Plea to withdraw import duty, VAT on textile machinery

FE Team | Published: June 14, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Business leaders of the country's textile sector have urged the government to withdraw the proposed import duty and value added tax (VAT) on capital machinery to maintain the growth momentum of the sector.
The businessmen Wednesday held a meeting at the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) auditorium to voice their concern over different budgetary measures that are harmful for the textile sector.
In the proposed budget for fiscal 2007-08 the finance and planning adviser AB Mirza Azizul Islam has recommended 10 per cent import duty and an additional 15 per cent VAT revoking the previous zero tariff on import of such items, they lamented.
"The import cost of a textile machine will rise to Tk 12.5 million from Tk 10 million due to the newly imposed tax," chairman of the FBCCI Standing Committee on Textile and Backward Linkage Industries M A Awal said.
The new budgetary measures on textile machinery, if not withdrawn, will weaken the competitiveness of the country's highest export earning textile and clothing products in the international market, Awal, the immediate past president of Bangladesh Textile Mills Association (BTMA) said.
Presided over by the chairman of the FBCCI Standing Committee on Textile and Backward Linkage Industries, the meeting also pleaded the government for withdrawal of customs duty and VAT on import of raw materials like cotton, different fibres and dyeing used in textile industries.
Following Wednesday's meeting the business leaders of different textile and clothing associations issued a joint statement in support of their demands.
In the joint statement the business leaders of the 12 associations put forward their 12-point demand and urged the caretaker government to accept those in the interest of the textile and apparel sector's rapid growth and development.
As Bangladesh's competitors in textile and clothing sector -- India and China -- produce the capital machinery for textile industry themselves it will be impossible for the local textile and clothing businesses to survive after the imposition of the duties, they opined.
The businessmen also demanded withdrawal of 0.25 per cent turnover tax for textile and clothing sector, extension of tax holiday facilities for local industries until 2010 next and simplification of the proposed three-tier tax system.
Signatories to the statement include Bangladesh Garment Manufacturers' and Exporters Association (BGMEA) president Anwar-ul-Alam Chowdhury, Bangladesh Knitwear Manufacturers' and Exporters Association (BKMEA) president Fazlul Haque, BTMA acting president Jahangir Alamin.
In the statement the CCCI president also urged the finance and planning adviser to remove clinker and fly ash from mandatory pre-shipment inspection (PSI) to help grow the cement industry.
"As a consequence of the proposal, a good number of workers will lose their jobs as the investors will not feel encouraged to establish new production units," president of the Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarkar, who is now on a visit to the USA told the FE Wednesday over telephone.
He urged the government to maintain zero per cent duty on import of capital machinery for textile sector.