The SME Foundation has sought duty support in the upcoming national budget for small and medium enterprises.

The foundation, which is the apex institution for SME development in the country, has placed 43 duty and tax related proposals to the National Board of Revenue (NBR).

A level playing field should be built and some protectionist measures should be taken to help the SME sector flourish, said Md Safiqul Islam, managing director of SME Foundation.

He spoke at a discussion in Dhaka yesterday, which was organised by the foundation to shed light on its budget proposals.

Md Shahabuddin, a former member of the NBR and a consultant to the foundation, presented the proposals at the meeting.

The SME Foundation has also urged the tax administrator to impose a unified duty structure on import of raw materials of all the sectors.

For primary raw materials, the foundation suggested the NBR impose 3 percent import duty and raise the rate to 5 percent for that available in Bangladesh.

It also wanted to see a 10 percent duty on intermediary raw materials and for fixing the rate at 15 percent for that currently produced in the country.

It also demanded the VAT-free turnover ceiling for the SMEs to be raised to Tk 36 lakh from the existing Tk 24 lakh and the tax-free turnover limit to Tk 1.5 crore, up from the existing Tk 80 lakh. The foundation also urged the NBR to exempt production and trading of handicrafts from all kinds of taxes. The SME entrepreneurs always have to struggle to get bank loans, because of which they prefer taking personal loans at high interest rates, said AFM Fakhrul Islam Munshi, president of Bangladesh Agro-Processors' Association. “That's why the government should establish a bank especially for the SME sector.”

“There is very low import duty on products which we also manufacturer in Bangladesh. Businesses can also import the same kind of products we manufacture here in Bangladesh by paying a very low import duty,” said Ashraf Ibn Noor, managing director of R Industries, an automobile filters and engineering product manufacturer.

“That is why it is getting tough for us to compete with the imported goods. The tax officials treat us such a way that we have committed a crime by being an entrepreneur in the country,” he said.

The foundation is working to ensure that the SMEs get duty benefits and are provided with low-cost funds, as the sector is very important for employment generation, Islam said.

Around 78.13 lakh out of the 78.18 enterprises of the country belong to the cottage and small and medium enterprises category, according to data from the Bangladesh Bureau of Statistics.

These cottage and SMEs have generated 2.10 crore jobs out of the 2.45 crore created by all kinds of enterprises in the country.

Local SMEs now produce different kinds of products, including plastic goods, handicrafts, agro products, light engineering, leather goods, handloom and specialised textiles.