The Bangladesh Textile Mills Association (BTMA) on Wednesday urged the government to exempt local yarn from a 5 percent value added tax (VAT) that imposed in the proposed budget to make the domestic yarn market more competitive
BTMA President Mohammad Ali Khokon made the appeal while addressing a press conference at a local hotel in the city expressing his grave concern over the budget proposal for fiscal 2019-20.BTMA president said that yarn makers who are catering to the local markets will have to face Tk 24 as VAT on sale of a kilogram (kg) of yarn in the local market.
Owing to this, the yarn users will not feel encouraged to purchase local variety of yarn. As a result, the local yarn market will be dominated by foreign yarn, he said.
Mohammad Ali Khokon also said that the move will result in closing down many of the local yarn mills and would become import-oriented market. The price of Lungi and Sharees will also go up in the domestic markets putting the consumers under pressure.
The BTMA also urged the government to withdraw a 5 percent Advance Tax (AT) on the import of textile machinery, spare parts, and other elements as it would increase the cost of doing business.
Khokon also demanded the government for continuing source tax at 0.25 percent on export receipts as the facility of source at tax will be removed at the end of this month.
The president also claimed that polyester, viscose and tensile which are the most important raw materials for this industry are getting tax free import over the last five years. They are not taxable items as per the rules. In spite of this, customs department has been deducting a 5 per cent advanced tax which is not justified.