The government has decided to offer a full-range incentive package for developers of private economic zones (EZs), including tax holiday facility for 10 years, tax exemption from dividend income, and income tax waiver on service charges.
The incentive package has been approved at the latest board meeting of Bangladesh Economic Zone Authority (BEZA), chaired by Prime Minister Sheikh Hasina.
The Prime Minister’s Office (PMO) has recently asked the National Board of Revenue (NBR) to take necessary steps, so that BEZA can offer the facilities to the developers and investors.
To attract a long-term investment, the government has incorporated a set of tax benefits in the Bangladesh Economic Zone Act 2010.
NBR will have to issue Statutory Regulatory Order (SRO) to allow developers of EZs enjoy the facilities, tax officials said.
Both EZ developers and investors will get tax relief under the incentive package.
Under the package, VAT on electricity generation and procurement of equipments would be exempted for 10 years. Purchase of products from local market would be VAT-free for the investors for setting up EZs. There would be no customs duty on import of equipments, not available in the country, for developing EZs.
Foreign Direct Investment (FDI) in the EZs would not be restricted through ceiling. Investors of EZs are likely to enjoy full repatriation of capital and dividend.
The investors would be exempted from export tax, can enjoy 50 per cent rebate in land registration fees, and 20 per cent VAT exemption on utility service bills.
Foreign investors in EZs will be allowed to bring 5.0 per cent of a factory’s workforce from their own country. Foreign workers having technical expertise in the respective field would be allowed to enjoy 50 per cent income tax exemption for five years.
BEZA has approved 22 proposals for setting up EZs across the country. Of these, it has moved to appoint developers for two EZs. It has also issued two licenses for setting up EZs in private sector.
The government has planned to set up some 100 EZs on 30,000 hectares of land by next 15 years.
Five special economic zones on 8,816 acres of land at Mongla, Sirajganj, Gohira in Anwara, Mirsorai in Chittagong, and Moulvibazar are under review of the government.