Lift VAT on crockery, plastic toys
Plastic goods makers and exporters have demanded withdrawal of value-added tax (VAT) on crockery and plastic toys in the national budget for 2021-22 fiscal year.
It was proposed in the new budget that the corporate tax on plastics sector will be reduced by 2.5 percentage points to 30 per cent, but plastic goods makers want it to fix at 10 per cent.
These were two of the 15 demands that Shamim Ahmed, president of Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), placed yesterday at a press conference at the association's office in the city's Paltan area.
"We want the government to reduce the existing tariff rate from 10 per cent to 5 per cent on filler master batch and color master batch," he said.
The association also suggested the government cut the tariff rate of aluminum bottom foil and aluminum bister foil from 5 per cent to 1 per cent.
Since domestic toys are of very high quality and an alternative to imports, BPGMEA urged the government to reconsider the proposal to increase the tariff on imported toys.
A lot of factories in the plastics sector got closed and listed as sick industries since the beginning of the Covid-19 pandemic, Ahmed said.
Thousands of employees and officials have become unemployed from the labour intensive industry and the owners of the factories are now struggling to repay loans.
Even many export-oriented companies are being listed as sick industries, he said.
In this context, the 3 per cent advance tax imposed on the plastics industry in the proposed budget for FY22 will only create pressure on the local players, Ahmed said.
He urged the government to reduce the tax rate from the proposed 4 per cent to 3 per cent and fix the upper limit of turnover at Tk 5 crore, up from proposed Tk 1.5 crore.
At present, about Tk 35,000 crore worth of plastic products are being produced and marketed in the domestic market every year and the sector contributes about Tk 3,500 crore to the national exchequer every year.
According to the BPGMEA, about $1 billion worth of plastic goods are exported every year through direct and indirect sources.
The plastics sector has already provided employment to over 12 lakh people and the average growth rate of this sector is more than 20 per cent.
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