Export Corporate Tax Expected to Be Cut From 30% to 12%

Currently, non-RMG related export industries' corporate tax is 30% and in the upcoming budget Govt. of Bangladesh is expected to cut this to 12%, the same as the RMG industry. According to sources, the government is going to introduce a new corporate tax rate to encourage export diversification. The existing tax rate for export-oriented RMG factories stands at 12% and it is 10% for green factories.

The entrepreneurs of the non-RMG sectors have welcomed the decision of a massive cut in corporate tax. This initiative is particularly beneficial for RMG accessories and packaging manufacturers. As these factories were not considered to be part of the export-oriented RMG industry.

Talking to Dhaka Tribune, Moazzem Hossain Moti, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said that they have been asking for this for 8 years. He added, “This massive cut in corporate tax is a smart move of the government and we warm-heartedly welcome it.”

Furthermore, this benefit levels the playing field and ensures that non-RMG sectors go for more diversification. Industry experts also called this an export-friendly initiative which may minimize the deficit in the balance of payment in foreign currency.

According to sources, these reduced corporate tax rates will not be applicable for transport services, mobile telecommunication services and internet and internet-based services.

Entrepreneurs also said that it is a very important decision to promote other industries and maintain equality with the export-oriented garment sector. They also hoped this move will also help reduce the trade deficit to some extent.