Feed producers urge
Feed Industries Association Bangladesh (FIAB) and three other associations concerned yesterday demanded withdrawal of advance tax (AT) on raw materials of poultry, fish and animal feeds to keep milk, egg, fish and meat prices at affordable level.
Currently, the feed producers have to pay 5% advance tax — a value added tax (VAT) — while importing raw materials including soybean, palm nuts and maize used in feed production, which was introduced in the budget for the current fiscal year.
Besides, the entrepreneurs have been paying a 5% advance income tax (AIT) or 5% regulatory duty (RD) for different raw materials.
The associations came up with the demands at a press conference at National Press Club in the capital.
FIAB President Ihtesham B Shahjahan, General Secretary Md Ahsanuzzaman, Breeders Association of Bangladesh President Rakibur Rahman Tutul, Bangladesh Poultry Industries Central Council (BPICC) President Moshiur Rahman and Vice-President Shamsul Arefin Khaled were present, among others.
“We are facing capital crisis now due to the advance tax on raw material imports,” said FIAB President Shahjahan, adding that the imports became more complex after the tax came into effect early this fiscal year.
In this situation, prices of egg, milk, meat and fish were on the rise as about 60-70% production costs of the goods were for the feeds only, he mentioned, placing the keynote paper.
Urging the government for cancelling the advance tax, Shahjahan said consumers and small farmers would suffer in the long run, otherwise.
“The government declared poultry and fish sectors free from all types of value added tax including advance trade vat (ATV) for both local production and imports on June 1, 2017 through issuing a statutory regulatory order (SRO), but it again imposed AT in this fiscal,” he said.
“When we raised the matter to the livestock ministry, finance ministry and Revenue Board, the authorities assured us of withdrawing the AT for the sectors,” FIAB president said.
“Responding to our proposal the NBR issued another SRO on October 13 this year, where it only mentioned HS Code 2309.90.90 (fishmeal) for the AT exemption. But we are not benefitted as the code does not cover all the raw materials,” he stated, adding that it should include four more HS Codes.
FIAB General Secretary Ahsanuzzam said the production costs increased by Tk3-4 for per kg feed, Tk8-10 for a kg of poultry meat, Tk7-8 for a kg of fish and Tk1 for a piece of egg due to the advance tax imposed on raw material imports.
"If the situation continues, egg, poultry and fish prices will go beyond the reach of consumers," he warned, adding that the promising local industries, besides, would be harmed and marginal farmers will have to close their farms.
BPICC President Moshiur Rahman said it was taking 20 to 42 days for releasing the raw materials from ports mainly for delay in lab test.
“The delay makes huge losses for us,” he said, adding that it should be by 7-8 days.
Rationales behind the demand
The associations mentioned three points in favour of their demand. Firstly, all industries related to poultry and fish sectors were declared VAT-free on June 1, 2017. So imposing AT (one kind of VAT) should not be applicable for the sectors.
Secondly, majority of the countries in the world were giving subsidies for feed production. Thirdly, the advance tax was causing capital crisis for the entrepreneurs which, they fear, would affect the whole industry.
Two alternative solutions
The industry insiders put forth two solutions as to how cancel advance tax on the feed’s raw material imports — NBR could provide a certificate to each of all registered poultry, fish and dairy feed manufacturers so that they could enjoy exemption without any hassle, or the government should amend the recently published SRO related to AT exemption, adding concerned HS codes including 2304.00.00, 2303.30.00, 2303.10.100, 2306.49.00 for the raw material imports.
Four more demands
The associations also demanded withdrawal of source tax on raw materials from local markets, loans at single digit interest rate, giving 20% rebate in electricity bill for further expansion of the feed industry.
The entrepreneurs also demanded permission for H9N2 vaccine imports to protect poultry industry from diseases.