Government of the People’s Republic of Bangladesh

Office of the Chief Engineer

Roads and Highways Department
Sarak Bhaban, Tejgaon, Dhaka
Phone: +8802-8879299 Fax :+8802-8879199
E-mail : ce@rhd.gov.bd

Memo No. Date:

Subject: Request for Confirmation of Taxation and Pricing Format for Matarbari Port Development
Project (RHD Component).

Ref.: Project Director (ACE), RHD, Matarbari Port Development Project (RHD Component)’s Memo No.
PD/MPDP/322 dated 01-09-2021.

With reference to the letter mentioned above, the comments of this office are given below:

Comment on Serial No. 1, 2 & 4 :

The proposed provisions are accepted which may be incorporated in the bidding document.

Comment on Serial No. 3:

The foreign staff and workers of the Contractor shall be liable to pay Personal Income Tax irrespective of their
incomes such as salaries, wages etc. in the Employer’s Country according to the prevailing Tax Rules. However,
any exemption of Personal Income Tax for foreign staff and workers according to the loan agreement shall be
subject to approval of National Board of Revenue (NBR), Bangladesh on case by case basis.

Comment on Serial No. 5:

It has been mentioned in the referenced letter that JICA loans will not cover the amount of Custom Duties and
taxes applicable for importation of plant and materials under this project. To comply with this condition of JICA
loan agreement, the following segment of texts has been proposed in the referened letter:

“…….. the Employer will be responsible for paying the relevant amounts of any applicable import duties and taxes
so assessed directly to the Tax Authority of behalf of the Contractor…….”

The following provision may be followed instead of the above text:

“ For each contract package, the Employer shall take necessary steps for exemption of import duties and taxes
from NBR for the imported plant and materials. Alternately, the Contractor shall pay import duties and taxes which
will be reimbursed to the Contractor by the Employer from GOB part of the Contract. A Provisional Sum item for
such reimbursement may be considered in the BOQ of the bid document for each contract package (Provisional
Sum for reimbursement of imported plant and materials).

Comment on Serial No. 6:

The following provision may be considered

“The Contractor will be allowed to import only bona-fide plant, Contractor's Equipment and Temporary Works
items, which may include transport and delivery equipment certified by the Employer as being essential for
project implementation on temporary importation-cum-re-exportable basis.

However, the Contractor shall post with the customs authorities at the port of entry an approved export bond or
bank guarantee, valid until the Time for Completion of the Works plus six months, in an amount equal to the full
import duties and taxes which would be payable on the assessed imported value of such Contractor's
Equipment, plant and Temporary Works items and callable in the event that the Contractor's Equipment and
plant are not exported from the Employer's country on completion of the Contract. A copy of the bond or bank
guarantee endorsed by the customs authorities shall be provided by the Contractor to the Employer, and copied
to the Engineer, upon the importation of individual items of the Contractor's Equipment, plant, Temporary Works
items or goods.

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 To obtain exemption of Duties and Taxes on bona-fide plant, Contractor's Equipment and Temporary Works
items, the Contractor shall submit a Master List, certified by the Employer, to the National Board of Revenue for
their information and final approval.

The Master List will be based on the list of equipment submitted by the Contractor in the Bid. The list of
equipment submitted by the bidder will be reviewed and modified, if necessary, at the time of finalization of the
Contract Agreement in consultation with the National Board of Revenue.”

Comment on Serial No. 7:

The proposed provisions are accepted which may be incorporated in the bidding document.

Comment on Serial No. 8:

The Unit rate of each item shall include IT and VAT which will be deducted at source on payments from the
Employer to the Contractor. In case of any change in VAT and IT rates, the corresponding effect shall be reflected
in the Contract price according to the provision of conditions of Contract.

Therefore, he is requested to take necessary action in light of the above-mentioned comments.

(Md. Abdus Sabur)

Chief Engineer

Project Director (ACE, RHD)

Matarbari Port Development Project (RHD Part)
RHD Foreign Aided Projects Office Building (1st Floor)
Road-27, Block-A, Banani, Dhaka-1213

Copy:

Additional Chief Engineer, RHD, Planning and Maintenance Wing, Sarak Bhaban, Tejgaon, Dhaka.

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