Bangladesh Textile Mills Association (BTMA) has arranged a press conference on proposed budget 2019-2020 at the Surma Hall, Pan Pacific Sonargaon Hotel, Dhaka, on June 19, 2019. Mohammad Ali Khokon, President, BTMA, highlighted the pros and cons of the budget for the textiles sector.
Imposing VAT on yarn
Imposing 5% VAT on locally produced yarn has an immense negative impact on the local millers.
“As already our millers are facing tough challenges against international price fluctuation, illegal import of yarn through mis-declaration, etc.,” Khokon expressed concern on it.
“For a long time, our millers are giving USD 20-30 cents loss to keep the mills open. And once this proposed 5% VAT comes into effect, VAT on per KG yarn will be around BDT 24.00,” he added.
And Bangladesh RMG sector might go back to the era of using imported yarn.
Source TAX cut on export
In FY 2018-2019 budget source TAX cut was 0.25%. But in the new proposed budget, this facility is not mentioned. Creating confusion among the industry people.
Advance TAX (AT) on machinery, spare parts, some raw materials, and materials
In the proposed budget 2019-2020 the government has proposed 5% advance TAX (AT) on machinery, spare parts, some raw materials, and materials.
“Which will increase the imported machinery and other cost, making the import more costly and unprofitable,” said Mohammad Ali Khokon.
Mohammad Ali Khokon urged to the Finance Minister the below things:
- Keeping the locally produced yarn out of VAT.
- Keeping the 0.25% source TAX cut facility
- Removing the 5% advance TAX (AT) on machinery, spare parts, some raw materials, and materials
