The National Board of Revenue has increased income tax on industries making motorcycle, freezer, refrigerator and air conditioner in a move to increase revenue generation from direct tax.
A statutory regulatory order was issued on January 7 stating that income tax on the above-mentioned industries and their retail parts makers had been made 20 per cent.
The new tax rate will come into force from FY2025鈥�26 beginning on July 1, 2025, and will remain valid until June 2032.
Tax officials, however, said that manufacturers and consumers would feel the impact of the move from now on.
Until the new tax rate comes into effect, the motorcycle assembling and refrigerator manufacturing companies have been paying 10 per cent income tax since 2021.
The revenue board has been providing tax rebate to these industries since 2009 in a bid to help them flourish.
Only 5 per cent tax was imposed on them in the initial years before doubling it in 2021.
The latest move has come within a week after the NBR increased the Value Added Tax on some 43 items and supplementary duties on several essential items to ramp up revenue generation, a major condition of the ongoing $4.7 billion loan programme with the International Monetary Fund.聽聽聽聽聽
Economists, however, have criticised the revenue regeneration moves and its timing that is marked by the decade-high inflation prevailing over the past two years.
They expressed disappointment at the interim government鈥檚 inclination to hike indirect taxes just as its predecessor, the now-ousted Awami League regime, did to increase revenue.
Facing criticism, finance adviser Salehuddin Ahmed on Tuesday said that he had directed the revenue board to reduce the income tax exemption from industries to generate more revenue from the direct tax.
Centre for Policy Dialogue distinguished fellow Mustafizur Rahman said that the consequence of increased VAT and income tax would be passed over to consumers already pressed hard over the past two years for the price hike of essentials.
In a report released on December 2024, the NBR calculated that Tk 1,15,056 crore was exempted in direct taxes during FY2021鈥�22, almost 2.9 per cent of the Gross Domestic Product in that financial year.
Economic zones and hi-tech industries accounted for 3 per cent of the total tax loss, equivalent to Tk 4,022 crore, said the report.
