The Financial Express

Waiver from VAT on rubber products sought in view of low price

| Updated: September 11, 2021 12:51:24

Waiver from VAT on rubber products sought in view of low price

Bangladesh Rubber Board (BRB) sought withdrawal of 15 per cent VAT (Value Added Tax) on privately-owned rubber products as the sector had been grappling with lower prices.

It also requested the authorities concerned to increase duty on imports of synthetic rubber in a bid to protect the local producers.

Earlier, the private sector rubber producers requested the government to withdraw the imposed VAT on its rubber products at different meetings frequently.

In the meetings, private sector rubber producers mentioned that the imposed VAT is the main hindrance for the development of rubber cultivation.

Following repeated requests by the private sector rubber producers, BRB sought withdrawal of VAT on privately-owned rubber products.

The board sent the letter recently to the Ministry of Environment, Forest and Climate Change, for taking necessary steps in this regard. It also requested the government earlier in this regard.

Rubber farmers are facing a hard time due to lower market prices of their produces. The price of locally produced rubber keeps plummeting and shows a trend of fluctuating often as well, said industry insiders.

As a result, the private sector rubber producers incur losses financially, they added.

They have to spend around 24 per cent including 15 per cent VAT, and other taxes.

On the other hand, some factory owners are importing synthetic rubber sheets only at 5.0 per cent duty.

For this, the local producers have been losing interest to produce rubber, they said, adding the local produces are also losing competitiveness to the imported synthetic rubber items.

Vast tracts of leased hilly lands are becoming empty gradually and the possible risk of climate change is increasing, shrinking environment-friendly rubber cultivation, according to a source.

Earlier, Bangladesh Rubber Garden Owners Association (BRGOA) President Mohammad Kamal Uddin said, "We are facing losses due to continuous fall in prices of locally produced rubber. Besides, we are suffering more because of paying VAT."

He thinks that the government should provide subsidy facilities to the private sector rubber producers for the survival of the sector.

He, however, said rubber plantations had been established on around 10 million acres of land across the country under both the public and private arrangements.

In 2010, the price of rubber was Tk 300-350 per kg but it now has fallen to around Tk 140 per kg. Country started rubber cultivation during the 1980s.

There are 18 state-owned rubber plantation sites, including nine in Chattogram, four in Sylhet, five in Tangail and Mymensingh.

The country produces 17,000-20,000 tonnes of rubber annually.

Of the amount, around 10,000-12,000 tonnes of rubber are produced under private initiatives. Country's annual demand for the product is around 30,000 tonnes.

Earlier, BRGOA also requested the principal secretary and FBCCI president to take steps to withdraw VAT on rubber items.

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