Manufacturers favour widened, but lower tax net for SMEs

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FE Report
Local manufacturers demanded Monday lowering of taxes and tax slab to help the small and medium enterprises (SME) grow on a sustained basis in the competitive market.
They made the demand at the "Pre-Budget Discussion on SME Enabling Tax System" organised by the Small and Medium Enterprise (SME) Foundation.
"The government should halve the existing 5 per cent tax on intermediate raw materials to promote the local industry," said Enayet Hossain Chowdhury, President of Bangladesh Electrical Merchandise Manufacturers Association (BEMMA).
He requested the authority to impose 3.0 per cent tax on the total sales of industries, which are entitled to VAT rebate.
The BEMMA leaders also demanded 5 per cent cut in the existing tax rate of 12 per cent on raw materials used in manufacturing electric fans, capacitors.
The government reduces import tax on finished products every year, but the tax on raw materials has never been cut accordingly. The local products fail to compete with those imported as the price of raw materials is high, they observed.
They, however, suggested raising of the supplementary duty up to 60 per cent on electric light fittings, so that the local factories could compete with the low-quality imported fittings.
Abdur Razzak, President of Bangladesh Engineering Industries Owners Association (BEIOA), sought exemption of tax from any individual or company in the service sector.
AKM Shamsul Huda, Organising Secretary of Bangladesh Power Solution Providers' Association, demanded fixation of 1.5 per cent VAT at the level of manufacturing on the basis of their retail sales to promote the electronics industry.
There should be a considerable difference between the tax on finished goods and that on the local goods for helping the SME sector flourish, they said.
The leaders also stressed the need for more research and keeping abreast with technological advancement to aid capacity-building of the local industry.
They said lower tax rate always does not mean lower collection. If the tax-net is widened keeping the tax rate lower, more people will be interested in paying tax.
Syed Rezwanul Kabir, Managing Director of SMEF, Prof K Siddique-e-Rabbani, chairman of the Department of Biomedical Physics and Technology of Dhaka University, and Shahjalal, secretary of Bangladesh Handicraft Manufacturers and Exporters Association, among others, were present at the discussion.