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Withdraw advance tax on textile machinery import: BTMA

Jun '19
Withdraw advance tax on textile machinery import: BTMA
The Bangladesh Textile Mills Association (BTMA) recently urged the government to withdraw 5 per cent advance tax on import of textile machinery, spare parts and some raw materials like polyester, tencel fibre and viscose proposed in the 2019-2020 budget, saying the move would discourage investment in the sector and halt expansion of textile mills in the country.

Import of textile machinery is subject to only 1 per cent customs duty now.

The budget also proposed another 5 per cent value added tax (VAT) on manufacturing of yarn.

Local yarn manufacturers were facing trouble due to illegal import of yarn through wrong declaration, while the fresh imposition of VAT would increase the prices of yarn further, according to BTMA. As a result, fabrics manufacturers would not be interested to buy local yarn, said BTMA president Mohammad Ali Khokon.

If the government implements the proposed 5 per cent VAT on yarn, a manufacturer has to pay an additional amount between Tk 9.40 and Tk 23.50 for each kilogram of yarn. Currently, the manufacturers are paying Tk 3 per kg of yarn as VAT.

Hence, BTMA requested the government to keep the yarn out of VAT net or set the VAT amount at Tk 4 per kg yarn, said Khokon.

The association also urged the government to keep tax at source at 0.25 per cent unchanged for the next fiscal as the existing rate expires on June 31. (DS)

Fibre2Fashion News Desk – India

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