Interim government has increased the income tax rate from 10% to 20% on companies manufacturing refrigerators, air conditioners, motorcycles, and compressors, including their spare parts.
A notification, signed by NBR Chairman Abdur Rahman Khan, was issued on Tuesday (7 January).
Previously, these industries were paying a 10% tax on their income.
An anonymous official from the NBR stated that the government had long provided tax concessions to these sectors, which typically require a corporate tax rate of 20-22%.
The tax relief aimed to nurture these industries to self-sufficiency.
With this achieved, the interim government has now withdrawn the concessions, reverting to the standard tax rate.
The notification also mentions that this new tax rate will be effective from the fiscal year 2025-2026 and remain in force until 30 June 2032.
Several conditions have been specified in the notification, including:
- The industry must be registered under the Companies Act, 1994.
- It must comply with various provisions of the Income Tax Act, 2023, particularly Sections 76 (5) and (6).
- The company should possess the capability to manufacture its own molds and dies.
- It should have in-house polyurethane foaming, powder coating, and active waste management plants.
- The industry must be approved by the NBR and should not be a restructured or spin-off business from an existing company or formed through the transfer of machinery or facilities from an existing business in Bangladesh.
- The NBR retains the right to revoke the approval if any company fails to comply with these conditions.
The tax relief, initially granted by the NBR through a directive issued on 19 October 2021, allowed these industries to enjoy a reduced tax rate of 10% until 30 June 2032, subject to fulfilling certain conditions.
From the start of production, these companies were required to pay a 10% tax rate.
Before 2009, these sectors benefited from even lower tax rates, paying just 5%.
