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Economic Zone investors to get duty exemption on imports

  • Published at 12:44 am September 23rd, 2016
Economic Zone investors to get duty exemption on imports
The government recently offered a set of incentive packages for them to encourage more investments - both foreign and local. The Internal Resources Division issued separate gazette notifications to the effect of the benefits. The facilities have been offered for the EZs administered under the Bangladesh Economic Zones Authority Act 2010, officials said. However, the National Board of Revenue has tagged several conditions against the benefits including that the EZ developers and investors will have to be registered for VAT. All the goods imported under this notification have to be approved and certified by the Bangladesh Economic Zones Authority (BEZA) where the name of the product to be imported and description and quantity of the goods have to be certified by the BEZA. However, the investors or developers cannot avail the benefits if the materials like construction materials are available in Bangladesh. They will also not be given the benefit if the goods imported are not directly linked with development and construction of the EZs. Such products include office equipment, air conditioners, refrigerators, passenger vehicles, articles for household use and other similar goods, and consumable goods. Duty-free car import for industrial units Meanwhile, the authorities had also relaxed conditions for the EZ investors for duty-free car import facility to increase foreign investment inflow. An industrial unit of the EZ will enjoy import of two duty-free vehicles by investing $10m or equivalent local currency and employment generation of 500 people in that unit. However, the approval letter and certificate from BEZA have to be submitted to the customs authority at the time of assessment of duties and clearance of the imported vehicles. BEZA will allow EZ investors to import two duty-free vehicles including a Sedan car with a less than 2000cc engine or micro-bus, pick-up vans or double-cabin pick-ups for an industrial unit under the benefit. The importers, however, are not allowed to transfer ownership of the vehicles for five years after the import. Investors can import vehicles duty-free only once under the facility. The vehicle imported cannot be used for any other activity or any commercial purpose other than production purpose and for related activities of that industrial unit. Earlier, the NBR had offered complete tax-waivers on a company’s dividend income, capital gains from transfer of shares and on payable royalties, technical know-how and technical assistance until 10 years of commercial operation. It also offered 10-year tax holiday for investors and 12-year tax holiday for the developers of the economic zones and the high-tech parks. The government plans to establish 100 EZs across the country over the next 15 years, which are expected to generate about 10m additional jobs. By 2030, the export earnings only from the EZs are expected to stand at $40bn, according to BEZA.