The country’s paper mill owners on Wednesday urged the government to provide policy supports in the upcoming budget to protect the local paper industry from the uneven competition posed by the misuse of the bonded warehouse facility.
They also demanded to keep the writing paper at the lowest VAT slab in the new VAT law which will come into effect in FY 2019-20.Bangladesh Paper Mills Association (BPMA) leaders made the demand at a pre-budget meeting with the National Board of Revenue (NBR) at the NBR head office in the city.
BPMA Business Development and export-related standing committee chairman Mostafizur Rahman said, “Paper is basically used as educational material. If the government doesn’t provide such facility, it would affect around four crore students across the country.”
While the government is committed to ensuring education for all, it is necessary to reduce the cost of education materials, such as locally produces exercise books, he said, adding that all types of educational materials are excluded from VAT in neighbouring countries.
Mostafizur Rahman also urged the government for taking strict measures in the next budget to prevent the misuse of bonded warehouse facilities.
“Many importers are misusing the bond facilities through false declaration—- they import white papers in the name of brown papers,” he added.
BPMA vice-president Mohammed Younus said some 106 paper mills are currently operating in the country and they have the capacity to meet the local demand. “Moreover, more than 30 mills are also exporting papers to various countries.”The local paper industry has the capacity to produce 15 lakh tonnes of paper against the local demand of around 10 lakh tonnes. The paper-based industries in the country are employing some 60 lakh people, he added.
“Misuse of bond facilities has become a major challenger for country’s paper industry, said Mohammed Younus,” also the managing director of Younus Group of Industries.
He alleged that many companies are involved in tax dodging through the misuse of bond facilities in paper import.
The BPMA leaders also sought duty waiver on the import of some raw materials for the paper industry.
They urged the government to impose supplementary duty on the import of pulps, adding that many firms import pulps under the duty-free facility and illegally sell those to local factories, depriving the government of huge revenue.
NBR Chairman Md Mosharraf Hossain Bhuiyan said they have issues necessary directives to the authorities concerned to take necessary measures to protect the local paper industry and prevent bond misuse.
“Some dishonest businessmen are illegally selling the duty-free raw materials in the local market. It is very difficult to conduct drives at the market level but NBR officials are continuing their drives to prevent such unfair practice before the products enter the market,” said the NBR chairman.
“Paper will be kept at the lowest slab of VAT rate in the tariff value product section,” he assured.
He also assured of looking at the customs duty structure to help protect the local industry.
“We also want to reduce import dependency through the increasing capacity of the local industries. If the local industries work well, NBR will definitely protect their interests,” said the NBR chairman.
Bangladesh Hygiene Products Manufacturing Association convener Md Mustafizur Rahman said some dishonest businessmen are importing baby diapers through false declaration to dodge tax. Such tax dodging gives them the advantage over the local manufacturers who are paying higher tax, he noted.
He also proposed to reduce the supplementary duty on the raw materials or chemicals of baby diapers, sanitary napkin or chemical products to 5 per cent from exciting 25 per cent.