National Board of Revenue has waived value added tax on four types of services being used by the projects taken under public private partnership initiative.
Signed by NBR Chairman Nojibur Rahman, the VAT wing recently published a special order, offering the facility to construction firms, consultancy and supervisory firms, suppliers of construction materials (except petroleum products) and legal consultants.
The decision was taken in line with proposals made by Public Private Partnership Authority (PPPA), officials said. The authority is run under the Prime Minister’s Office.
Officials said the VAT waiver on the services would facilitate development of the public sector infrastructure and services vital for the country.
The government has taken up PPP projects to reduce government expenditure and ensure cent percent public services to the people through PPP projects.
However, the NBR has tagged few conditions for suppliers to get the VAT exemption.
The investors will have to get certification from a nominated official of PPPA for receiving the tax benefit, according to the order.
The certificate should have clear mentioning of the investing firm’s name, address, VAT registration number, name of approved PPP project, work and duration of the project and if the services involved with the project are under the PPP or not.
A copy of the certification has to be sent to the NBR directly from PPPA to help suppliers get the benefit.
The government in 2009 first introduced the PPP initiatives as it would not alone be able to construct educational institutions, specialised hospitals, highways, railways and large bridges without private sector cooperation.
In September 2015, the PPP law was enacted to draw more foreign and private investment in the service-oriented sector.
This fiscal year, the government has allocated Tk2,000 crore for the PPP projects.
The PPPA has so far undertaken 44 projects from different sectors. Of them, the projects including Dhaka Elevated Expressway, haemodialysis centres at Chittagong Medical College Hospital and at National Institute of Kidney Diseases and Urology in Dhaka are in progress, according to the PPPA website.