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a year ago

Cement manufacturers demand reduction of ‘clinker’ import duty

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Bangladesh Cement Manufacturers Association (BCMA) has urged the government to reduce the customs duty on ‘clinker’, the main raw material of the cement industry.

They also urged the government to reduce the advanced income tax (AIT) to a maximum of 0.50 per cent at the import and sale stage.

Currently, cement producers have to pay a duty of Tk 500 per tonne on the import of clinker. In the proposed budget for the next fiscal year, the government proposed to increase the duty to Tk 700.

Addressing a press conference at a city hotel on Monday, BCMA President Md Alamgir Kabir said they have been demanding for reduction of the customs duty from Tk 500 per tonne to Tk 200 per tonne for a long time.

“But in the current budget, instead of reducing customs duty, the government has proposed to increase the duty from Tk 500 to Tk 700 per tonne, which is very disappointing,” said Md Alamgir Kabir.

The cement industry was already under stress due to the Covid-19 pandemic, the logistics problems stemming from the Russia-Ukraine war, and the increase in shipping fares for transporting goods.

He said, “Additional duty is a blow for the sector which is already reeling from a high tax burden, energy crisis, increase in transport fares, and dollar shortage.”

Customs duty on key raw materials of an industry is usually around 5 per cent of the import value, said Mr Kabir, who is also the chairman of Crown Cement. 

“But the customs duty on ‘Clinker’ stands at around 12 per cent to 13 per cent of the import value because of the recent budget announcement on “Clinker” levying a customs duty of Tk 700 per metric tonne”.

“Thus, 12 per cent to 13 per cent customs duty on the import value of key raw materials is considered disproportionate to the cement industry owners and its detrimental effect may put additional pressure on the consumer-general in the cement market and may lead to a slowdown in overall construction activity,” he said.

“We have been demanding for a long time that at the import stage, primarily advanced income tax can be levied at a maximum of 0.50 per cent, but it would not be appropriate to consider it as a final settlement. Therefore, we have been applying to open up the opportunity to adjust the AIT,” said Mr Kabir.

Cement manufacturers have been demanding for a long time that a maximum of 0.50 per cent may be levied at the primary level of the sale stage, but it would not be appropriate to consider it as a final settlement.

“We are requesting to have the opportunity to adjust AIT. Also, since cement manufacturers have already paid AIT on raw materials at the import stage, paying AIT at the sale stage is equivalent to double taxation,” Kabir pointed out.

The dollar crisis is making it more difficult to import raw materials, leading to import costs higher while the ongoing energy crisis and gas shortage enhanced their production costs higher.

Considering the current situation, he urged the government to treat the cement sector as a “priority sector”.

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