The association has asked for the ad valorem VAT on yarn made of man-made fiber to be lowered
The Bangladesh Textile Mills Association (BTMA) has urged the government to consider reducing some taxes related to the textile industry in the proposed FY2020-21 budget.
In a press release on Saturday, the BTMA thanked the finance minister for reducing VAT on yarn from the existing Tk4 to Tk3 in the budget proposal.
However, a fixed Tk6 ad valorem VAT on yarn produced from man-made fiber has been proposed in the budget, which would not benefit the textile mills, observed the BTMA.
"Due to the dearth of export orders of yarn and buyer shortfall, the textile mills are suffering. We urge the Honorable Finance Minister to reconsider the proposal and impose Tk2 ad valorem VAT on all man-made fiber yarn," reads the press release.
In order to stop unethical trade and protect the fair interests of the domestic industry, the BTMA had proposed the tariff structure of some harmonised system coded fabrics be changed.
However, the budget did not reflect this. So, the organisation has urged the government to consider the matter seriously.
In the proposed budget, the finance minister has reduced the tax rate of non-listed companies from 35 percent to 32.5 percent, reducing it by 2.5 percent.
"This proposal is helpful, we think. However, a 0.5% withholding tax on export prices of all types of ready-made garments will be challenging for textiles and ready-made garments [manufacturers] to survive on the international market in the Covid-19 context," said the BTMA.
"We request the Honorable Finance Minister to fix the rate of withholding tax at the previous rate of 0.25 percent," it added.
The BTMA praised the finance minister for providing a tax holiday facility in the budget to encourage establishing a man-made fiber manufacturing industry.
"It will increase investment. Also positive is the proposal to automate bonded warehouse management with a view to accelerating the manufacturing activities of the export oriented industry. This will help reduce the cost of business," said the BTMA.