The country's private jute millers sought reduction of advance source tax on export earnings in the proposed budget.
Currently, exporters pay 0.5 per cent advance source tax on their export earnings. However, the government has proposed for 1.0 per cent advance source tax in the budget for fiscal year (FY) 2022-23.
The Bangladesh Jute Mills Association (BJMA) requested for reduction of the tax from 1.0 per cent to 0.25 per cent.
The apex body made the requests to the government through The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Wednesday.
The BJMA said the jute sector has been greatly impacted by the Covid-19 pandemic, and still it is struggling to return to normal. In this situation, excessive tax will be the burden to the sector.
The BJMA also demanded the waiver of source tax on export subsidy, and raw jute purchase.
The government deducts 2.0 per cent tax at source on raw jute purchase, and 10 per cent on cash incentive from export earnings.
The BJMA said source tax on cash subsidy is not rational as the incentive was being provided for the support of the exporters.
It also said because of the 2.0 per cent source tax, farmers were being deprived of due prices of their raw jute.
Abdul Barik Khan, secretary general of the BJMA, said that jute contributes to the export basket, and protects the environment through meeting local demand for the products. If the sector does not get necessary fiscal support, it will fail to flourish further and miss the target of export earnings.
arafataradhaka@gmail.com