Once upon a time only the rich people had refrigerators. Middle and lower class families could not afford to buy high priced refrigerators from foreign companies. Those days have changed. Thanks to the domestic companies, the price of refrigerators has fallen. As a result, refrigerators have found a place in the homes of low-income people.
The same is the case with air conditioning or AC. Like refrigerators, domestic brands have also increased in power in ACs. As a result, prices have come down. Motorcycles also no longer have to be imported. Motorcycles of different brands of different countries are now manufactured in Bangladesh. Basically, these three products have been removed from import due to the supply of gas and electricity in the country, necessary infrastructure, and tax benefits. Again, products manufactured in the country are also being exported to many countries. However, this time, corporate tax or income tax has been doubled in these industries. At the same time, income tax on spare parts of these products has also been doubled.
In this regard, the National Board of Revenue (NBR) has issued a notification on Tuesday (7th January). Industry stakeholders said that these industries will face new pressure due to the doubling of income tax, and the prices of products may increase.
Since 2009, the government has given concessions to the electronics industry. At least more than a dozen industries have been established in the country due to corporate tax, advance income tax on import of raw materials and tax concessions at production and supply level for these industries. These industries have been enjoying the benefits of paying 2 percent AIT on equipment imports and 10 percent tax on income since 2021. These benefits were supposed to remain in force until 2032. However, in the middle of the 2024-25 fiscal year, corporate tax on freezers, refrigerators, air conditioners, compressors and motorcycles has been increased from 10 percent to 20 percent. At the same time, advance income tax on raw material imports may also be doubled.
NBR believes that this initiative will increase income tax collection by TK. However, sector stakeholders said that the doubling of income tax may increase the price of domestically made motorcycles, refrigerators and air conditioners.
When asked, Jamuna Electronics Director (Marketing) Salim Ulya Salim told Jago News that the import-dependent products are now being produced in the country due to tax benefits. It has gone within the purchasing power of people. The current steps taken to increase taxes will not be good for the country’s economy. The rate at which VAT is increased will further increase the price of goods.
Economist Dr. Abdur Razzak told the media, the government’s revenue collection is very important. Because the previous government took a lot of loans from the banking sector. They took a lot of loans from abroad. This year we have to fight against inflation. The government cannot take more loans from the banks if it wants. The central bank cannot print money. There is no alternative to revenue collection. This tax rate will be a bit difficult in the midst of inflation. But there is no alternative.
