PPEs and surgical masks now VAT-free
The National Board of Revenue (NBR) yesterday exempted value-added tax on domestic manufacturing on personal protective equipment (PPE) and surgical face mask to reduce the cost and motivate increased production for the fight against coronavirus.
The income board also exempted the indirect tax in the supply and trading stage until June 30, 2020, according to a notification.
"Any firm which will make these will get the exemption benefit," said a senior official of the NBR seeking to remain unnamed.
The waiver comes following appeals from a number of companies and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to facilitate increased manufacturing of PPE and surgical masks in the face of escalating cases of COVID-19 along with fatalities, fuelling the necessity for the protective gears for physicians, nurses and other healthcare personnel.
In March, the NBR suspended duties and taxes on imports of medical supplies, including protective equipment and test kits.
The NBR said a wide array of PPE and face masks could possibly be required for treatment in the coming days as the pandemic continues to defend myself against a ferocious form.
The earnings official said a 15 % VAT is applicable at the manufacturing stage of PPE and surgical masks. For supply, 7.5 % VAT does apply, and for trading, a 5 % VAT.
These protective items will be VAT-free for another two months until June 30.
The VAT benefit comes as concerns about the caliber of PPE remains high in the united states that reported 11,719 coronavirus positive patients and 186 deaths until yesterday.
Syed Naved Husain, director of Beximco Group and leader of Beximco Ltd, said the business is working to make protective gears for both domestic and global market.
"When Beximco does something, you won't be a seasonal thing. Whatever we do, we look at twenty years ahead. We will not do it as an opportunistic thing," he said.
Husain said you will find a misunderstanding on the market that if you have a workforce that may stitch, you can make PPEs.
"That's very dangerous."
The medical standard is quite different from the style standard.
"In the style standard, you make a mistake, someone are certain to get angry as the clothes that he bought will not look nice or it generally does not fit. However in this, you have zero tolerance. You should deliver quality and that quality must comply with the clear international standard. So, we are considering all of that in an effective way on a long-term horizon of twenty years."
Husain said it isn't clear when Beximco can get its PPEs ready.
"There is a lot of work going on. We are doing global research to achieve the product up to the best international standard."
Asked whether Beximco is collaborating with a company on the venture, he said: "Yes. But I cannot disclose their names.
