Tax, customs burdens hold back concrete block manufacturers

Stakeholders of the local green concrete block manufacturing industry have long been facing difficulties, as they have to pay much higher tax compared to that of traditional clay-brick makers.

Besides, comparatively lower scheduled rates of concrete blocks, ambiguity in the definition of environment-friendly blocks in a tax-related circular, and complications to get customs clearance for machine parts, especially pallets, are holding back their desired growth, they added.

They said that such bottlenecks are impeding implementation of the government's endeavour to popularize the environment-friendly concrete blocks to save the environment and protect agrarian land.

Currently, around 300 block-manufacturing companies - large and small - are operating in the country while the number is growing on the back of the government's move to completely phase out clay-burnt brick in public works by 2025.

In this regard, a platform of the block makers has recently written to Environment, Forest and Climate Change Minister Saber Hossain Chowdhury, seeking urgent initiative to implement the government plan.

The government has issued clear directives to increase the use of different types of concrete blocks gradually instead of clay bricks, Bangladesh Concrete Blocks & Pavers Manufacturer Society (BCBPMS) said in the letter.

It also said a value added tax (VAT) related circular exempted tax on 'hollow concrete blocks' despite all concrete blocks - solid or having holes - are environment-friendly. Due to the ambiguity, the same manufacturers have to pay taxes for solid concrete blocks.

Apart from this, a block manufacturing company has to pay a VAT of Tk60-80 lakh at source and Advance Income Tax, among others.

In contrast, traditional brick makers pay around Tk5 lakh in a year, the BCBPMS claimed in the letter.

The trade body also urged the government to provide a duty-free facility to block-making machinery imports for the next five years.

According to data available with the state-run Housing and Building Research Institute (HBRI), there are around 8,000 operating traditional brick kilns, contributing 1% to the country's GDP but destroying 122.5 million tonnes of fertile agricultural topsoil.