Added tax on import of raw materials and at the sources may see an increase in the cost in the next fiscal year
Bangladesh Cement Manufacturers Association (BCMA) on Monday demanded withdrawal of the 5% Advance Tax (AT) proposed in 2019-20 fiscal budget on import of raw materials used in cement industry.
At a post budget press conference in the capital, the association leaders also urged the government not to consider the 5% AT and the 3% tax at source, applicable while supplying cement locally, as final tax settlement so that taxes already paid on the heads could be adjusted later.
“If the government implements the proposed budget, the production cost of a sack of cement weighing 50 Kg will increase by Tk42," BCMA President Md Alamgir Kabir told the media briefing.
He said currently the cement manufacturers had to pay 15% VAT on cement production. If the government imposed the 5% extra tax on the sector, cost of cement manufacturing would go up, he added.
“Our working capital will decrease and the additional 5% fresh AT will put additional financial burden on us," Alamgir said.
He said the locally produced cements were being supplied to all large infrastructural projects including the Padma Bridge, Dhaka Elevated Expressway, Karnaphuli Tunnel and Rooppur Nuclear Power Project, along with local housing sector.
“If the proposed measures are implemented, our production cost will increase almost by 10%. As a result, the cost of the large projects will also go up,” the BCMA president said further.
He mentioned that in the last ten years, the growth of cement sector increased by 10-15%, while total investment in the sector stood at Tk30,000 crore.
The current market size of cement industry is more than three crore tons and yearly production capacity of cement is around five crore tons.
Md Shahidullah, senior vice-president of BCMA, said production cost of cement would go up significantly with the imposition of the proposed AT.