Jute millers have urged the government to withdraw the source tax on export proceeds next fiscal year, according to a budget proposal of the Bangladesh Jute Mills Association (BJMA).
The trade body, representing private millers, said an anti-dumping duty slapped by India in 2017 and falling demand in other markets has caused a slump in export receipts, putting the jute industry in trouble.
So, the 0.60 percent source tax on export earnings should be waived, said the proposal submitted to the National Board of Revenue (NBR) in the middle of this month.
Jute goods exporters have been paying 0.60 percent withholding tax on export proceeds since July 1, 2016. The existing rate will expire on June 30 this year.
Jute and jute goods exports dipped 25 percent year-on-year to $498.66 million in the July-January period of the current fiscal year of 2018-19, according to Export Promotion Bureau data. The BJMA demanded formation of a Tk 10,000 crore low-cost fund for the development of the jute industry in which 4 crore people, including farmers and workers, were directly and indirectly involved.
Farmers, mainly in Dhaka, Khulna, Rajshahi and Rangpur divisions, grow jute and harvest 15 lakh tonnes of it annually. Mills consume 10 lakh tonnes of the natural fibre to make yarn and twine, sacks and bags to mainly cater to international markets.
Some 2.5 lakh tonnes of raw jute are exported and the rest is used by growers, the Bangladesh Jute Spinners Association estimated.