Duty withdrawn on capital machinery for export plants

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President Iajuddin Ahmed yesterday approved the budget for fiscal year 2007-08 without imposing the duties proposed on computer accessories, mobile phone sets, and export-oriented capital machinery.

“Most of the changes relate to customs duties. There are a few changes regarding VAT and income tax,” Finance Adviser Mirza Azizul Islam said. He declined to elaborate on the changes but said he would explain those at a press conference Saturday.

Accompanied by Finance Secretary Mohammad Tareq and National Board of Revenue (NBR) Chairman Badiur Rahman, he went to the Bangabhaban yesterday afternoon for the president’s nod to the financial plan.

Now that no parliament is in place, the budget will be passed through an ordinance under section 93 (1) of the constitution. Approved by the council of advisers Wednesday, it will come into effect on July 1.

Talking to the journalists at the Bangabhaban, the finance adviser said import duty on computer accessories has been cut.

The tariff gap between the finished and intermediate goods that was earlier proposed to be reduced however will rise, he added.

The private universities have been kept out of the value added tax (VAT) net.

Asked about public representation in the approval process in absence of a legislative body, the adviser claimed that it had more of it than any year before.

He said in the past, the nation hardly saw any fruitful budgetary discussion in the Jatiya Sangsad. “The lawmakers used to demand additional funds for their respective constituencies,” he said.

But this time, a cross-section of the population had sent suggestions on the proposed budget to the finance ministry, he noted.

The approved budget contains a provision of conditional withdrawal of the import duty on newsprint, said sources in the NBR.

It has increased the minimum income tax payable to Tk 2,000 from the proposed Tk 1,800. Besides, there are changes in rates for those in the high-income brackets, they added.

It has also withdrawn the proposal for raising the duty to Tk 500 from the existing Tk 300 on every mobile phone set to be imported.

To promote export-oriented industries including textiles and pharmaceuticals, the approved budget provides for a duty of only five percent but that will be subject to certain conditions. Manufacturers of 100 percent export-bound textiles won’t have to pay any duty.

Besides, safeguard tax might be levied on the imports that pose threat to local industries.

Mirza Azizul Islam unveiled the proposed budget through a speech over radio and TV on June 7. He called for feedback from different sections.

The finance ministry officials said they received 1,808 suggestions through e-mails and conventional mails.

Those had been compiled and sent to the council of advisers for their consideration. Besides, recommendations of different chambers, trade bodies and leading economists too were taken into account.

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