Jute sector unhappy over hike on tax at source

16 Jun '11

2 min read

Jute spinners in Bangladesh apprehend that the budget proposal to hike the tax at source on exports from the present 0.40 percent to 1.50 percent for the 2011-12 fiscal would severely affect the industry's growth.

In the budgetary proposal, the Finance Minister withdrew the tax break facility that was available to the jute, textiles, apparels and other industries. He also proposed a levy of 1.50 percent tax deductible at source from all export proceeds.

The jute sector has demanded that the Government should rollback the tax imposed on export earnings so as to boost exports and to speed up industrialization. It has asked the Government to extend the tax-break facility in order to enable the industry to continue with its production activities in spite of power and gas outages.

The sector has called upon the Government to modify the budgetary proposal and not to atleast impose tax at source on jute spinning, as it accounts for about 65 percent of the jute sector's overall exports.

The jute sector, however, lauded the Government's assurance in the proposed budget to make provision for adequate power, gas and infrastructural facilities.

The sector recommended that the Government should take steps to strengthen the private jute mills, as it is necessary for the development of industries in the country.

During the 2009-10 fiscal, the jute sector generated revenues worth Tk 25.48 billion from exports of 380,000 tons of jute yarn, while this year jute yarn exports has touched Tk 30 billion in the initial 10 months of current fiscal year ending June 30.

Fibre2fashion News Desk - India

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