The BTMA also urged the government to increase the existing alternative cash assistance from 4% to 10% for six months to compensate for the losses faced by export-oriented textile mills
The Bangladesh Textile Mills Association (BTMA), while thanking the government for reducing value added tax (VAT) on all kinds of yarn from Tk4 to Tk3 per yard in the proposed national budget for fiscal year 2020-21, has demanded that it be removed altogether.
The BTMA also urged the government to increase the existing alternative cash assistance from 4% to 10% for six months to compensate for the losses faced by export-oriented textile mills due to aggressive promotional strategies taken by competing countries.
The body previously proposed waiving VAT on all kinds of yarn as the industry had lost around Tk20,000 crore during the general holiday announced by the government to curb the spread of Covid-19, said a press release.
A fixed Tk6 ad valorem VAT has been proposed to be imposed on man-made fiber produced yarn which the organization thinks will not benefit the related textile mills due to a dearth of export orders for yarn and buyer shortfall the textile mills have been plunged into.
Therefore the organization urged a reconsideration of the proposal and clamp a Tk2 ad valorem VAT on every man-made fiber produced yarn.
In order to stop unethical trading and protect the fair interests of the domestic industry, the BTMA earlier proposed changing the tariff structure of some Harmonised System (HS) coded fabric. However, the budget did not reflect the issue and that is why the BTMA has urged the authorities to reconsider the matter.
Besides, the organization thinks a 0.5% withholding tax on export prices of all types of readymade garments will be challenging for the textiles and readymade garments in their struggle to survive in the international market in the Covid-19 context.
It has therefore requested the government to fix the rate of withholding tax at the previous rate of 0.25%.