BAPA Proposes Tax Relief and Duty Cuts to Boost Agro-Processing and Mineral Water Supply

The Bangladesh Agro-Processors Association (BAPA) has proposed exemptions from source tax deduction on the supply of agricultural products. Additionally, the organization has recommended reducing the VAT rate from 15 percent to a single-digit figure, lowering the VAT rate at the business level from 7.5 percent to 3 percent, and providing VAT exemption on supplies of products made from materials that already receive a 50 percent higher exemption.

BAPA has also proposed withdrawing supplementary duties on mineral water (up to three liters). The organization stated that in major cities, mineral water is a reliable source of safe drinking water. Mineral water is not a luxury product; it is an essential commodity. Imposing supplementary duties on this product is not only unreasonable but also unjust.

To ensure uninterrupted import operations of products by bonded enterprises during their annual audits, BAPA proposed temporary availability approvals. It further suggested monthly bonded enterprise UP approvals and exemption of bonded facility benefits for institutions under different commissionerates.

Meanwhile, the Bangladesh Agro-Chemical Manufacturers Association proposed duty concessions on 32 essential raw materials required for local pesticide production and export. The Bangladesh Fresh Fruit Importers Association recommended reducing import duties on fruits.

The Bangladesh Fertilizer Association also proposed lowering duties on the import of various raw materials. Additionally, under subheading Note-2 of the Customs Tariff, the Bangladesh Crop Protection Association recommended advance tax exemption on pesticides used in agriculture, duty and tax reductions on pesticides used for public health protection, tariff determination for pesticides based on import value, full tax exemption on ancillary components used in pesticide formulations, exemptions for organic pesticides, fruit production tools such as fruit bags, sticky traps, and personal protective equipment.

On Tuesday, 7 April, in the afternoon, these proposals were presented during a pre-budget discussion at the NBR Bhaban in Agargaon, Dhaka. The session was chaired by NBR Chairman Md. Abdur Rahman Khan. After hearing the proposals, the NBR Chairman assured BAPA that the board would work to address their concerns.

Responding to complaints from traders regarding VAT refunds, Abdur Rahman Khan said: “Many of your funds have been stuck, and refunds are not being received—the complaints you have raised. We are making significant progress in this area. We are automating the refund process as we are moving returns online. VAT refunds have already started being issued online automatically. The income tax system is also almost complete and is in trial runs. Once these processes are fully operational, refunds will be credited directly to your bank accounts. Currently, refunds are temporarily held to maintain discipline, but ultimately, you will receive them automatically.”

DBTech/MAR/EK/OR