BTMA seeks extension of tax holiday period
Saturday, 24 November 2007
Refayet Ullah Mirdha
Bangladesh Textile Mills Association (BTMA) recently urged the government to extend the tax holiday period to the country's primary textile sector until 2012 for attracting more investment.
Business insiders are of the opinion that continuation of tax holiday in the textile sector up to 2012 will help strengthen the backward linkage in the country.
The tax holiday period for the country's primary textile sector ends in 2008.
If the backward linkage industries could be strengthened by attracting new investments, the country will be able to face challenges like the elimination of multi-fibre arrangement (MFA), business sources said.
President of the BTMA Abdul Hai Sarkar submitted a letter to the chairman of the National Board of Revenue (NBR) in this connection where he also requested for including some textile sub-sectors that have remained outside the definition of the textile sector and were thus being deprived of government facilities.
In the letter Abdul Hai Sarkar urged the government to provide government facilities to the yarn and fabric manufacturing and dyeing-printing-finishing mills, which the textile sector enjoys.
The BTMA also urged the NBR authorities to provide tax-holiday in case of re-investment in the textile sector from the retained earning for maintaining investment flow in the primary textile sector.
The BTMA had requested the government several times to withdraw the tax and VAT against import of polyester, viscose, acrylic and staple fibre chips and pet chips to remain competitive in the world markets, the BTMA sources said.
The production of polyester staple and viscose staple blended fibre in the country has declined 50 per cent over the last five months due to shift of production following the budgetary implications.
Sources said the prices of raw material for production of such yarn also increased more than 61 per cent in the world markets recently.
In June 2006, the international price of such raw material was US$1.95 per kg and the same stood at $3.15 per kg in June 2007, sources in the textile sector told the FE.
In the meantime, the government in its budget for 2007-08 fiscal, has imposed 10 per cent duty and 15 per cent value added tax (VAT) on import of such products.
"As a result, many mills that produced polyester and viscose, have already diversified to other products," said a textile investor.
Bangladesh Textile Mills Association (BTMA) recently urged the government to extend the tax holiday period to the country's primary textile sector until 2012 for attracting more investment.
Business insiders are of the opinion that continuation of tax holiday in the textile sector up to 2012 will help strengthen the backward linkage in the country.
The tax holiday period for the country's primary textile sector ends in 2008.
If the backward linkage industries could be strengthened by attracting new investments, the country will be able to face challenges like the elimination of multi-fibre arrangement (MFA), business sources said.
President of the BTMA Abdul Hai Sarkar submitted a letter to the chairman of the National Board of Revenue (NBR) in this connection where he also requested for including some textile sub-sectors that have remained outside the definition of the textile sector and were thus being deprived of government facilities.
In the letter Abdul Hai Sarkar urged the government to provide government facilities to the yarn and fabric manufacturing and dyeing-printing-finishing mills, which the textile sector enjoys.
The BTMA also urged the NBR authorities to provide tax-holiday in case of re-investment in the textile sector from the retained earning for maintaining investment flow in the primary textile sector.
The BTMA had requested the government several times to withdraw the tax and VAT against import of polyester, viscose, acrylic and staple fibre chips and pet chips to remain competitive in the world markets, the BTMA sources said.
The production of polyester staple and viscose staple blended fibre in the country has declined 50 per cent over the last five months due to shift of production following the budgetary implications.
Sources said the prices of raw material for production of such yarn also increased more than 61 per cent in the world markets recently.
In June 2006, the international price of such raw material was US$1.95 per kg and the same stood at $3.15 per kg in June 2007, sources in the textile sector told the FE.
In the meantime, the government in its budget for 2007-08 fiscal, has imposed 10 per cent duty and 15 per cent value added tax (VAT) on import of such products.
"As a result, many mills that produced polyester and viscose, have already diversified to other products," said a textile investor.