FE REPORT |
July 18, 2021, 8:35 a.m.
July 18, 2021 5:45:38 PM
The tax administration ultimately decided to offer a tax exemption to manufacturers of active pharmaceutical ingredients (APIs) and laboratory reagents in order to encourage local production of the items.
The pharmaceutical industry is eagerly awaiting such a waiver which is seen as a major tax incentive.
The income tax wing of the National Board of Revenue (NBR) recently took action for the sector in accordance with national API policy.
However, the NBR has yet to decide on the installation’s mandate. It typically delivers the same for 10 to 20 years.
Tax administration officials said they would issue a statutory regulatory order (SRO) in this regard after finalizing the process.
Industry insiders have long demanded installation until 2032.
According to the 2018 National Policy on the Production and Export of APIs and Laboratory Reagents, API manufacturers are entitled to the tax benefit.
API is the basic raw material for all types of drugs.
Industry insiders say there is huge potential for APIs in export substitution and exporting if they gain the support of government tax policy.
The API policy previously formulated recommended a 100% corporate tax exemption between fiscal year (FY) 2016-2017 and FY 2021-2022 for manufacturers of APIs and laboratory reagents.
The 100% tax exemption will be extended until 2032 for producers of at least five API molecules, he said.
A molecule is an organic compound used to regulate a biological process.
If a company can produce at least three molecules per year, it will benefit from a tax exemption of 75% until 2032.
However, BNR has not yet issued an SRO regarding the offer of tax exemption to API industries in accordance with API policy.
He had waived the withholding tax on income on the import of API raw materials which is valid until June 30, 2024.
In 2019, the NBR offered an exemption from paying value added tax on importing it.
According to this policy, local industries now meet 98 percent of the national demand for drugs.
Although Bangladeshi medicines are now exported to more than 160 countries, local manufacturers have to import 90% of raw materials from countries like India, China and Korea.
In API policy, the government has set itself the goal of achieving self-sufficiency by producing 370 important API molecules needed for exports.
In 2017, the number of locally produced API molecules and laboratory reagents was 41.