Expression of Interest (EoI)

Towards Sustainable Agro-Mechanization:  Tax, Incentive Barriers in Bangladesh

Background:

The Cereal Systems Initiative for South Asia- Mechanization and Extension Activity (CSISA-MEA), implemented in the Feed the Future zones in Bangladesh, by CIMMYT in partnership with iDE and Georgia Institute of Technology, funded by the USAID. The Activity seeks to transform the means of agricultural production system through mechanization.

CSISA-MEA’s of the objective is to boost up local manufacturing in Bangladesh specially agriculture-based machineries. In relation to this CSISA-MEA is supporting Agriculture Based Light Engineering (ABLE) workshops in technical expertise and business improvement. Presently workshops are not environmentally appropriate, energy efficient, comfortable working environment. CSISA-MEA has plan to initiate model workshop idea piloting to establish new workshop or renovate existing workshop by using sustainable materials to ensure it is environmentally appropriate, energy efficient, comfortable working environment, gender sensitive, and socially inclusive.

To that end, CSISA-MEA seeks to hire a professionally skilled consultancy Firm to perform a feasibility assessment on “Towards Sustainable Agro-Mechanization:  Tax, Incentive Barriers in Bangladesh”. The task is about analyzing current policy challenges of tax, VAT, tariff and tax incentives (financial and non-financial) in agro-machinery, spare parts and associated raw material business, specially faced by Agro-based Light Engineering Enterprises, Agro-Machine Manufacturer, Importer Lead Firms, Dealer Shop, Machine Service Providers and some farmers. Based on previous policies and related studies, media report and key stakeholder consultation, a draft policy narrative (policy engagement goal statement, refers to a specific policy discourse/problem, how it came about, how can we put that right/options) which  will be prepared for further stakeholder consultation and validation at different level (districts, Dhaka/national). Finally, a study report finding will be shared for advocacy and a policy brief will be co-developed and handed over to AMMA-B to peruse with NBR and legitimate Ministry. The evidence generation will include - the implementation challenges of 10 years tax break policy of the government on targeted agri machine and its related parts. It will priorities machines and parts with harmonized system codes of National Board of Revenue to relate with advance tax withdraw, or tax exemption strategy of government on the import or domestic manufacturing.  Assess revise structure of farm machinery import and local manufacturing, explore government’s tariff strategy/instructions (NBR) on import and scope tax VAT tariff context of some future target machines.

OBJECTIVES OF THE ASSESSMENT

The imported machines and spare parts are minimally taxed whereas imported raw materials such as steel is heavily taxed. This means that domestic manufacture of parts and machines is more expensive that imported machines and parts inhibiting the development of the national light engineering manufacturing sector. This has a detrimental impact on employment of youth in regional / rural areas resulting in migration to Dhaka for employment. It also means that Bangladesh will remain dependent on the garment industry for national income. The purpose of this study will be to determine if this is a correct assessment of current taxation measures on imported finished products and imported raw materials and that this is a correct assessment of the impact of these taxation policies on the national economy. If it is then the study will suggest appropriate new taxation policy for the light engineering sector. This will be based on consultation with relevant private sector and government and non-government bodies. The study results will be verified at a national workshop on taxation policy.

1) Assess the 10 years tax break policy implementation challenges of the government on targeted agri machine and its related parts in Agri machinery sector in Bangladesh
2) Recommend machines and related parts with HS codes (Harmonized system code) of product related to advance tax withdraw, tax exemptions strategy of government on the import or domestic manufacturing/ of rice transplanter, agri-dryers, sprayers and potato planters and some potential machines
3) Assess revise structure of farm machinery (includes definition and specific code of target agri spare parts & machines, raw materials, associated inputs) imports in Bangladesh
4) Explore government’s tariff strategy/instructions (NBR) on import of certain spare parts to support domestic manufacturing (for example for - power tiller, power thresher, power reaper and seeders)
5) Scope tax VAT tariff context of some future target machines (include climate smart, gender sensitive or inclusive machines – battery driven power tiller, solar irrigation, solar pond aeration, solar chiller for fish, fruit, vegetables, solar charging station etc.) and some dairy, fish related machines in post-harvest, agro-processing, packaging area.

Proposed Area (s): Jashore, faridpur, Bogura, Chattogram, Dhaka and some other relevant locations if needed

EOI submission procedure:
Submit your technical proposal along with financial proposal to Dhon Raj Lama (d.lama@cgiar.org) and CC to  Shahida (shahida@cgiar.org) and Md. Kafil Uddin (k.uddin@cgiar.org). Please make sure that your email subject is “EOI for Towards Sustainable Agro-Mechanization: Tax, Incentive Barriers in Bangladesh”.

Technical proposal should have the following information:

• Understanding of the assignment (Max. one page)
• Your strength for this work includes team (MUST include experienced architect, structural & civil expert) and technical set-up. (Max. one page)
• Detail timeframe (Max. one page)
• Link of previous work (related to Taxation, policy on agriculture, mechanization and relevant industries etc.)

Financial proposal should have the following information:

• Detail financial budget for the assignment
• Travel, food, accommodation, and HR cost
• Legal documents (BIN/TIN, trade license)

To learn more please read the TOR

If you would like to learn more about the assignment and discuss it further, please contact Md. Kafil Uddin (k.uddin@cgiar.org).

Shortlisted candidates will be contacted to pitch their concept.

Last date of submission: April 30, 2024 before 5PM (Bangladesh standard time).