📈 FTZMA Proposes 15% Dividend Tax Credit to Drive Reinvestment in Budget 2027

The Free Trade Zone Manufacturers’ Association (FTZMA) has submitted proposals for Budget 2027 to boost foreign exchange earnings amid a weakening external account balance. • Key Tax & Foreign Exchange Proposals: • Dividend Tax Credit: Recommends a tax credit equal to the 15% dividend tax for non-resident shareholders who reinvest profits locally (via retained profits, equity injection, or new domestic ventures). • Net FX Assessment: Proposes a "Net Foreign Currency Contribution" test to measure actual foreign exchange retained after accounting for imported inputs, services, and fees. • Fast-Track FX Mechanism: Calls for a streamlined, three-stage process with dedicated officers to clear regulatory bottlenecks and evaluate new foreign exchange-earning ideas. • External Balance Context: • Flags a current account deficit of US$ 387 Mn for the first seven months of the year, reversing a surplus during the same period last year (reflecting a balance swing of nearly US$ 1.7 Bn in six months). • Infrastructure & Export Processing Zones (EPZs): • Urges expressway access, improved water supply, and township models for rural EPZs and manufacturing zones. • Calls for modernizing aging infrastructure in existing zones to offer plug-and-play facilities for new foreign direct investment (FDI).