 per cent and the same has gone down to 10 per cent from 14 per cent for green RMG factories, as per the Finance Bill for 2017-18 that has been approved in the country’s Parliament. It is expected to encourage the sector to expand investment.
The Dhaka Chamber of Commerce and Industry (DCCI) has welcomed the amendments made in the proposed budget through approving Finance Bill 2017- deferring the plan to enforce the VAT and SD Act 2012 for another two years and reinstating the existing VAT Act 1991 keeping the multi-stage VAT rates replacing proposed uniform 15 per cent VAT.
DCCI feels the Finance Bill approved in Parliament with postponement of the uniform 15 per cent VAT will encourage business and private investment downplaying the apprehension of steep price hike for wide ranges of products and services along with inflationary stress on the economy. Amid the pro-growth amendments of the Finance Bill for FY 2017-18, DCCI feels that the Budget for FY 2017-18 will accelerate growth and stimulate private sector investment, driving the country to the league of middle income country by the year 2021 envisioned by the government.
Reduction of corporate tax from the 20 per cent to 15 per cent for the country’s RMG export sector was proposed in Budget 2017-18 presented in Bangladeshi Parliament. For RMG companies possessing internationally recognised green building certification, the Budget has proposed reduction of tax rate to 14 per cent.
