Elevator assemblers get 3 more years of VAT waiver

The National Board of Revenue (NBR) has exempted elevator assemblers from paying value-added tax (VAT) for three more years until June 30, 2025, to encourage the growth of domestic manufacturing capacities.

The manufacturers will also enjoy the VAT waiver when importing components and machinery, the Internal Resources Division (IRD) said in a notification on March 21.

"We have also waived advance tax on import of materials for making elevators. This will reduce pressure on their working capital," said a senior official of the NBR, which is under the IRD of the finance ministry.

The existing VAT exemption benefit is set to expire on March 30 this year.

"The VAT waiver extension will help the local companies cut lift manufacturing costs, and it will ultimately benefit the domestic consumers," said Sohel Rana, chief business officer for electrical appliances at Walton, the leading electronics manufacturer in Bangladesh.

"Walton imports motors that are used in lifts. Our value addition for lift manufacturing is over 50 per cent as we produce everything but the motor in Bangladesh," he said.

Around 5,000 to 6,000 elevators are sold in Bangladesh a year and Walton produces nearly 100 a month, said Rana.

"We are planning to increase lift production in the near future."

The NBR first provided the benefit on May 14, 2020, to facilitate the domestic manufacturing capacity of elevators, demand for which is growing for construction of multistoried buildings.

Currently, some local firms namely Walton and Pran-RFL Group assemble lifts in Bangladesh for the growing market.