Staff Reporter :
The leaders of the Bangladesh Tannery Association (BTA) and Leather Goods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) on Tuesday demanded RMG-like facilities to boost the potential exporting sector.
They also emphasised the need for simplification of existing customs laws, providing the leather sector with income tax rates similar to the apparel sector.
They also proposed for duty exemption on imported capital machineries and chemicals, reduction of source tax to 3 per cent from the existing 10 per cent on cash incentive and tax exemption on remittance transaction for hiring design to revive the industry.
The BTA President Shahin Ahmed placed the proposals in a pre-budget discussion with the National Board of Revenue (NBR) at the conference room of the revenue board in the city.
NBR Chairman Abu Hena Md Rahmatul Muneem presided over the discussion while it Member (Customs policy) Masud Sadik and Member (Tax Policy) Shams Uddin Ahmed, among others, were present.
Speaking at the discussion, NBR chairman, “We are working for online based automated bonded warehouse system for stopping misuse of the duty-free facility.”
“If we are able to stop the misuse, bonded warehouse facility to be expanded further,” the NBR chief said.
He also urged the leather manufacturers to be more competitive by reducing production cost as many duty facilities will be withdrawn after the country’s LDC graduation.
“As an export potential sector, all logical demands to be considered in the upcoming national budget in line with boosting the leather industry,” he assured.
Bangladesh’s leather and leather goods market size is estimated at around $3.0 billion and growing at a CAGR of 5.0 per cent.
Besides, the footwear market in the country is growing at the rate of 10 to 15 per cent annually.
To shift the country’s economy to a higher growth trajectory and sustain high economic growth, the manufacturing and export bases need to be diversified.
Leather is one of the industries with considerable potential for development, using Bangladesh’s large supply of low-cost labor and raw material.
The industry has the potential to participate in global value chains, enter a new market, and serve the growing domestic demand.
Meanwhile, the country’s stock exchanges – Dhaka Stock Exchnage and Chittagong Stock Exchange – and the Bangladesh Merchant Bankers Association (BMBA) sought an increased gap in corporate tax between listed and non-listed companies in the upcoming national budget to attract good companies to the bourses.
The BMBA said the reduction of corporate tax to 15 per cent for listed companies will encourage many more companies to go public, and the government’s revenue income will also be enhanced.
As per existing rules, listed companies, other than banks, insurers, financial institutions, tobacco companies, and telecom operators, pay corporate tax at a rate of 22.5 per cent, compared to 30 per cent for non-listed companies.
