Kazi Zahidul Hasan :Leather and leather goods exporters have demanded of the government for a series of fiscal measures, including tax exemption at source, cash incentive on crushed and finished leather export and rate cut on loans for the leather sector, in a bid to bolster falling exports, industry insiders said.They said that their exports were facing multiple challenges that included the Eurozone crisis, free fall in the value of Euro, high cost of credit to the leather industries and compliance issues. “We have made the above mentioned recommendations during the pre-budget consultations with the ministry concerned. But our wish list did not reflect in the proposed budget,” MA Rashid Bhuiyan, a former chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association (BFLLFEA) told The New Nation on Saturday.He added that if these points were included in the proposed budget, they would help making the industry competitive at a time when leather exports continued to fall mainly due to shrinking global demands.According to an official figure, Bangladesh earned US$369.02 million from leather export in the first 11 months (July-May) ofthe fiscal 2014-15, showing a 21.26 per cent decrease from a year earlier.The income also fell short of 34.53 per cent against the export target of US$563.69 million set for the period.Rashid Bhuiyan mentioned that the leather industry is passing through a critical time in the backdrop of falling exports, rising cost of production and accumulating losses from political turmoil of January-March of this year.He said that leather exporters have suffered a loss of Tk1000 crore in that period due to delay in shipments and cancellation of export orders. Above all, the tannery owners are also bearing the financial burden for relocating their factories from the city’s Hazaribagh to Savar. “We need to invest around Tk 5000 crore to finish the task successfully and smoothly,” noted the former BFLLFEA chairman.He further said that when the sector is facing multifarious challenges, the government has made fresh proposal to hike tax at source on leather exports to 1.0 per cent from 0.6 per cent in the proposed budget for fiscal 2015-16. Opposing the government’s tax hike proposal, Rashid Bhuiyan said that if the proposed hike is implementation, it will have huge negative impact on the industry, plunging it to further challenge. “We are not in a position to pay the enhanced rate of tax at source. So, we urged the government to exempt the tax at source on exports to recover our losses,” he said, adding, “If it cannot be fully exempted, the government should continue the present level of source tax”. Rashid Bhuiyan also the Managing Director of Dhaka Hide and Skins, a top-ranking hides processing factory of the country said the leather industry is a highly potential export sector that adds about 80 to 85 per cent value.
