BANGLADESH: BPGMEA for withdrawal of 15% proposed VAT on plastic crockery

The new imposition of VAT would increase cost of production and subsequently prices of necessary commodities would be higher many-folds and would harm small-sized manufacturers and thousands of people engaged in the businesses," Md. Jasim Uddin, President of BPGMEA said at a press briefing in Dhaka.

Md Jasim Uddin said the government proposed 15 % VAT on the goods made under harmonised system code (HS Code) 39.24, and many everyday-used products including various sizes of multi serviceable baskets, water bottle, mug, jug, plate and many more are produced under the HS code.

He said the sector would be affected seriously for the imposition of new tax as most of the crockery manufacturers are very small businessmen and some 40 % employees working in the sector live below poverty line.

"Besides at least 80 % of crockery goods reach the customers through the hawkers who are also very poor and they cannot pay VAT in this unconventional marketing chain," he said.

Urging to withdraw the VAT from the proposed budget, he also said apart from harming the sector seriously, it would also open Bangladeshi market to foreign manufacturers.

BPGMEA demanded withdrawal of 15 % VAT on plastic toys to grow the industry.

"The plastic toys markets of the country are now occupied by Chinese goods mostly and local manufacturers won't be able to compete with them due to15 per cent VAT which will put them into a worse situation," he said.

The plastic manufacturers also urged the government to give 20 cash incentives for plastic goods exporters.

Bangladeshi plastic manufacturers now export goods worth Tk 20 billion annually through backward linkage and export directly Tk 7 billion plastic goods to the US and European markets.

Md. Jasim Uddin said they have been demanding a special industrial park for plastic goods manufacturers. But the proposed budget has no allocation for plastic industrial park or any other special industrial zones.

Source: Daily "The Financial Express", Dhaka; 12 June 2013

(Syed Rashid Ali, Karachi, Pakistan)