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Tax Cuts for Corporations Will Aid the Growth of Developing Industries, According to Entrepreneurs

According to industry sources, equal tax benefits for the country’s rising export-oriented industries will boost the economy.

Export revenues from the home textile, leather goods, jute, and agriculture industries, like the garment business, have crossed the $1 billion mark in the first ten months of the current fiscal year.

With 20-25 percent growth, the country’s IT and pharmaceutical industries are also doing well. Furthermore, the global market has showed promise in the plastic, toy, and light engineering sectors.

According to entrepreneurs, the proposed budget’s corporate tax cut for FY2022-23 will benefit all of these businesses.

Rizwan Rahman, President of the Dhaka Chamber of Commerce and Industry (DCCI), stated, “For a long time, we have demanded equal tax benefits for all industries. With bond and corporate tax advantages, 7-8 industries, such as the clothing industry, will be able to bring in significant foreign exchange.”

Other export-oriented companies’ tax rates, such as readymade clothes, have been decreased to 12% in the proposed budget in order to improve Bangladeshi products’ competitiveness in the global market.

Corporates will have to pay a 10% rate if a factory is environmentally friendly.

Other export-oriented companies’ tax rates, such as readymade clothes, have been decreased to 12% in the proposed budget in order to improve Bangladeshi products’ competitiveness in the global market.

Corporates will have to pay a 10% rate if a factory is environmentally friendly.

The government has decreased corporate tax, according to Abdur Razzak, head of the Bangladesh Engineering Industry Owners’ Association. However, an increase in source tax will put exporters in jeopardy.

Light engineering is one of the country’s eight developing export areas. Despite the fact that the business, which is worth roughly Tk12,000 crore, was just recently formed in the country, it has struggled to export due to a lack of incentives. It used to make more than $600 million in exports, but that has since decreased. According to industry sources, the additional source tax could damage the industry.

“Unconditional exemption of the corporation tax rate on export earnings would play a key role in the development of the pharmaceutical business,” said SM Shafiuzzaman, secretary of the Bangladesh Association of Pharmaceutical Industries.

Last year, 53 companies in the country exported medications worth Tk1,800 crore, a 25 percent increase. Our medicines are sold in 142 countries throughout the world. He believes that the possibility for corporate tax exemption will help Bangladesh’s pharmaceutical industry grow in the global market.

Beximco, SKF, Incepta, ACI, and Square are among the companies now selling Bangladeshi medications to the United States. Square and ACI are also establishing manufacturing facilities in Africa and Latin America.

Officials from these organizations claim that the money saved as a result of the corporation tax exemption will lead to new investment opportunities.

The agro-processing industry has greater potential.

Despite the coronavirus epidemic, the agro-processing sector exceeded the $1 billion mark in export earnings in the previous fiscal year. The agricultural processing sector has already topped $1 billion in exports in the first ten months of the current fiscal year and is on track to break another record.

The agro-processing industry has greater potential.

Despite the coronavirus epidemic, the agro-processing sector exceeded the $1 billion mark in export earnings in the previous fiscal year. The agricultural processing sector has already topped $1 billion in exports in the first ten months of the current fiscal year and is on track to break another record.

He stated that as a result of the corporate tax reduction, large corporations such as ACI, Square, and Akij, as well as small businesses, will be able to expand.

Bangladesh is the world’s second-largest jute producer, with annual output estimated at 1.349 million tonnes.

Jute is also the country’s third-largest export sector. Despite exports of $1.17 billion, the sector has been struggling for a long period due to a variety of factors.

According to jute traders, the benefits of corporation tax exemption will be of little value to them because the majority of businesses in this industry are losing money.

“Around 95 percent of the country’s jute exporters are at a loss, and the remaining 5% generate small profits,” Mohammad Shahjahan, chairman of the Bangladesh Jute Exporters’ Association, stated. As a result, rather than granting corporate tax cuts, it is vital to provide a permanent incentive to the entrepreneurs in this business by establishing a policy for jute.

The cost of jute products has not increased as much as the cost of utilities such as electricity and gas. As a result, no one can conduct business at this time.

“Corporate tax exemption would not work for shoe exporters due to the 1% source tax on exports,” said Dilip Kajuri, deputy managing director of Apex Footwear Limited.

Currently, 70% of our overall profits are used to pay the 0.50 percent source tax. We will not make any money if we pay a 1% tax. As a result, the corporate tax decrease isn’t news to him.

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