The industry requests proper refund of over Tk750 crore accumulated advance income taxes to stay afloat
The cement industry suffered a 46 percent year-on-year decline in sales in April due to the nationwide shutdown in light of the coronavirus pandemic, according to the Bangladesh Cement Manufacturers Association (BCMA).
The industry fears that in the coming months, and even throughout the year, the drop in sales will be significant because the economy will take time to revive amid a decline in remittance and people's income.
The pandemic has forced the already-struggling industry, burdened by taxes on raw material imports amid stiff competition, to incur steep losses as it has been paying around Tk100 crore in monthly wages and salaries despite the difficult times it is going through.
To stay afloat, the BCMA has requested the National Board of Revenue (NRB) chairman to take proper measures to refund the cement industry's accumulated adjustable advance income taxes (AIT) totaling more than Tk750 crore.
The association,in a recent letter to the NBR chief, said cement companies are collectively being deprived of around Tk75 crore of annual interest income as their said chunk of paid adjustable AIT has remained unadjusted over the years.
Citing Section 146 of the Income Tax Ordinance, the BCMA said if paid taxes are higher than the payable figure, the taxpayer is entitled to get back the excess amount. If the refund takes time, the government will pay 7.5 percent interest on the retained amount.
But the cement companies have been getting no response despite the series of applications it has dispatched to the NBR on getting the money back in cash.
The cement industry letter, undersigned by its President Md Alamgir Kabir, has also mentioned that taxes are excessive burdens on the low-margin industry that pushed the cement companies into losses even before the outbreak of the pandemic.
Currently, the annual demand for cement is 33 million tonnes, while the industry's installed capacity is 78 million tonnes with another 11 million tonnes to be added in the next three years, said the BCMA.
That has led to intense competition and a price war amid an escalation in raw material costs and utility bills.
Many top cement companies – including Heidelberg Cement Bangladesh and MI Cement Factory – have already posted losses, mainly because of lower operating profits compared to higher nonadjustable– effectively 9 percent – taxes at source or in advance.