Stress on tax reforms to boost investment in cement sector

Jannatul Islam

19th May, 2021 10:23:10 PM printer

Stress on tax reforms to boost investment in cement sector

The government should reform the tax structure to boost investment in the cement sector as local manufacturers are burdened with taxes.

Some 37 companies including 5 foreign manufacturers are producing nine million tonnes of cement in Bangladesh against the annual domestic demand for 4 million tonnes, according to Bangladesh Cement Manufacturers Association (BCMA).

The cement manufacturers are now paying Tk 500 for importing each tonne of clinker, the main raw material for cement. Besides, 5 per cent customs duty and 3 per cent advance income tax put a huge burden on businesses to make new investments, BCMA leaders have said.

“Around 95 per cent raw materials are imported. Only one foreign company manufactures clinker for its own use. The government should consider lowering the clinker import duty to Tk 250 from existing Tk 500 per tonne,” Md Shahidullah, first vice president at BCMA, told the Daily Sun.

Ahead of the national budget, the trade body also called upon the government to reduce the import duty and tax on raw materials imports.

The trade body leader also informed that they have already submitted their proposal to the National Board of Revenue (NBR). The cement manufacturers also demanded to withdraw the existing 3 per cent advance income tax (AIT) and 3 per cent supply duty on the cement sector.

Shahidullah, also the managing director at MetroCem, said the advanced income tax has created a negative impact on the sector and the trade body has demanded the government withdraw the tax.

Bashundhara Group has been leading the country’s cement market with two established brands—Bashundhara Cement and King Brand Cement.

Bashundhara Group cement sector’s chief marketing officer Khandaker Kingshuk Hossain said the government should withdraw the advance income tax for the sake of the development of the cement sector.

“Bashundhara Cement has been contributing to national infrastructure development as the product is being used in many large projects in the country. Besides, the brand also gained trust from local and foreign companies. In brief, we can say that Bashundhara Cement holds a strong position in the market,” Khandaker Kingshuk Hossain said.

Bashundhara Group entered the cement business in 1992 by introducing Meghna Cement. The company produces portland composite cement and ordinary portland cement under the King Brand portfolio. Besides, the Bashundhara Cement also has a strong market presence.