New Agro Entrepreneurs to Get 10-Year Tax Exemption
Bangladesh government will provide new agro entrepreneurs to get 10-year tax exemption facility in the next budget in four agro-based sectors to generate new investment and boost job creation in rural Bangladesh, sources from the finance ministry confirmed this.
The facility comes with a number of conditions including the minimum investment of Tk1 crore.
Entrepreneurs who will invest in the sectors from 1 July 2021 to 30 June 2030 will qualify for the tax exemption on revenue for the first ten years of their commercial production according to the indication of the sources.
The four agro-based sectors are agri processing, fruit processing, milk and dairy production, and farm machinery manufacturing.
However the finance ministry officials said that agro-based entrepreneurs already in business will not have access to the facilities, even if they establish or merge with a new venture.
There are a number of conditions that must be met by the new investors to qualify for the tax exemption. Conditions to avail the exemption includes :
New agro entrepreneurs to get 10-year tax exemption must get registered with the Bangladesh Investment Development Authority
The manufacturers must get registered with the Bangladesh Investment Development Authority (Bida).
Minimum Investment amount is BDT 1 crore (USD 0.12 million)
However Prof Dr Sayema Haque Bidisha said those who have already been in agro-based businesses on a limited scale can also get the support.
“Because investing Tk1 crore is a big deal for a rural and small entrepreneur,” Dr Bidisha noted.
The raw materials have to be locally produced.
Conditions for collecting raw materials for the factories have also been imposed. Others do not have the exemption facility in the manufacturing units. Moreover, if a government agency for poor foods or hygienic factory environments has any problems with the manufacture and processing units, the factory will disappear.
The investors will have to strictly follow the Income Tax Ordinance 1984.
Investors are strictly bound by the 1984 Revenue Tax Order since any breach of tax legislation will result in revoking of facility and regular tax rates are imposed on the manufacturer.
The manufacturers at their production facilities will have to add at least 30% value to the imported fuel-run or electric equipment.
Any kind of equipment used for agriculture or agriculture was the exemption from taxes on agricultural machinery. In the production sites of manufacturers, the imported fuel or electrical equipment will have to add an added value of at least 30%.
Bangladesh lags behind in innovative and diversified agro products despite having plenty of fruits and vegetables. As the country is currently exporting only a few raw agri products, it wants to attract new investments into its sector to encourage products diversification.
After the announcement of tax exemption, Md Mosleh Uddin, CEO (Dairy) of Akij Food & Beverage Ltd, stated that he believes this budget assistance will lead to the development of new players on the market which will help expand the sector.
Mehjabin Zaman Mahee
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