Paint industry may face setback due to duty imposition
Wednesday, 16 June 2010
FE Report
The country's Tk 10-billion worth paint industry may face setback following the imposition of supplementary duty on the product, paint manufacturers told the FE Tuesday.
They said Bangladesh's market, growing on an average 10 per cent a year, may be grabbed by the imported paint products if the new budgetary measure remains in force.
The paint producers also said those who wanted to invest in the sector might be discouraged following imposition of supplementary duty on it.
"Many wanted to expand their plants and a few foreign companies were eager to manufacture car paints in the country. I think they all will be discouraged," Abdur Rahman, secretary general of Bangladesh Paint Manufacturers Association (BPMA) said.
Mr Rahman who is also managing director of Anchor Paint told the FE: "Locally manufactured paints will be costly than the imported ones after imposition of the duty."
Earlier, the country's around 50 paint makers with their plants mostly located in Dhaka and Chittagong, used to pay only 15 per cent value added tax (VAT) on their maximum retail prices (MRP).
Local manufacturers, however, said that small paint makers will not survive after the tax imposition while big producers will continue to run their trade as they get VAT rebate on imported raw materials.
"Only two big companies -- Berger and Asian Paints - import directly. The remaining manufacturers take raw materials from traders and are not covered under VAT rebate," Mr Rahman added.
Paint makers use around 90 per cent imported raw materials from China, India, USA, Germany, Belgium, Korea and Taiwan to manufacture the products.
The country's Tk 10-billion worth paint industry may face setback following the imposition of supplementary duty on the product, paint manufacturers told the FE Tuesday.
They said Bangladesh's market, growing on an average 10 per cent a year, may be grabbed by the imported paint products if the new budgetary measure remains in force.
The paint producers also said those who wanted to invest in the sector might be discouraged following imposition of supplementary duty on it.
"Many wanted to expand their plants and a few foreign companies were eager to manufacture car paints in the country. I think they all will be discouraged," Abdur Rahman, secretary general of Bangladesh Paint Manufacturers Association (BPMA) said.
Mr Rahman who is also managing director of Anchor Paint told the FE: "Locally manufactured paints will be costly than the imported ones after imposition of the duty."
Earlier, the country's around 50 paint makers with their plants mostly located in Dhaka and Chittagong, used to pay only 15 per cent value added tax (VAT) on their maximum retail prices (MRP).
Local manufacturers, however, said that small paint makers will not survive after the tax imposition while big producers will continue to run their trade as they get VAT rebate on imported raw materials.
"Only two big companies -- Berger and Asian Paints - import directly. The remaining manufacturers take raw materials from traders and are not covered under VAT rebate," Mr Rahman added.
Paint makers use around 90 per cent imported raw materials from China, India, USA, Germany, Belgium, Korea and Taiwan to manufacture the products.