The New Nation - Internet Edition

ACCORDING to a study, government at present provides the tax holiday concession to a myriad of emerging industries and services. Under the scheme, the government allows duty free imports of raw materials and equipment and income tax waiver for five years from operation to about 1,000 units under 18 industrial sub-sectors. The industries in these sectors have benefited in varying degrees from receiving this facility. If they were asked to pay taxes right from the outset, many of them would probably turn uncompetitive and wither away prematurely.

But the tax holiday helped them to remain in operation and to actually prosper in many cases. Thus, these enterprises are not only creating more employment in the economy and opportunities for earning for unemployed people, a broader base for taxation is also being created after the expiry of the tax holiday period. But a decision was taken by the National Board of Revenue (NBR) to wind up the tax holiday facility in the 2004-5 fiscal year. Later on the decision was revised after extending its duration for another three years. Thus, the benefit is to be withdrawn by the end of this fiscal year.

But many operators of industries under the 18 specified sub-sectors are saying that it is not time, yet, to withdraw tax holiday. They are not for indefinitely continuing with tax holiday but for its extension for some more time. The chambers and trade bodies have urged the government to retain tax holiday in the selected sectors for some time to sustain the growth of industrialisation. This demand of the business bodies sounds reasonable and merits consideration while preparing the national budget for the next fiscal year.