Buyers boycott tea auction for second week

Buyers boycotted the weekly tea auction in Chittagong for a second time yesterday, protesting new advance income taxes imposed by the government.
The stalemate in the auction lingered, as the buyers did not get any assurance from the government of reversing the new tax plan, tea traders said.
The government has recently imposed 5 percent income tax in addition to the existing 15 percent value-added tax and 2 percent sales tax.
The traditional auction, the lone way for sales of tea produced in 163 tea gardens across the country, started around 8.30am yesterday only to close half an hour later, as no buyer took part in the auction.
Leaders of Tea Traders Association of Bangladesh in a meeting on Monday decided not to take part in the 15th auction if the newly imposed tax is not cancelled.
The wholesale traders of Khatunganj said the stalemate has not yet impacted the market but might have a negative impact on supply if the crisis is not resolved before the next auction.
Nobi Hossain, deputy director (trade) of Bangladesh Tea Board, said a total of 28,000 sacks of tea each weighing 55 kilograms were put up for auction yesterday.
All the six registered brokers were present at the auction centre in the city's Agrabad area but the number of buyers was small.
More than 30 lakh kilograms of tea remained unsold as two scheduled auctions ended without sales.
Tea producers and buyers expressed concerns over the situation.
Safwan Chowdhury, chairman of Bangladesh Tea Association, the organisation of tea-garden owners, said tea producers are worried about the fate of their business.
“We are not allowed to sell tea directly from our factories to buyers,” he said adding that the registered buyers could buy tea only through auction.
Leaders of both Bangladesh Tea Association and Tea Traders Association of Bangladesh met separately with the chairman of National Board of Revenue and NBR Member (income tax policy) to discuss the matter to come to a solution.
The traders informed the two NBR officials that they would incur huge losses if they paid the advance income tax in addition to the existing 17 percent tax.
Jayatu Chowdhury, a small wholesaler in Khatunganj, said traders' old stock of tea is coming to an end since they could not buy any at the last two auctions.
Opposing the imposition of the tax, Jayatu said the new tax would increase the costs of tea, making it difficult for them to sell the commodity to retailers.