The Bangladesh Textile Mills Association (BTMA) is seeking 100% import duty exemption for all types of fibers as the global demand for diversified garments has been increasing.
In a recent letter by Mohammad Ali Khokon, President, BTMA to the Ministry of Commerce said, “Nowadays, our foreign buyers specify fabrics and fibers for their ordered clothes. So, textile mills are importing many little-known fibers, apart from the traditional ones, as per their requirements.”
In the letter, Khokon also suggested increasing the wastage rate for making yarn from raw cotton to 17% from the current 10%.
Khokon said, “Even, the fibers are not on the customs schedule containing the Harmonized System (HS) codes (a standardized numerical method of classifying traded products). As a result, textile mills import the little-known items under HS codes for similar products. Unfortunately, the customs authorities sometimes identify such imports as false declarations and fine importers.”
BTMA President insisted the government to take essential steps for hassle-free imports and excused duties on all the non-traditional fibers in a bid to encourage diversification and expand exports to new markets.
In the letter, BTMA demanded the ministry to brief the National Board of Revenue about the matter so that the revenue agency can consider the duties exemption in formulating the national budget of the upcoming fiscal (FY2022-23).
The textile and clothing sectors are struggling to make their recovery from the Covid-induced fallouts.
BTMA also demanded the government to continue the 15% corporate tax rate facility until 2026 for the companies involved in the sector. The tax waiver is supposed to end in June this year, which the sector has been enjoying since the 2019-20 fiscal.
The association said the abridged corporate tax rate aided them to surge capital and continuing such a facility would also benefit the government in the long run.
The trade body demanded reducing import-duties on textile parts to 1%, like capital machinery, from the existing 26-104%.
The letter said, “It became tough to continue businesses competitively for the existing high import duties on instruments of the mills.”
The BTMA also wanted to cut down value-added tax on locally manufactured yarn to Tk3 per kg. Presently, it is Tk6 per kg.