Bangladesh has reduced income tax at source on export earnings to 0.70 per cent from the existing one per cent for the current fiscal year 2017-18. Export tax, has been lowered for all sectors except jute and jute goods with retrospective effect from July 1. Exporters will enjoy the benefit till June 30, 2018.

The benefit will be applicable for export of knitwear, woven garments, terry towels, cartons and accessories of garments industry, frozen foods, vegetables, leather goods, packed foods and any other goods and the banks will deduct the tax at the time of crediting the export proceeds to the account of the exporter.

The source tax will be considered as advance tax as well as the minimum income tax on export proceeds. Exporters would have to pay additional income tax if they show additional income from the export sector in the income tax returns. There has also been a reduction in corporate income tax for knitwear and woven garment manufacturers/ exporters to 12 per cent for the current fiscal year down from 20 per cent earlier. The rate of corporate tax, however, was reduced to 10 per cent for green factories which will have internationally recognised green building certification.