Finance Minister AMA Muhith proposed special incentive to the country's businesses including reduction in deduction of tax at source on 'Cash Incentive' from 5% to 3%.
"To encourage the export sector, I propose to reduce the rate of deduction of tax at source on Cash Incentive from 5% to 3%," he said while presenting the budget for the fiscal 2014-15 at the Jatiya Sangsad here.
The Finance Minister placed the annual budget of Tk250,506 crore for the fiscal 2014-15 at the parliament this afternoon.
Muhith said, "Considering the views of different trade bodies including FBCCI, I propose to reduce deduction-rate at source from existing 5% to 3% on local LC valuing more than Tk5 lakh.
"In addition, I propose not to deduct at source on local LC of daily necessary consumer items including rice, onion, lentils, turmeric, chili, wheat, maize, flour, salt, edible oil, sugar, etc."
The Finance Minster said in some cases, tax exemptions are made either to encourage domestic manufacturing or to benefit the general public.
Meanwhile, he said, tax deduction rate at source on garments export has been reduced from 0.80 percent to 0.30% and the rate, for all other exports, has been reduced from 0.80% to 0.60% to provide more competitive edge to the export sector.
These preferential rates will remain effective up to 30 June, 2015, he said.
