The government has decided to provide cash incentives to investors at the Economic Zones (EZ).
In this regard, the government is going to establish 10 more EZs following its move to attract more foreign investment shifting from China.
Investors at the Economic Zones are to get cash incentives for exporting from their agro-processing industries as per the government moves to attract more foreign direct investment. At the same time, 10 new economic zones are to get government nod to be established in the country.
Bangladesh Economic Zones Authority (BEZA) at its 7th Governing Board Meeting, chaired by Prime Minister Sheikh Hasina, made the decision on Thursday, to bring more foreign direct investment in the country, especially those withdrawing from China following the trade unrest, and outbreak of pandemic coronavirus. A committee has been formed in this regard.
The committee headed by the Prime Minister’s Principal Secretary, Ahmad Kaikaus was formed to analyze how to attract more foreign investment, what to do to compete with other countries, who are also offering similar investment opportunities, what type of incentives can be provided etc, to grab these opportunities.
Governing body members during the meeting urged the government to withdraw the additional 15 percent tax on the land allocation at the EZs. The committee considering the issue discussed whether it can be withdrawn.
BEZA has proposed an incentive package on what kind of offers can be given to the investors in the aftermath of the pandemic coronavirus. In the proposal, it was shown that compared to that in other countries, Corporate Rate Tax is higher in Bangladesh. BEZA thinks there is no alternative but to reduce corporate tax rates to bring investment to the EZs.
The newly-formed committee has been asked to submit a report to the Prime Minister on whether the corporate tax rate can be reduced in the post-Covid-19 situation, what could happen if it is reduced, and how Bangladesh will benefit.
BEZA also said, there is no option to relocating old factories in the current import policy of the country. In this crucial time, the existing import policy should be amended to create opportunities for the relocation of old industries and factories. At the same time, to attract foreign investment in the EZs, it is necessary to have a tax holiday facility for a full 10 years, which is not available now.
The new zones are Nawabganj Economic Zone, Tangail Economic Zone, Sapahar Economic Zone (Naogaon), Dinajpur Economic Zone, Noakhali Economic Zone, Sandwip Economic Zone, Sunamganj Economic Zone, Pabna Economic Zone, Charmegha Economic Zone (Barishal), and Manikganj Economic Zone.
