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Tax holidays to continue, extended to more sectors PDF Print E-mail
Tuesday, 10 June 2008

The government has decided to continue its tax holiday scheme, to encourage entrepreneurs, for industries to be newly set up between July 1, 2008, and 30 June, 2011, reports bdnews24.com.

The budget for the upcoming fiscal year also announces new sectors to be added under the scheme.

In addition to keeping the existing sectors intact under the tax holiday incentive, the government has added agro-processing, diamond cutting, steel production from billet, jute industries, sections of the textiles sector, underground rail and monorail projects, and telecoms infrastructure excluding that for mobile phones.

For new industries set up in Dhaka and Chittagong divisions (except three Hill Tract districts), new industries will enjoy tax holidays on:

100 percent of income in the first two years
50 percent of income in the next two years
25 percent of income in the next one year

For new industries set up in Rajshahi, Khulna, Sylhet and Barisal divisions and the three Hill Tract districts, new industries will enjoy tax holidays on:

100 percent of income in the first three years
50 percent of income in the next three years
25 percent of income in the next one year
Tax cuts for listed companies  

Dhaka, June 9 (bdnews24.com) - Finance adviser AB Mirza Azizul Islam Monday proposed to revise the tax rate for companies listed for public trading from 30 percent to 27.5 percent.

In his budget speech for fiscal 2008-09, the adviser also proposed to cut the tax rate for the companies not listed for public trading to 37.5 percent from 40 percent.

The rate for banks, insurers, financial institutions and mobile phone operators will, however, remain unchanged at 45 percent.

The adviser proposed to impose income tax on dividend income in accordance with the applicable scheduled rates for companies instead of existing 15 percent.

Currently, according to Section 16CC of the Income Tax Ordinance, all companies, irrespective of profit or loss, have to pay a minimum tax on the basis of their turnover which is clearly in breach of the fundamental principles of Income Tax.
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