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BTMA demands rationalization of duty on yarn, machinery |
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March
14, 2000 The Bangladesh Textile Mills Association (BTMA) has proposed rationalization of the duty structures on capital machinery and yarn. BTMA, the apex body of the country's private sector textile mills, made the suggestions in its budget proposal for FY2001, which it sent to the National Board of Revenue (NBR). The association proposals include increase of import duty on yarn, withdrawal of duty and taxes from machinery and spare parts used in textile industries and continuation of cash incentive for the export-oriented textile and garments units till 2005. BTMA said that the spinning sub-sector was facing problems as the government gradually decrease duty on imported yarn and fixed it at 5 per cent in the last budget. "Even when the import duty on yarn was 30 per cent, the spinning sub-sector had to struggle to remain in competition with the imported item," the association said. The local spinning mills have to pay 15-20 per cent higher for raw cotton that their global competitors, as the raw material has to be imported. This pitches the local products in a disadvantageous position against imported yarn. To ensure a level-playing field for the local spinning mill, BTMA proposed a 10 per cent duty hike on imported yarn for another five years. The association said that the duty hike wouldn't have any negative impact on RMG export as yarn for the export-oriented under the bonded warehouse facility. It also hoped that the duty hike measure would encourage investment in the sector. BTMA further mentioned that although India is a raw cotton and textile machinery producing country, it ahs imposed 45 per cent duty on yarn. The association called for continuation of 25 per cent cash incentive till 2005 for the export-oriented RMG units, which are using locally-produced raw materials. It reasoned that the measure had already increased the use of local raw materials. BTMA said that the incentive would en courage establishment of more backward and forward linkage industries top meet the RMG sectors demands after the expiry of the Multi-Fiber Agreement (MFA). According to the association, the use of locally-produced raw materials in the export-oriented knitting weaving, RMG and towel sectors has increased many-fold. The spinning mills now supply 56.80 million kg of fiber for the knitting sub-sector and 13 million kg for terry towel sub-sector. This is saving the country US$ 71 million per annum. As the demand for locally-made fabric is increasing, the association proposed for maintaining 37.5 per cent duty on imported fabric till 2005. The government lowered import duty on fabric from 42 per cent to 37.5 per cent in the last budget. BTMA also called for withdrawing VAT on viscose staple fiber, three per cent advance income tax on synthetic fiber and lifting the import duty and VAT on sorts of chemicals and dyes used in textile industries. Source : The Daily Star |