The National Board of Revenue (NBR) has waived the 15% VAT and 5% advance tax on capital machinery imports for green shipbreaking yards to attract more investment in environmentally compliant facilities.

Previously, businesses paid a 26% duty on such imports. The new exemption, announced on December 22, leaves a 5% customs duty and 1% advance income tax unchanged.

Bangladesh, home to 50 shipyards, has only six green-certified yards, with 13 in the certification process, per the Bangladesh Ship Breakers and Recycling Association (BSBRA). Under the Hong Kong International Convention signed in 2023, only green-certified yards can import scrap ships from mid-2024.

The NBR order mandates that imported equipment be used exclusively in green yards and prohibits its sale or transfer within five years. Industry leaders view this decision as a significant step toward meeting environmental standards and boosting sector investment.