The Financial Express

Leather sector seeks tax cuts

| Updated: April 07, 2021 08:45:45

Leather sector seeks tax cuts

The Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) sought reduction of corporate income tax and source tax on export to stay competitive in global market.

The LFMEAB leaders said corporate income tax rate for the sector should be consistent with other export-oriented sectors.

In pre-budget proposals for the upcoming fiscal year (FY), 2021-22, the association leaders also sought fiscal aid for green industries along with other fiscal supports to stay competitive in international market amid the Covid-19 pandemic fallout.

Representatives from a number of associations, including those of leather, agriculture, cold storage, and bakery sectors, placed their respective pre-budget proposals to the National Board of Revenue (NBR) on Sunday.

NBR Chairman Abu Hena Md Rahmatul Muneem presided over the meeting at its conference room.

In the meeting, the leather sector representatives sought reduction of the source tax on export earnings to 0.25 per cent from current 0.50 per cent to offset their Covid-induced export loss.

They also proposed to reinstate the source tax on export subsidy to 3.0 per cent from the existing 10 per cent, imposed in the last budget.

The leather association leaders also requested the NBR to increase the tenure of renewal of bond licence to three years from the current two years, as the licence renewal process was a complex one.

The Bangladesh Tanners Association (BTA) sought tax benefit on import of chemicals, needed for processing raw hides.

Currently, customs duty (CD) and value-added tax (VAT) on import of chemicals is 5.0 per cent and 15 per cent respectively.

The BTA proposed to bring those down to 3.0 per cent and 7.5 per cent respectively to facilitate the non-bonded tanners.

The association also sought permission to import industrial salt during peak season, as they needed a large amount of salt to preserve raw hides.

Agricultural sectors stakeholders demanded withdrawal of the source tax on procurement of agro products and reduction of corporate tax.

In its budget proposals, the Bangladesh Agro-Processors Association (BAPA) demanded withdrawal of 2.0 per cent income tax at source on procurement of agricultural products from farmers.

They also urged to waive advance income tax on import of raw materials and VAT on several agro products.

The association leaders also demanded reduction of corporate tax for agro-processors like other agriculture-based sectors, including producers of poultry feed, fish feed, dairy and dairy products.

The Bangladesh Cold Storage Association (BCSA) sought continuation of VAT exemption for cold storage service in the next budget to support farmers preserve their agricultural products.

The BCSA demanded downward revision of corporate income tax for the sector to 10 per cent from the existing 35 per cent, as almost all of the industries in agriculture sector enjoyed reduced tax rate.

They proposed to allow them enjoy 20 per cent rebate on electricity bill in line with the facility given to other cold storages under the Bangladesh Agricultural Development Corporation (BADC).

The Bangladesh Bread, Biscuit and Bakery Manufacturers Association requested the revenue board to waive VAT on bread and biscuit valued below Tk 150 a kg as well as cake valued below Tk 100 a kg produced at manual bakeries.

They said small-scale bakeries were struggling to survive, while many faced closure, as prices of raw materials had increased substantially due to the pandemic.

The Bangladesh Paint Manufacturers Association (BPMA) sought waiver of 5.0 per cent supplementary duty (SD) at local production stage, and demanded considering paint as an essential product instead of luxury item.

The BPMA also sought withdrawal of 0.5 per cent tax on promotional expense above the permissible limit.

[email protected]

Share if you like