Duty hike on machinery import may cause setback in textile investment
Monday, 25 June 2007
FE Report
Investment in the country's textile sector might face a severe setback if the government slaps 10 per cent duty on import of textile machinery as proposed in national budget for 2007-08 fiscal.
President of the Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarker expressed the concern to a group of journalists at his association office Sunday.
He said the textile sector has been growing rapidly due to government's policy support by declaring it as a thrust sector in 1992.
"A lot of entrepreneurs have come with investment in textiles after giving it a status of a thrust sector. This sector has also been earning a large amount of foreign exchange every year after meeting the local demand," Sarker told the journalists.
He said the BTMA leaders have already met with finance adviser AB Mirza Azizul Islam at his office and expressed their concern about the future of the sector.
Sarker said the imposition of 31.1 per cent (10 import duty, 15 per cent VAT and advanced income tax) duty on import of basic raw materials like viscose will hurt the textile sector, particularly the synthetic textile.
Former chairman of the BTMA, A Matin Chowdhury said the project cost for establishing a textile unit increased manifold over the last few years.
"The cost of infrastructure development has increased significantly due to price hike of cement, mild steel (MS) rod, labour and land. Besides, there has been devaluation of the local currency against the US dollar," Matin Chowdhury said.
He said currently, a total number of 4.5 million workers are employed in the textile and readymade garment sector.
He said if the fresh investment in the textile sector does not come, the unemployment rate will increase in the country.
The government should continue with the zero per cent duty on import of the textile machinery and basic raw materials to help the sector remain competitive with those of other countries like India, Pakistan, Vietnam and China, Matin Chowdhury said.
He said India and Pakistan have been maintaining a zero per cent duty on import of textile machinery along with higher incentive for the development of the sector.
Investment in the country's textile sector might face a severe setback if the government slaps 10 per cent duty on import of textile machinery as proposed in national budget for 2007-08 fiscal.
President of the Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarker expressed the concern to a group of journalists at his association office Sunday.
He said the textile sector has been growing rapidly due to government's policy support by declaring it as a thrust sector in 1992.
"A lot of entrepreneurs have come with investment in textiles after giving it a status of a thrust sector. This sector has also been earning a large amount of foreign exchange every year after meeting the local demand," Sarker told the journalists.
He said the BTMA leaders have already met with finance adviser AB Mirza Azizul Islam at his office and expressed their concern about the future of the sector.
Sarker said the imposition of 31.1 per cent (10 import duty, 15 per cent VAT and advanced income tax) duty on import of basic raw materials like viscose will hurt the textile sector, particularly the synthetic textile.
Former chairman of the BTMA, A Matin Chowdhury said the project cost for establishing a textile unit increased manifold over the last few years.
"The cost of infrastructure development has increased significantly due to price hike of cement, mild steel (MS) rod, labour and land. Besides, there has been devaluation of the local currency against the US dollar," Matin Chowdhury said.
He said currently, a total number of 4.5 million workers are employed in the textile and readymade garment sector.
He said if the fresh investment in the textile sector does not come, the unemployment rate will increase in the country.
The government should continue with the zero per cent duty on import of the textile machinery and basic raw materials to help the sector remain competitive with those of other countries like India, Pakistan, Vietnam and China, Matin Chowdhury said.
He said India and Pakistan have been maintaining a zero per cent duty on import of textile machinery along with higher incentive for the development of the sector.