At a post budget press conference in Dhaka the BCIMA leaders urged the government to create a uniform duty structure and stop warehouse manipulation to save the potential foreign exchange earning sector.

They said the sector requires nearly 150 types of chemicals, imported entirely, for processing leather.

Import of these chemicals cost US $ 57.56 million, which is about twenty percent of the amount fetched from leather export, in the 2004-05 fiscal. The sector earned $ 287.79 million during the same period.

Presently there are 194 tanneries in the country, of which 11 units have been enjoying bonded warehouse facility.

The association had to pay the same duty applicable for tanneries for importing leather chemicals before the budget placed for the 2005-06 fiscal. The chemical importers were used to supply the required chemicals to some tanneries that did not bother to import the item.

Narrating the discriminatory duty structure among segments of the leather sector, Mazakat Harun Manik, secretary general of the BCIMA, said from the FY 2005-06 the government introduced a flat five percent duty on chemical import for 105 tanneries.

Only the tanneries that have membership of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association were entitled to the flat rate duty facilities by that budget.

But the rest of the tanneries as well as the chemical importers have to import the chemicals on a higher rate ranging between 52 and 32 percent that created discrimination in the three-tier duty structure.

"For the discriminatory duty structure, the production cost of the deprived industries is higher than others who enjoy the flat duty structure. This leads to ruination of these industries", Mizanur Rahman Mezbah, president of the BCIMA told the news conference.

In the past chemical importers were used to supply chemicals to most of the tanneries as these semi size tanneries do not have a capital support to import chemicals from abroad.

"But now we cannot import chemicals under the illogical higher duty structure that is affecting the small and semi size tanneries," he further said.

The association complained that taking the situation to their advantage, a certain quarter of the leather businessmen are misusing the bonded warehouse facility that to also causing revenue loss to the government.

Sources said the NBR lost nearly Tk 100 crore last year for the discriminatory tariff policy.