Bangladesh Jute Mills Association (BJMA) urged the government to reduce tax at source and increase cash incentive for the jute sector as jute price fell on global market.
The association proposed cutting tax at source from 0.80% to 0.25% and raising cash incentive to 15% from 10%.
BJMA leaders placed a set of proposals to the National Board of Revenue last week for consideration in the next fiscal year’s budget.
“Price of jute on the global market declined due to political unrest in the Middle East and Thailand, and international sanctions on Iran,” said BJMA Secretary Abdul Barik Khan.
He said appreciation of dollars in Turkey and India and slow recovery of recession in the US and Europe were another reasons behind price fall.
High bank interest rate also pushed up production cost, according to Abdul Barik.
“We urged the government to consider the current situation and provide necessary policy support for the survival of the sector,” he said.
The government’s paying of 10% cash incentive is encouraging for the businessmen but 5% tax on source is discouraging.
The tax on source should be removed, said BJMA in a statement.
The jute millers’ platform also demanded transferring drawback to banks to simplify the system.
Besides, BJMA sought a budgetary allocation for training workforce.
According to Export Promotion Bureau data, Bangladesh’s export earnings from jute and jute goods dropped by 20% to $612m in July-March period of the current financial year from the same period last year.
The data showed the exports of raw jute declined by 47% and jute bags and sacks by 53%.
However, jute yarns and twine registered 7% growth during the period.
