Lift VAT on footwear below Tk 150

The government's decision to impose a 15 per cent VAT on plastic and rubber flip-flops and other footwear priced below Tk 150 has sparked protests from small and medium plastic footwear manufacturers as well as consumers from lower-income groups.

Previously, these products were exempt from VAT, making them affordable for economically disadvantaged groups.

At a press conference at the Dhaka Reporters Unity on Saturday, the Bangladesh Paduka Prostutkarak Samity (footwear manufacturers association) demanded the reinstatement of the VAT exemption on all footwear priced below Tk 150.

Secretary of the Samity Abdul Quddus Rana stated that approximately 500 small-scale companies manufacture footwear priced below Tk 150. Local manufacturers meet almost 100 per cent of the domestic demand, he said.

"These companies cater primarily to the lower and lower-middle-class segments of society. The imposition of VAT will severely impact these businesses, many of which recycle used footwear to produce affordable products," he said.

Sakhawat Hossain Belal, an adviser to the association, slammed the government for imposing 15 per cent VAT, saying it is unreasonable. He warned that such a measure would push these affordable products beyond the purchasing power of the general public, particularly labourers, farmers, rickshaw-pullers, and wage earners.

Belal also cautioned about potential public health risks if marginalised groups are forced to forgo footwear altogether.

Vice President Ashraf Uddin highlighted the environmental benefits of this sector, which relies on discarded rubber and plastic as raw materials.

"This recycling process contributes to environmental balance, improves soil fertility, and prevents water-logging. VAT imposition will hinder this activity, negatively impacting both the environment and the industry," he says.

The press conference also addressed the challenges of prolonged inflation, which has already led to a 30-40 per cent decline in footwear sales.

The manufacturers warned that increased production costs due to VAT would exacerbate the situation, leading to factory closures, unemployment, and loss of income for many hawkers.

Senior Vice President Rezaul Karim, Joint Secretary Shahjahan Rahman Saju, and other leaders of the association along with owners, officers, and employees of various footwear companies were present at the event.

Prior to the press conference, workers and employees from the sector formed a human chain in front of the Dhaka Reporters Unity. They urged the government to immediately reverse the VAT decision. "If our demands are not met, we will escalate our protests and eventually shut down factories," they warned.

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