Poultry breeders, feed millers demand tax breaks

Poultry industry operators, including breeders and feed millers, yesterday urged the government for a 10-year tax break to facilitate their recovery from Covid-induced losses.

In a separate proposal, agro-processors demanded a similar tax treatment for poultry and fish feed makers.

The Breeders Association of Bangladesh (BAB), Feed Industries Association of Bangladesh (FIAB) and Bangladesh Agro-Processors Association (BAPA) placed these recommendations for the fiscal 2021-22 budget to the National Board of Revenue (NBR).

"We need the tax break so that existing operators can sustain themselves and new entrepreneurs can come to the poultry industry, said BAB President Md Rakibur Rahman.

"We also aim to begin export by 2025," he added.

Breeders suffered losses of around Tk 2,900 crore after farming nosedived in the wake of slumping demand for chicken amid coronavirus concerns after the outbreak began in March 2020.

As the demand for restocking fell, breeders had to sell day-old chicken (DOC) for Tk 2-5 each against production costs of Tk 35-40 each.

The fall in prices continued until May as many farmers were even unwilling to get DOCs for free.

As many breeders even had to destroy their livestock due to an acute shortage of buyers, the BAB said in its appeal for a tax exemption until 2030.

People engaged in poultry farming enjoy reduced tax benefits.

As per NBR guidelines, no tax is applicable for incomes of up to Tk 20 lakh.

About 10 per cent tax is payable on incomes of over Tk 30 lakh from poultry farming whereas the highest rate of tax for an individual is 25 per cent.

Weekly production of broiler DOCs, which was 1.70 crore before the pandemic, now stands at 1.35 crore.

Overall the poultry industry incurred nearly Tk 7,000 crore in losses, it added.

The BAB also demanded tax-free imports of certain machinery used by the poultry industry as well as exemption of tariff and tax on imports of feed making materials.

FIAB said feed production dropped because of reduced farming.

Citing the spiralling prices of feed making materials worldwide as well as increased container and freight charge, feed millers called for a 10-year tax holiday.

FIAB sought a reduction of advance income tax on the import of these materials from 5 per cent.

It also wanted a withdrawal of tax at source on the purchase of feed ingredients from the domestic market.

Similarly, BAPA recommended the elimination of 2 per cent tax at source on procurement of agricultural products.

It also pleaded for the removal of advance income tax on raw materials used by agro-processing factories.