BTMA demands lifting of duty from import of capital machinery, raw material

BTMA (Bangladesh Textile Mills Association) in its pre-budget proposal demanded withdrawal of the duty on import of capital machinery for domestic textile production and some raw materials in the 2008-09 fiscal.
Leaders and entrepreneurs in the textile sector will submit their written budget proposal to the chairman of the NBR (National Board of Revenue) on April 3 next, sources in the BTMA told The Daily Star on Wednesday.
The BTMA also demanded continuation of the tax holiday and extension of the reinvestment-from-profit facility up to 2015 to attract more investment in the textile sector creating more job opportunities.
The textile entrepreneurs urged the government to take measures to exempt the import of capital machinery by both export- oriented and domestic textile producing factory owners from duty for creating a level-playing field for both kinds of textile producers.
At present, only the export-oriented factory owners enjoy zero duty facility for importing capital machinery, the BTMA pointed out. As a result, some unscrupulous traders and importers dump fabrics in the local markets to have windfall profit from the Tk 20 crore domestic textile market, the proposal said.
In the proposal the textile entrepreneurs expressed their concern saying that the investors will not feel encouraged to run factories for producing textile for the local market on any continuation of the one-sided policy by the government in its next fiscal measures.
The BTMA said the textile industry was hit hard by the imposition of 10 percent duty and 15 percent VAT (Value Added Tax) on the import of some raw materials by the government in the national budget for the 2007-08 fiscal.
Some four to five specialised fabrics producing were forced to announce their closure due to higher competition on imposition of such taxes, the BTMA said, anticipating closure of at least two more factories.
The cost of importing fibre increased 27-85 percent due to such taxation, the BTMA said, pointing to the fact that previously there was no duty and VAT on import of such fibre.
The BTMA sources said they will also urge the government to continue the 10 percent incentives to exporters up to 2015, withdraw the land transfer fee for establishing factories and also withdraw duty from the import of spare parts, sizing materials and colour chemical.