The government has reduced the turnover tax on the carbonated beverages industry to 3%, which was set at 5% for the current fiscal year. 

The decision will come into effect immediately, according to a notification by the National Board of Revenue (NBR) on Wednesday (30 August). 

Earlier, the government imposed a high turnover tax on the beverages industry to squeeze out more revenue from this sector, according to finance ministry officials.

The existing turnover tax rate of 0.60% for the carbonated beverages industry was fixed at 5% from the next fiscal year, officials said, adding that the advance income tax paid for raw material imports will be counted as the minimum tax.

According to the Bangladesh Beverage Manufacturers' Association, this sector has an annual turnover of about Tk8,000 crore and some major market players have already invested about Tk10,000 crore. Of them, Akij Food and Beverage invested more than Tk800 crore. 

Coca-Cola franchise International Beverage and Abdul Monem Ltd invested Tk716 crore and Tk290 crore respectively for manufacturing beverages.

Transcom Beverage invested Tk756 crore, Globe Soft Drinks Tk565 crore, AST Beverage Tk384 crore, Pran Beverage Tk485 crore, Partex Beverage Tk229 crore, Sajeeb Corporation Tk140 crore and Meghna Group Tk336 crore.

The country's beverage sector has employed nearly 3.5 lakh people at production and distribution levels.