BCIC pleads for 3-year VAT exemption for Magura Paper Mills
Friday, 11 December 2009
Bangladesh Chemical Industries Corporation (BCIC) urged the National Board of Revenue (NBR) to exempt Magura Paper Mills Limited from paying VAT for the next three years to avert its closure that is likely to create social disorder and political instability, reports UNB.
BCIC secretary Chowdhury M Anwarul Iqbal on December 8 sent a letter in this connection to the NBR chairman.
In the letter, the BCIC secretary mentioned that the state-run paper mill is now in a bad shape due to the ongoing worldwide recession and needs urgent help from the government to keep it operational.
Magura Paper Mills is an export-oriented and import substitute industry which was established jointly by BCIC, ICB, Sonali Bank, CMC (China) and an entrepreneur.
The government has 69.28 percent share in the mill, BCIC 49.79 percent, ICB 9.38 percent and Sonali Bank 10.11 percent.
The mill, which went into production in 1998, currently produces 19,000 metric tons of packaging paper.
These packaging papers are used by the garment factories for making cartons. As the global recession affected the local garment industry, the packaging papers produced by Magura Paper Mills now sells at Tk 17,000 per metric ton, less than half of the Tk 35,000 per ton rate in fiscal 2007-08.
The current accumulated loan against the mill in Sonali Bank is Tk 1.260 billion. At present, the mill is unable to pay the loan installments.
The mill authority is also unable to pay for the raw materials, its gas, electricity and machine repairing bills. The mill needs at least Tk 40 million to keep it operational.
Since 1998, the mill paid Tk 270 million to the national exchequer.
Currently, some 250 workers, employees and officials are working in the mill.
BCIC secretary Chowdhury M Anwarul Iqbal in his letter to the NBR chairman said that if the mill is compelled to shut down, the investment of the government organizations will go down the drain.
"If the mill is shut down for financial crisis, it will create extreme adverse reaction, social disorder and political instability in the area (Magura)," he said.
BCIC secretary Chowdhury M Anwarul Iqbal on December 8 sent a letter in this connection to the NBR chairman.
In the letter, the BCIC secretary mentioned that the state-run paper mill is now in a bad shape due to the ongoing worldwide recession and needs urgent help from the government to keep it operational.
Magura Paper Mills is an export-oriented and import substitute industry which was established jointly by BCIC, ICB, Sonali Bank, CMC (China) and an entrepreneur.
The government has 69.28 percent share in the mill, BCIC 49.79 percent, ICB 9.38 percent and Sonali Bank 10.11 percent.
The mill, which went into production in 1998, currently produces 19,000 metric tons of packaging paper.
These packaging papers are used by the garment factories for making cartons. As the global recession affected the local garment industry, the packaging papers produced by Magura Paper Mills now sells at Tk 17,000 per metric ton, less than half of the Tk 35,000 per ton rate in fiscal 2007-08.
The current accumulated loan against the mill in Sonali Bank is Tk 1.260 billion. At present, the mill is unable to pay the loan installments.
The mill authority is also unable to pay for the raw materials, its gas, electricity and machine repairing bills. The mill needs at least Tk 40 million to keep it operational.
Since 1998, the mill paid Tk 270 million to the national exchequer.
Currently, some 250 workers, employees and officials are working in the mill.
BCIC secretary Chowdhury M Anwarul Iqbal in his letter to the NBR chairman said that if the mill is compelled to shut down, the investment of the government organizations will go down the drain.
"If the mill is shut down for financial crisis, it will create extreme adverse reaction, social disorder and political instability in the area (Magura)," he said.