NBR to extend duty benefits to investors in hi-tech parks

hi-tech parksDaily Dhaka Times: The National Board of Revenue plans to offer duty benefits and increased tax breaks to investors and developers of hi-tech parks in an effort to attract investments and promote jobs for youths.

Under the scheme, the developers and investors in the parks will get a tax waiver from their dividend incomes in the first 10 years of their operations.

Also, the investors will get tax breaks from capital gains resulting from transfer of shares and enjoy 50 percent exemption from tax on payable royalties, technical know-how and technical assistance.

The benefit will be applicable for 10 years from the start of the firms’ operations in the parks.

In addition, the revenue authority also plans to offer value-added tax and duty benefits to allow investors and developers to import capital machinery and other equipment, according to NBR officials.

A notification in this regard will be sent out soon, an official said.
In the first three years of their operations, the investors and developers will get full tax breaks. The benefit will gradually decline and fully phased out in the 11th year.

The NBR initiated the process after Finance Minister AMA Muhith in his budget speech shared the government’s plan to provide special packages to encourage investment in developing economic zones and hi-tech parks along with investment in these areas. The Bangladesh Hi-Tech Park Authority or BHPA has approved six parks, with work on Kaliakoir and Jessore projects already underway. There are plans to facilitate establishment of 12 more parks in several districts to promote development of IT and information technology-enabled service (ITES) industries, both of which are still at their nascent stages.

Stakeholders said the country’s IT services industry, which employs more than 20,000 people, holds great potential owing to the vast pool of young, trained and English-speaking workforce.

The workforce is available at costs almost 40 percent lower than in established destinations like India and the Philippines, according to a study by KPMG in 2012.

With wages and operating costs going up in traditional outsourcing destinations, Bangladesh’s prospects are rising, it said.

The country offers attractive business opportunities for multinational companies interested in outsourcing or off-shoring, the KPMG study added.

The parks are expected to create nearly 10 lakh jobs and increase the present export earnings of $132 million manifold, according to government estimates. The government predicts that export receipts from IT services may reach the $1-billion mark by 2018.

– Sohel Parvez

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