The government has taken a massive initiative to turn the pharmaceutical sector into an export booster to increase foreign revenue income.
The National Board of Revenue (NBR) has recently given good news for the expansion of the domestic pharmaceutical industry.
An organization that produces locally produced raw materials and exports drugs has been given another 10 years’ tax holiday.
The National Board of Revenue issued a notification in this regard on Tuesday.
In this sector, tax holiday facility has been given till 2022. According to the notification, the existing facility has been extended till 30 June 2032.
The NBR said investors have been given additional benefits to encourage the production of raw materials in the pharmaceutical industry in Bangladesh.
Experts said Bangladesh largely relies on imports for raw materials in the absence of local active pharmaceutical ingredients (API).
Around 85 percent of the Tk 5,000 crore worth of raw materials needed by the pharmaceutical sector is brought in from abroad, they added.
If Bangladesh can also produce raw materials for medicines, it is possible to earn about $7 billion each year, which is currently $ 3 billion, they informed.
The NBR circular said the tax holiday facility has been continued in the API sector with the aim of diversifying exports and encouraging domestic and foreign investment through sustainable industrialization.
In order to expand the domestic pharmaceutical industry, diversify products to create a competitive market, conduct research to improve the quality of medicines and produce the required raw materials in Bangladesh, it was decided to set up a pharmaceutical park in the country in 2008, and a project was approved by ECNEC in December of the same year.
The pharmaceutical park is known as ‘Active Pharmaceutical Ingredients’ or API. Where plots have been allotted to 42 pharmaceutical companies.
Prof ABM Faroque, former chairman of the pharmacy department at Dhaka University, told Bangladesh Post that there were allegations that private companies were not building the API infrastructure properly.
Advising to expedite its implementation, he said, “API will reduce the import dependence of the pharmaceutical industry on raw materials." Not only that, it will be possible to export raw materials.
He thinks that not having an API park in time is a big challenge for the pharmaceutical industry.
Dr Khondaker Golam Moazzem, Research Director of the Centre for Policy Dialogue (CPD), said, “We need to ensure that the lion's share of raw materials is produced in the country.”
Foreign direct investment or FDI in the pharmaceutical industry is very low, he said adding that, we have to bring in a lot of FDI.
The NBR said that in order to get the tax benefit, the manufacturing company has to submit a certificate from the Department of Drug Administration every year as per the rules.
There will be fines for producing substandard drugs and the tax benefit for that year will be canceled, it added.
However, the export earnings from the pharmaceutical sector have increased to stand at $ 42.17 million during July-September in the current fiscal.
In the last fiscal year 2020-21, this earnings was $ 169 million.