B Mirror Report: The government is considering reintroducing tax holiday benefits for a number of industrial sectors in an effort to encourage fresh investment and support economic growth, officials said.

According to officials familiar with the matter, around 32 sectors that previously enjoyed tax exemption facilities may once again receive reduced tax benefits for a fixed period on new investments. These sectors had lost the incentives last year after the government withdrew the tax holiday scheme.

Industries likely to come under the renewed facility include active pharmaceutical ingredients (API) and radiopharmaceuticals, agricultural machinery, automobiles, barrier contraceptives and rubber latex products, as well as electronic component manufacturing such as resistors, capacitors, transistors, integrated circuits and multilayer PCBs.

The proposed list may also include bicycle and spare parts manufacturing, organic fertiliser, biotechnology-based agricultural products, boilers, compressors and related parts, computer hardware, home appliances, pesticides, leather and leather goods, locally processed fruits and vegetables, petrochemicals, pharmaceuticals, plastic recycling, textile machinery, toys, tyres, electrical transformers and automobile components.

Emerging technology sectors such as automation and robotics design and manufacturing, artificial intelligence-based systems, and nanotechnology products may also be brought under the incentive scheme.

However, officials have not yet finalised the duration of the tax benefits or the rates of exemption.

Under the previous tax holiday structure, eligible industries received a 90% tax exemption during the first two years of commercial production, meaning they paid only 10% of their total tax liability. The exemption rate then gradually declined to 75% in the third and fourth years, 50% from the fifth to seventh years and 25% from the eighth to tenth years.

Bangladesh Chamber of Industries (BCI) President Anwar-ul Alam Chowdhury Parvez said investment incentives would help stimulate the economy and encourage job creation.

“If the government provides tax benefits to sectors capable of contributing to employment and economic growth, it will have a positive impact on the economy,” he said.

However, he stressed that such incentives should be long-term and predictable to ensure investor confidence.

Income tax expert and SMAC Advisory Limited Managing Director Snehasish Barua said performance-based incentives would be more effective.

“Sectors with strong potential to contribute significantly to the economy should receive incentives based on their performance and productivity,” he said.

Another economist, requesting anonymity, warned that abruptly withdrawing tax holidays last year and suddenly restoring them again could weaken investor confidence.

“Decisions on including or excluding sectors from such facilities should be based on rigorous research, which remains lacking in our country,” he said.