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Cement manufacturers for waiver of 8.0pc AIT

43 per cent overcapacity hits the sector

FE Report | December 02, 2019 00:00:00

The cement manufacturers have demanded the waiver of 8.0 per cent non-adjustable AIT (Advance Income Tax) imposed on imported raw materials and supply of products to ensure the sustainable development of the industry.

The leaders of the Bangladesh Cement Manufacturers Association (BCMA) made the demand on Sunday while talking to a group of journalists in a city hotel.

"The gross profit of the cement manufacturing industry declined compared to previous years. It will be a question of survival if the 8.0 per cent AIT is not waived," said Mohammed Alamgir Kabir, the president of the BCMA.

He said a company will have to incur 40 per cent gross profit to survive against 8.0 per cent AIT.

"But it's quite impossible. The sector's profit growth declined in the current fiscal year (FY) compared to previous one," Mr. Kabir said.

He said the total investment in cement sector stood at around Tk 300 billion, of which Tk 190 billion came through bank loans.

"The cement manufacturing companies may face difficulties with the bank loans if the AIT is not waived," said Mr. Kabir, also the vice chairman of MI Cement Factory.

He said 5.0 per cent AIT was imposed on imported raw materials in the previous fiscal years.

"This 5.0 per cent AIT was adjustable. But the provision of minimum of 5.0 per cent AIT was included in the last FY creating burden on the sector."

The growth of the cement sector will be hampered seriously as there is no provision of adjusting the 8.0 per cent AIT, Kabir said and termed the new provision of non-adjustable AIT 'illogical.

"The cement factories established in the economic zones are waived from the AIT. This creates discrimination in the cement manufacturing sector," the BCMA president added.

On Sunday, the manufacturers also said there is no provision of 'minimum' AIT for other manufacturing sectors.

They said the National Board of Revenue (NBR) earlier assured them to resolve the issue. "But no outcome is yet to be visible."

Md. Shahidulla, the first vice president of the BCMA, also spoke at the view exchange meeting.

Presently, 38 companies, including two multinationals, are manufacturing cement for local and overseas markets.

Of the companies, seven are listed on the stock exchanges.

The listed cement companies are Aramit Cement, Confidence Cement, Heidelberg Cement Bangladesh, LafargeHolcim Bangladesh, Meghna Cement Mills, M. I. Cement Factory and Premier Cement Mills.

The overall production capacity of the sector has crossed 62 million metric tonnes per year against the demand of 34 million metric tonnes with 43 per cent overcapacity.

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