Staff Reporter :
Bangladesh Textile Mills Association (BTMA) has urged the government to review its decision of imposing a five per cent VAT on sale of local yarn to protect interest of domestic yarn producers.
In the proposed budget (for 2019-20), the government offered VAT exemption for export-oriented yarn producers, but imposed a five per cent VAT on sale of yarn for local markets.
BTMA said, if the proposed VAT is implemented, the local yarn makers will have to pay Tk 24 as VAT on sale of per kilogram (kg) yarn in the local market. This will make their produce costly causing a severe adverse impact on local textile sector.
It may also pave the way of unabated entry of foreign yarn, it added.
“In such situation, no weavers or fabric millers will be interested in buying local yarn with increased price. Rather, they will be interested in buying foreign yarn at a lower rate,” BTMA President Mohammad Ali Khokon said this at a press conference on the proposed budget in Dhaka on Wednesday.
He said: This would result in closing down the local yarn mills.
“Considering the fact, the government should exempt five per cent VAT on sale of local yarn by the domestic yarn manufacturers,” added Khokon
The BTMA chief also urged the government to withdraw the five per cent Advance Tax on import of textile machineries, spare parts and other equipments to help maintain edge of local textile industry.
Mohammad Ali Khokon demanded to the government for continuing 0.25 per cent tax at source on their export receipts, as the facility is set to be abolished by the end of this month.
“The ongoing trade war between the US and China has created a big opportunity for local textiles exporters. The government needs to give us an export incentive for the US markets so that we can exploit the opportunity,” Mohammad Ali Khokon said.
Bangladesh Textile Mills Association (BTMA) has urged the government to review its decision of imposing a five per cent VAT on sale of local yarn to protect interest of domestic yarn producers.
In the proposed budget (for 2019-20), the government offered VAT exemption for export-oriented yarn producers, but imposed a five per cent VAT on sale of yarn for local markets.
BTMA said, if the proposed VAT is implemented, the local yarn makers will have to pay Tk 24 as VAT on sale of per kilogram (kg) yarn in the local market. This will make their produce costly causing a severe adverse impact on local textile sector.
It may also pave the way of unabated entry of foreign yarn, it added.
“In such situation, no weavers or fabric millers will be interested in buying local yarn with increased price. Rather, they will be interested in buying foreign yarn at a lower rate,” BTMA President Mohammad Ali Khokon said this at a press conference on the proposed budget in Dhaka on Wednesday.
He said: This would result in closing down the local yarn mills.
“Considering the fact, the government should exempt five per cent VAT on sale of local yarn by the domestic yarn manufacturers,” added Khokon
The BTMA chief also urged the government to withdraw the five per cent Advance Tax on import of textile machineries, spare parts and other equipments to help maintain edge of local textile industry.
Mohammad Ali Khokon demanded to the government for continuing 0.25 per cent tax at source on their export receipts, as the facility is set to be abolished by the end of this month.
“The ongoing trade war between the US and China has created a big opportunity for local textiles exporters. The government needs to give us an export incentive for the US markets so that we can exploit the opportunity,” Mohammad Ali Khokon said.
